ΕΟΥ 0 1-10 10 inflow 0 $2700 $4000 Project A outflow $10,000 $300 0 inflow 0 Project B $3500 $5000 outflow $12,000 $400 0 inflow 0 Project C $4200 $6000 outflow $16,000 $500 0
ΕΟΥ 0 1-10 10 inflow 0 $2700 $4000 Project A outflow $10,000 $300 0 inflow 0 Project B $3500 $5000 outflow $12,000 $400 0 inflow 0 Project C $4200 $6000 outflow $16,000 $500 0
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
Evaluate each project with a MARR of 10% using (a) simple payout method, (b) discounted payout method, and (c) incremental benefit-cost analysis. Determine also the (d) future worth and the (e) ERR of each project. Based on the findings, which of the three projects must be prioritized for funding? Draw a cashflow diagram
Transcribed Image Text:EOY
0
1-10
10
inflow
0
Project A
$2700
$4000
outflow
$10,000
$300
0
inflow
0
Project B
$3500
$5000
outflow
$12,000
$400
0
inflow
0
$4200
$6000
Project C
outflow
$16,000
$500
0
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