Advanced Modular Technology (AMT) makes energy cleaner, safer, more secure and more efficient. It typically exhibits net annual revenues that increase over a fairly long period In the long run, an AMT project may be profitable as measured by IRR, but its simple payback period may be unacceptable. Evaluate this AMT project using the IRR method when the company MARR is 25% per year and its maximum allowable payback period is five years What is your recommendation?

ENGR.ECONOMIC ANALYSIS
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ISBN:9780190931919
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Chapter1: Making Economics Decisions
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ENGINEERING ECONOMICS

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Advanced Modular Technology (AMT) makes energy cleaner, safer, more secure and more
efficient. It typically exhibits net annual revenues that increase over a fairly long period In
the long run, an AMT project may be profitable as measured by IRR, but its simple payback
period may be unacceptable Evaluate this AMT project using the IRR method when the
company MARR is 25% per year and its maximum allowable payback period is five years
What is your recommendation?
Capital investment at time 0
Net revenues in year k
$104,000
$20,000
$9,000 - (k-1)
$10,000
6 years
Market (salvage) value
Life
The internal rate of retum is%. (Round to one decimal place)
Transcribed Image Text:Advanced Modular Technology (AMT) makes energy cleaner, safer, more secure and more efficient. It typically exhibits net annual revenues that increase over a fairly long period In the long run, an AMT project may be profitable as measured by IRR, but its simple payback period may be unacceptable Evaluate this AMT project using the IRR method when the company MARR is 25% per year and its maximum allowable payback period is five years What is your recommendation? Capital investment at time 0 Net revenues in year k $104,000 $20,000 $9,000 - (k-1) $10,000 6 years Market (salvage) value Life The internal rate of retum is%. (Round to one decimal place)
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