Feng Seawater Desalination Systems has established a capital investment limit of $800,000 for next year for projects that target improved recovery of highly brackish groundwater. All projects have a 4-year life and the MARR is 10% per year. (a) Select any or all of the projects. (b) Project Z is a favorite of Mr. Feng. Determine the minimum NCF necessary to make Z the economically best project. (c) Use a spreadsheet to answer the two parts above. Initial Net Cash Salvage Project Investment, $ Flow, $/Year Value, $ X −250,000 50,000 45,000 Y −300,000 90,000 −10,000 Z −550,000 150,000 100,000
Feng Seawater Desalination Systems has established a capital investment limit of $800,000 for next year for projects that target improved recovery of highly brackish groundwater. All projects have a 4-year life and the MARR is 10% per year. (a) Select any or all of the projects. (b) Project Z is a favorite of Mr. Feng. Determine the minimum NCF necessary to make Z the economically best project. (c) Use a spreadsheet to answer the two parts above. Initial Net Cash Salvage Project Investment, $ Flow, $/Year Value, $ X −250,000 50,000 45,000 Y −300,000 90,000 −10,000 Z −550,000 150,000 100,000
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Feng Seawater Desalination Systems has established
a capital investment limit of $800,000 for
next year for projects that target improved recovery
of highly brackish groundwater. All projects have
a 4-year life and the MARR is 10% per year.
(a) Select any or all of the projects. (b) Project Z is
a favorite of Mr. Feng. Determine the minimum
NCF necessary to make Z the economically best
project. (c) Use a spreadsheet to answer the two
parts above.
Initial Net Cash Salvage
Project Investment, $ Flow, $/Year Value, $
X −250,000 50,000 45,000
Y −300,000 90,000 −10,000
Z −550,000 150,000 100,000
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