A = $25,000/yr. 1 2 3 4 5 6 7 8 9 EOY $100,000

ENGR.ECONOMIC ANALYSIS
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ISBN:9780190931919
Author:NEWNAN
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Chapter1: Making Economics Decisions
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Consider the following cash flow diagram. The probability of the pessimistic value of N = 4 years is 0.30, the probability of the most likely value of N = 6 years is 0.50, and the probability of the optimistic value of N = 9 years is 0.2. What is the expected value of the present worth of this project when the interest rate is 8% per year? 

A = $25,000/yr.
1
2 3 4 5 6 7 8 9
EOY
$100,000
Transcribed Image Text:A = $25,000/yr. 1 2 3 4 5 6 7 8 9 EOY $100,000
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