Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:6. Suppose FVW(MARR) = $5 for a single alternative. Is this investment economically justified? Justify your conclusion.
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Conceptual Introduction:-
Annual Worth:
Annual worth is an optional method for FW and PW Analysis.
Mostly times; It will choose the same projects that are selected by FW and AW method.
AW is computed only for one lifecycle; that is why it is more desirable than the PW and FW method.
The formula for AW = PW(A/P,i,n) where i is interest rate or MARR Value , n is number of years or periods.
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