Question: A project has been selected for implementation. The net cash flow (NCF) profile associated with the project is shown below. MARR is 10 percent/year. a.

A project has been selected for implementation. The net cash flow (NCF) profile associated with the project is shown below. MARR is 10 percent/year.

EOY 0 1 2 3 4 5 NCF -$70,000 $30,000 $30,000 $30,000

a. What is the annual worth of this investment?

b. What is the decision rule for judging the attractiveness of investments based on annual worth?

c. Is the project economically justified?

EOY 0 1 2 3 4 5 NCF -$70,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000+ $2,000

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