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2. A project has a life of 10 years, and no salvage value. The firm uses an interest rate of 12% to evaluate engineering projects. The project has an uncertain first cost and net revenue. What is the joint probability distribution for first cost and net revenue? Probability 0.2 First Cost $300,000 $400,000 0.5 $600,000 0.3 Net Revenue $70,000 Probability 0.3 $90,000 0.5 $100,000 0.2

2. A project has a life of 10 years, and no salvage value. The firm uses an interest rate of 12% to evaluate engineering projects. The project has an uncertain first cost and net revenue. What is the joint probability distribution for first cost and net revenue? Probability 0.2 First Cost $300,000 $400,000 0.5 $600,000 0.3 Net Revenue $70,000 Probability 0.3 $90,000 0.5 $100,000 0.2

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
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Engineering Econ HW8 Q2

2. A project has a life of 10 years, and no salvage value. The firm uses an interest rate of 12% to evaluate engineering projects. The project has an uncertain first cost and net revenue. What is the joint probability distribution for first cost and net revenue? Probability 0.2 First Cost $300,000 $400,000 0.5 $600,000 0.3 Net Revenue $70,000 Probability 0.3 $90,000 0.5 $100,000 0.2
Transcribed Image Text:2. A project has a life of 10 years, and no salvage value. The firm uses an interest rate of 12% to evaluate engineering projects. The project has an uncertain first cost and net revenue. What is the joint probability distribution for first cost and net revenue? Probability 0.2 First Cost $300,000 $400,000 0.5 $600,000 0.3 Net Revenue $70,000 Probability 0.3 $90,000 0.5 $100,000 0.2
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