Question: A new engineer is evaluating whether to use a higher-voltage transmission line. It will cost $250,000 more initially, but it will reduce transmission losses. The

A new engineer is evaluating whether to use a higher-voltage transmission line. It will cost $250,000 more initially, but it will reduce transmission losses. The optimistic, most-likely, and pessimistic projections for annual savings are $25,000, $20,000, and $13,000. The interest rate is 6% and the transmission line should have a life of 30 years. a. Find the present worth for each estimated value. Assume the optimistic probability is 20%, the most likely is 50%, and the pessimistic is 30%. b. What is the expected value of the present worth? c. What is the present worth of the expected value?

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