3. (5 Marks) An engineering project requires $25,000 as first cost and has a planning horizon...

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3. (5 Marks) An engineering project requires $25,000 as first cost and has a planning horizon of six years. Operating costs are $2,300 per year, and expected annual revenue is $9,200 (both real cashflow). Calculate the project's present worth if the interest rate is 5% (current), the expected annual inflation is 2% and the salvage value is $6,000 (Real). 3. (5 Marks) An engineering project requires $25,000 as first cost and has a planning horizon of six years. Operating costs are $2,300 per year, and expected annual revenue is $9,200 (both real cashflow). Calculate the project's present worth if the interest rate is 5% (current), the expected annual inflation is 2% and the salvage value is $6,000 (Real).