In evaluating the sensitivity of an alternative to its first cost, its AW was calculated for changes

Question:

In evaluating the sensitivity of an alternative to its first cost, its AW was calculated for changes in the estimated first cost by –10%, +5%, and +15%. The resulting AW values were $+21,000, $–2410, and $–34,000, respectively. On the basis of these values, one could conclude that:

(a) The attractiveness of the alternative is not sensitive to its first cost 

(b) The attractiveness of the alternative is slightly sensitive to its first cost

(c) The attractiveness of the alternative is highly sensitive to its first cost 

(d) Cannot tell whether the attractiveness of the alternative is sensitive to its first cost or not

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Engineering Economy

ISBN: 978-0073523439

8th edition

Authors: Leland T. Blank, Anthony Tarquin

Question Posted: