Engineering Economy
Engineering Economy
16th Edition
ISBN: 9780133582819
Author: Sullivan
Publisher: DGTL BNCOM
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Chapter 11, Problem 36FE
To determine

Profitability of the project.

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File Preview 2. The cash flows from a contemplated project are assumed to have a Beta distribution with following estimated values: EOY 0 Pessimistic, Yp S-14,000 1 0 2 5,000 3 8,000 Most likely $-12,000 2,000 8,000 12,000 Optimistic, Yo $-10,000 4,000 11,000 16,000 (a) Calculate the means and standard deviations of the cash flow for each year. (b) Assume MARR-15%, find the the mean and standard deviation of the net present value. (Assume the cash flows are completely independent.)
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