An investment company is considering 6 different independent, divisible investments. The 6 investments are being considered over a 8 year horizon using a MARR of 15%. The initial investment cost, annual savings, and salvage values are given for each of the projects below: 3 Initial $30,000 $35,000 $30,000 $15,000 $25,000 $23,000 investment Annual $7,000 $11.000 $12.000 $5,300 $10,000 $10,000 Returns Salvage Value $9.500 $22,000 $8,500 $3.000 $1.500 $1.000 The company's investment budget is $60,000. At what level should the company pursue each investment (expressed as a decimal between O and 1), and what will be its total present worth when it pursues these investments? Click here to access the TVM Factor Table calculator. level The company should pursue the 1st investment at level The company should pursue the 2nd investment at level The company should pursue the 3rd investment at level The compaoy should puursue the 4th investment at

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
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Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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An investment company is considering 6 different independent, divisible investments. The 6 investments are being considered over a 8
year horizon using a MARR of 15%. The initial investment cost, annual savings, and salvage values are given for each of the projects
below:
1
2
Initial
$30,000
$35,000
$30,000
$15,000
$25,000
$23,000
investment
Annual
$7,000
$11,000
$12,000
$5,300
$10,000
$10,000
Returns
Salvage Value
$9,500
$22,000
$8,500
$3.000
$1,500
$1,000
The company's investment budget is $60,000. At what level should the company pursue each investment (expressed as a decimal
between O and 1), and what will be its total present worth when it pursues these investments?
Click here to access the TVM Factor Table calculator.
level
The company should pursue the 1st investment at
level
The company should pursue the 2nd investment at
level
The company should pursue the 3rd investment at
level
The company should pursue the 4th investment at
level
The company should pursue the 5th investment at
level
The company should pursue the óth investment at
Total PW -$
Carry all interim calculations to 5 decimal places and then round your final answers for the investment levels to 2 decimal places
and your final answer for the total present worth to a whole number. The tolerance for the investment levels is 20.02 and the
tolerance for the total present worth is ±20.
Transcribed Image Text:An investment company is considering 6 different independent, divisible investments. The 6 investments are being considered over a 8 year horizon using a MARR of 15%. The initial investment cost, annual savings, and salvage values are given for each of the projects below: 1 2 Initial $30,000 $35,000 $30,000 $15,000 $25,000 $23,000 investment Annual $7,000 $11,000 $12,000 $5,300 $10,000 $10,000 Returns Salvage Value $9,500 $22,000 $8,500 $3.000 $1,500 $1,000 The company's investment budget is $60,000. At what level should the company pursue each investment (expressed as a decimal between O and 1), and what will be its total present worth when it pursues these investments? Click here to access the TVM Factor Table calculator. level The company should pursue the 1st investment at level The company should pursue the 2nd investment at level The company should pursue the 3rd investment at level The company should pursue the 4th investment at level The company should pursue the 5th investment at level The company should pursue the óth investment at Total PW -$ Carry all interim calculations to 5 decimal places and then round your final answers for the investment levels to 2 decimal places and your final answer for the total present worth to a whole number. The tolerance for the investment levels is 20.02 and the tolerance for the total present worth is ±20.
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