Optimistic Most Likely Pessimistic Сapital $90,000 $100,000 $120,000 investment 12 years $30,000 10 years $20,000 $30,000 Useful life 6 years SO Market value Net annual $35,000 $20,000 cash flow MARR (per year) 11% 11% 11%
Optimistic Most Likely Pessimistic Сapital $90,000 $100,000 $120,000 investment 12 years $30,000 10 years $20,000 $30,000 Useful life 6 years SO Market value Net annual $35,000 $20,000 cash flow MARR (per year) 11% 11% 11%
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
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Suppose that, for an engineering project, the optimistic, most likely, and pessimistic estimates are as shown in the accompanying table. Develop a spreadsheet to determine the AW for each of the three estimate conditions. It is thought that the most critical elements are useful life and net annual cash flow. Include in your spreadsheet a table showing the AW for all combinations of the estimates for these two factors, assuming that all other factors remain at their most likely values.
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