7. During sensitivity analysis, PW becomes 0 for an increased MARR and decreased number of economic life. Which of these can be concluded? Note that PW is positive on the given initial condition. A. The project is sensitive to MARR and economic life. B. Increasing the number of years for its economic life must be done to avoid decision reversal. C. MARR must be fixed to avoid decision reversal. D. MARR and economic life must be fixed to avoid decision reversal.

7. During sensitivity analysis, PW becomes 0 for an increased MARR and decreased number of economic life. Which of these can be concluded? Note that PW is positive on the given initial condition. A. The project is sensitive to MARR and economic life. B. Increasing the number of years for its economic life must be done to avoid decision reversal. C. MARR must be fixed to avoid decision reversal. D. MARR and economic life must be fixed to avoid decision reversal.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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I want you to provide me the Cash Flow diagram of the problem. Only cash flow diagram, the solution is already there. Thanks in advance! The annual estimated cash flow is $140,000. The salvage value will be 12% of the initial price after 5 years. The discount rate (r) is 18% Let us assume the initial price of the doughnut machine be X. PV of cash inflows=PV of cash outflows$140,000×PVAF4,18%+.12X×PVF5,18%=X$140,000×2.69006180465+.12X×0.43710921621=X$376,608.652651=X-0.05245310594$376,608.652651=0.94754689406XX=$397,456.479475 The maximum purchase price of the doughnut machine is $397,456.48.
Find the Present Worth of each of the option Investment: $10 million Annual Revenue: $103 million Breakdown: a) Ticket sales: $68 millionb) VIP Memberships: $13 million Concession revenues: $22 million Annual Costs: $75 million Breakdown: a) Maintenance: $35 millionb) Salaries: $8 millionc) Concession costs: $6 million d) Event Operations: $10 million e) Overhead: $16 million Major Maintenance Update every 20 years: $20 million GIVEN ASSUMPTIONS While any renovation is taking place, the stadium will be closed and there will be no annual revenue or annual costs It is estimated that all Annual Revenues grow at a rate of 1% per year, and all Annual Costs grow at a rate of 0.8% per year The MARR is 5% The stadium will only be used for 50 years after it is done being upgraded, and at that point it will have no salvage value.
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choose correct option plz. Asap
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