The independent project estimates below have been developed by the engineering and finance managers at Golphanen Enterprises. The corporate MARR is 8% per year, and the capital investment limit set by the CFO is $4 million. As a new employee in the Engineering Department, you have been asked to recommend the economically best projects. Use (a) hand solution, and (b) spreadsheet solution to determine your recommendation. Project Cost, Life, NCF, Project $ Millions Years $ per Year 1 −1.5 8 360,000 2 −3.5 10 600,000 3 −1.8 5 520,000 4 −2.0 4 820,000

Cornerstones of Cost Management (Cornerstones Series)
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Chapter19: Capital Investment
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Problem 4CE: Manzer Enterprises is considering two independent investments: A new automated materials handling...
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The independent project estimates below have
been developed by the engineering and finance
managers at Golphanen Enterprises. The corporate
MARR is 8% per year, and the capital investment
limit set by the CFO is $4 million. As a
new employee in the Engineering Department,
you have been asked to recommend the economically
best projects. Use (a) hand solution, and
(b) spreadsheet solution to determine your
recommendation.
Project Cost, Life, NCF,
Project $ Millions Years $ per Year
1 −1.5 8 360,000
2 −3.5 10 600,000
3 −1.8 5 520,000
4 −2.0 4 820,000

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