Consider the following set of investment projects, all of which have a three-year investment life: n A B C D -$1,000 -$1,200 $900 $3,500 0 1 2 3 -$1,200 $0 $0 $3,000 -$1,800 $600 $900 $1,700 -$6,500 $2,500 $1,900 $2,800 A. Compute the net present worth of each project at i=10%. For timely computations, use the conversion factors in the tables provided with this test.

Consider the following set of investment projects, all of which have a three-year investment life: n A B C D -$1,000 -$1,200 $900 $3,500 0 1 2 3 -$1,200 $0 $0 $3,000 -$1,800 $600 $900 $1,700 -$6,500 $2,500 $1,900 $2,800 A. Compute the net present worth of each project at i=10%. For timely computations, use the conversion factors in the tables provided with this test.

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

Consider the following set of investment projects, all of which have a three-year investment life:
n
A
B
C
D
-$1,000
-$1,200
$900
$3,500
0
1
2
3
-$1,200
$0
$0
$3,000
Show Transcribed Text
O
-$1,800
$600
$900
$1,700
A. Compute the net present worth of each project at i=10%. For timely computations, use
the conversion factors in the tables provided with this test.
Show Transcribed Text
5
-$6,500
$2,500
$1,900
$2,800
C
B. Suppose the projects represent mutually exclusive alternatives. Which one should be
chosen and why?

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