Question: Answer the problem on the basis of the given graph and the most likely estimates given as follows: Graph: If the initial investment is increased

Answer the problem on the basis of the given graph  and the most likely estimates given as follows:

12% per year 5 years MARR Useful life Initial investment Receipts-Expenses (R $5,000 – E) $1,500/year


Graph:

Initial (R-E) Useful Life Investment $3,000 $2,000 $1,000 se -40% -30% -20% -10% 10% 20% 30% 40% ($1,000) - ($2,000) X-A


If the initial investment is increased by more than 9%, the project is profitable.
(a) True

(b) False

12% per year 5 years MARR Useful life Initial investment Receipts-Expenses (R $5,000 E) $1,500/year Initial (R-E) Useful Life Investment $3,000 $2,000 $1,000 se -40% -30% -20% -10% 10% 20% 30% 40% ($1,000) - ($2,000) X-Axis (Percent Change in Parameter) Y-Axis, PW(12%)

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