You wish to evaluate four independent projects that all have a 10-year life at MARR = 15% per year. Preliminary estimates for first cost, annual net income, and SV have been made. A B C D First cost, $ −1,200 −2,000 −5,000 −7,000 Annual net income, $/year 200 400 1100 1300 Salvage value, $ 5 6 8 7 (a) Accept or reject each project using a present worth analysis. On your spreadsheet, include the logical IF function to make the accept/ reject decision. (b) The preliminary estimates have changed for projects A and B as shown below. Use the same spreadsheet to reevaluate them. A B First cost, $ −1,000 −2,200 Annual net income, $/year 300 440 Salvage value, $ 8 0
You wish to evaluate four independent projects that all have a 10-year life at MARR = 15% per year. Preliminary estimates for first cost, annual net income, and SV have been made. A B C D First cost, $ −1,200 −2,000 −5,000 −7,000 Annual net income, $/year 200 400 1100 1300 Salvage value, $ 5 6 8 7 (a) Accept or reject each project using a present worth analysis. On your spreadsheet, include the logical IF function to make the accept/ reject decision. (b) The preliminary estimates have changed for projects A and B as shown below. Use the same spreadsheet to reevaluate them. A B First cost, $ −1,000 −2,200 Annual net income, $/year 300 440 Salvage value, $ 8 0
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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You wish to evaluate four independent projects
that all have a 10-year life at MARR = 15% per
year. Preliminary estimates for first cost, annual
net income, and SV have been made.
A B C D
First cost, $ −1,200 −2,000 −5,000 −7,000
Annual net
income, $/year
200 400 1100 1300
Salvage value, $ 5 6 8 7
(a) Accept or reject each project using a present
worth analysis. On your spreadsheet, include
the logical IF function to make the accept/
reject decision.
(b) The preliminary estimates have changed for
projects A and B as shown below. Use the
same spreadsheet to reevaluate them.
A B
First cost, $ −1,000 −2,200
Annual net income, $/year 300 440
Salvage value, $ 8 0
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