Real Manufacturing (RM) is considering 3 projects with cash flows presented below. The total amount of investment
Fantastic news! We've Found the answer you've been seeking!
Question:
Real Manufacturing (RM) is considering 3 projects with cash flows presented below. The total amount of investment capital available for all of the projects is $5,000,000. What project(s) should RM undertake on the basis of NPV analysis? Assume that RM uses a 5-year project recovery period and a MARR of 15% per year.
Please show how to work using excel. Thanks!
| Project 1 | Project 2 | Project 3 | |
| Initial cost | -$3,000,000.00 | -$4,000,000.00 | -$2,000,000.00 |
| AOC ($/year) | -$70,000.00 | -$200,000.00 | -$50,000.00 |
| Revenue ($/year) | $1,200,000.00 | $1,800,000.00 | $800,000.00 |
Expert Answer:
Posted Date:
