Harry Broderick (HB) owns Jettison Scrap and Salvage Company (JSSC). HB wants to buy a ship to salvage debris from the Great Pacific Garbage Patch for 5 years then quit. The following are projections for the project: Project MARR = 10% Inflation is a constant 2% All Monies x $1K Alternatives 1A 2B 3C Capital Cost 200 225 300 Benefit (per Year) MOST OPT MOST OPT MOST OPT 120 100 200 10 15 190 100 225 11 17 225 140 300 15 20 100 150 200 Salvage N Useful Life (Years)
Harry Broderick (HB) owns Jettison Scrap and Salvage Company (JSSC). HB wants to buy a ship to salvage debris from the Great Pacific Garbage Patch for 5 years then quit. The following are projections for the project: Project MARR = 10% Inflation is a constant 2% All Monies x $1K Alternatives 1A 2B 3C Capital Cost 200 225 300 Benefit (per Year) MOST OPT MOST OPT MOST OPT 120 100 200 10 15 190 100 225 11 17 225 140 300 15 20 100 150 200 Salvage N Useful Life (Years)
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
What is the MARR adjusted for inflation?
Calculate the Optimistic Value.
Transcribed Image Text:Harry Broderick (HB) owns Jettison Scrap and Salvage Company (JSSC). HB wants to buy a ship to salvage
debris from the Great Pacific Garbage Patch for 5 years then quit. The following are projections for the
project:
Project MARR = 10%
Inflation is a constant 2%
All Monies x $IK
Capital
Cost
Useful Life
(Years)
OPT MOST OPT
Benefit
Alternatives
Salvage
(per Year)
MOST
ОРТ
MOST
1A
200
100
120
100
200
10
15
2B
225
150
190
100
225
11
17
30
300
200
225
140
300
15
20
Probabilities
??
OPTimistic
70% | MOST likely
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