15 points) A new device is being purchase for a certain proiect in a local community. The following financial parameters have been estimated: Initial cost $100.000 Annual savings (AS) $20.000 Useful life (N) 10 years Salvage value (end of 10 years) $30,000 MARR (annual) 10% between -20% and There is considerable uncertainty surrounding the timates of annual savings +25%, and useful life--7 years to 12 years. a) Construct the best and worst scenarios 0) Draw i spider plot (PWys h ether any of the two is sensitive, and which of the two is more sensitive. First compute the following: (Interest Table for 10% is given) Nominal PW = -100K+ 30K (P/E 10% 10) 20K (P/A, 10%, 10) -$34,458 PW(AS80%)--100K+30K*(P/F.10%,10)+16K (P/A 10% 10) =$9.879 PWCAS-125%)-100K+30K (P/F,10% 10)+25K (P/A,10% 10) =$65,180 30K*(P/F 10%, 10)+20K"(P/A 10%.10) - 8 -34,457 PW(N=120% )=-100K+30K (P/F,10% 10 )+20K*(P/A, 10%, 10) = 10% 100 $-34,457 Then draw the spider plot and determine whether (1) PW is sensitive to either parameter and (b) the decision is sensitive to either parameter 15 points) A new device is being purchase for a certain proiect in a local community. The following financial parameters have been estimated: Initial cost $100.000 Annual savings (AS) $20.000 Useful life (N) 10 years Salvage value (end of 10 years) $30,000 MARR (annual) 10% between -20% and There is considerable uncertainty surrounding the timates of annual savings +25%, and useful life--7 years to 12 years. a) Construct the best and worst scenarios 0) Draw i spider plot (PWys h ether any of the two is sensitive, and which of the two is more sensitive. First compute the following: (Interest Table for 10% is given) Nominal PW = -100K+ 30K (P/E 10% 10) 20K (P/A, 10%, 10) -$34,458 PW(AS80%)--100K+30K*(P/F.10%,10)+16K (P/A 10% 10) =$9.879 PWCAS-125%)-100K+30K (P/F,10% 10)+25K (P/A,10% 10) =$65,180 30K*(P/F 10%, 10)+20K"(P/A 10%.10) - 8 -34,457 PW(N=120% )=-100K+30K (P/F,10% 10 )+20K*(P/A, 10%, 10) = 10% 100 $-34,457 Then draw the spider plot and determine whether (1) PW is sensitive to either parameter and (b) the decision is sensitive to either parameter