Decision D6, which has three possible choices (X, Y, or Z), must be made in year 3 of a 6-year study period in order to maximize E(PW). Using an MARR of 14% per year, the investment required in year 3, and the estimated cash flows for years 4 through 6, determine which decision should be made in year 3.

Required:

High X Low High Y D6 Low Z High Low Outcome Probability Investment, Cash Flow, $1000 Cash Flow, (Year 3) Year 3 (Year 4) 3 4 High (X) $-170,000 $50 Low (X) $40 High (Y) $-52,000 $30 Low (Y) $30 High (Z) $-220,000 $190 Low (Z) $-30 Cash Flow, $1000 (Year 5) 5 $50 $30 $40 $30 $170 $-30 Cash Flow, $1000 (Year 6) 6 $50 $20 $50 $30 $150 $-30 0.54 0.46 0.45 0.55 0.7 0.3 The present worth of X is $ The present worth of Y is $ The present worth of Z is $ Select decision branch Z