An auto manufacturer is considering adding new automation to their assembly line to production costs. The manufacturer is confident that capital costs to get the new equ "in service" will be $2,000,000, with a salvage value of $40,000 after a 9 year useful manufacturer is less confident about the annual savings that will occur as a result of automation and cannot accurately assess the probability of the various outcomes. The manufacturer estimates the annual savings will be in the range of: Pessimistic $450,000 Most likely Optimistic $660,000 $870,000 Using an MARR of 12%, and the Beta distribution, determine the mean NPW for the investment. Express your answer in $ to the nearest $1,000

An auto manufacturer is considering adding new automation to their assembly line to production costs. The manufacturer is confident that capital costs to get the new equ "in service" will be $2,000,000, with a salvage value of $40,000 after a 9 year useful manufacturer is less confident about the annual savings that will occur as a result of automation and cannot accurately assess the probability of the various outcomes. The manufacturer estimates the annual savings will be in the range of: Pessimistic $450,000 Most likely Optimistic $660,000 $870,000 Using an MARR of 12%, and the Beta distribution, determine the mean NPW for the investment. Express your answer in $ to the nearest $1,000

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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