ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
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Example: For MARR=15% per year and b=$18 million, select from the following independent
projects using a) PW, b) IROR, c) PI.
Projects
1
Investment, NCF, $1000
-8,000
NCF, $1000 per year
4,000
6
Life nj, years
IROR, %
44.5
PI
PW at 15%, $1000
1.89
7,138
2
-15,000
2,900
9
En 12.8
0.92
-1,162
3
-8,000
2,700
5
20.4
1.13
1,051
-8,000
2,500
4
9.6
0.89
-863
5
-5,000
2,600
3
26.0
1.19
936
Transcribed Image Text:Example: For MARR=15% per year and b=$18 million, select from the following independent projects using a) PW, b) IROR, c) PI. Projects 1 Investment, NCF, $1000 -8,000 NCF, $1000 per year 4,000 6 Life nj, years IROR, % 44.5 PI PW at 15%, $1000 1.89 7,138 2 -15,000 2,900 9 En 12.8 0.92 -1,162 3 -8,000 2,700 5 20.4 1.13 1,051 -8,000 2,500 4 9.6 0.89 -863 5 -5,000 2,600 3 26.0 1.19 936
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