ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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A
B
C
$9,000
$12,000
$1,800
Initial cost
$15,000
$8,000
$5,000
2 years
Annual benefit
Salvage value
Life in years
$2,000
$9,000
3 Years Infinity
MARR
10%
i. The NPW of alt. A is
A) $13,420
B) $17,380
C) $11,000
D) $6,00
ii. The NPW of alt. B is
A) $13,420
B) $17,380
C) $11,000
D) $6,000
iii. The NPW of alt. C is
A) $13,420
B) $17,380
C) $11,000
D) $6,000
iv. The best alternative among the three alternatives using the PW analysis is
A) Alt. A
B) Alt. B
C) Alt. C
D) Either alt. B or alt.
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Transcribed Image Text:A B C $9,000 $12,000 $1,800 Initial cost $15,000 $8,000 $5,000 2 years Annual benefit Salvage value Life in years $2,000 $9,000 3 Years Infinity MARR 10% i. The NPW of alt. A is A) $13,420 B) $17,380 C) $11,000 D) $6,00 ii. The NPW of alt. B is A) $13,420 B) $17,380 C) $11,000 D) $6,000 iii. The NPW of alt. C is A) $13,420 B) $17,380 C) $11,000 D) $6,000 iv. The best alternative among the three alternatives using the PW analysis is A) Alt. A B) Alt. B C) Alt. C D) Either alt. B or alt.
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The concept of present value states that an amount of money today is worth more than the same amount in the future.To put it another way, money received in the future is less valuable than money received today.The present value of an investment takes into account any interest rate that it may earn. The sum of future investment returns discounted at a specified level of rate of return expectation yields the present value , which is calculated as the sum of future investment returns are discounted at a predetermined rate of return expectation.

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