Answered: A decision tree of a project is given…

A decision tree of a project is given as follows: A1 S8 What is the expected value of alternative B? 0.5 O a. 5.0 O b. $5.2 EMV-7.5 A2 0.5 O. SO -$15 Od. $4.5 .73 $4 0.45 s10 B 0.55 so

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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2. Assume that we can estimate a project's cash flows as follows: n 0 1 2 3 4 5 Expected Flow E(An) Estimate of Standard Deviation on $0 $10 $15 $20 $25 $30 -$300 $120 $150 $150 $110 $100 In this case, each annual flow can be represented by a random variable with known mean and variance. Further assume complete independence among the cash flows. (a) Find the expected NPW and the variance of this project at i = 10%. (b) If all cash flows are normally distributed with the given means and variances, what is the probability that the NPW will exceed $200?
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Time left 1:14:17 What is the Future worth of the following cashflows: First Cost = 52,000$, AOC = 4,000$, Salvage value = 12,000$, n = 13 and i= 14%. O a. -73,185$ O b. -12,527$ O c. 49,606$ O d. -401,960$ Recovery period is the remaining interval of time in the life of the asset in years. Select one: a. True O b. False
When the price =50000- 200(Demand), the demand that maximize the profit=100 units, fixed cost=$500 per month and variable cost =$5000 per unit, the maximum profit= * 30000-500-5000=$24500 O None of the options is correct O 50000--500-5000=$44500 O 3000000-500-500000=$2499500
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A project has a life of 10 years and no salvage value. Your firm uses an MARR of 8% to evaluate projects. The project has uncertain costs and revenue as shown in the table below: Initial Cost Probability Net Revenue Probability $120,000 0.25 $33,000 0.15 $240,000 0.60 $44,000 0.55 $300,000 0.15 $52,000 0.30 Determine the EUAW for the combination of inital cost and revenue with the highest probability of occurence. Express your answer in $ to the nearest $100. Answer is 8233.0 Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
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