b) Assuming 2 projects; the 1st will provide a benefit of 100 000 Rand for 3 years and has an initial cost of 200 000 Rand, The 2nd will provide a benefit of 200 000 Rand for 3 years with an initial cost of 300 000 Rand. Which project is more profitable at a discount rate of, i) 5% and ii) 10%.

b) Assuming 2 projects; the 1st will provide a benefit of 100 000 Rand for 3 years and has an initial cost of 200 000 Rand, The 2nd will provide a benefit of 200 000 Rand for 3 years with an initial cost of 300 000 Rand. Which project is more profitable at a discount rate of, i) 5% and ii) 10%.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

D2)

b) Assuming 2 projects; the 1st will provide a benefit of
100 000 Rand for 3 years and has an initial cost of
200 000 Rand, The 2nd will provide a benefit of 200 000
Rand for 3 years with an initial cost of 300 000 Rand.
Which project is more profitable at a discount rate of, i)
5% and ii) 10%.

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