A firm is considering the development of several new products. The products under consideration are listed here; the products in each project group are mutually exclusive. Project group Products Development costs (P) Net annual cash flow (P) A A1 500,000 90,000 A2 650,000 110,000 A3 700,000 115,000 B B1 600,000 105,000 B2 675,000 112,000 C C1 800,000 150,000 C2 1,000,000 175,000 At most one product from each group will be selected. The firm has MARR of 10% per year and a capital investment budget limitation on development costs of P2,100,000. the life of all products is assumed to be ten (10) years. Assume no market values at the end of 10 years. A firm is considering the development of several new products. The products underconsideration are listed here; the products in each project group are mutually exclusive.Project groupProductsDevelopment costs (P)Net annual cash flow (P)A1500,00090,000AA2650,000110,000АЗ700,000115,000BB1600,000105,000B2675,000112,000CCi800,000150,000C21,000,000175,000At most one product from each group will be selected. The firm has MARR of 10% peryear and a capital investment budget limitation on development costs of P2,100,000. thelife of all products is assumed to be ten (10) years. Assume no market values at the endof 10 years.

Investment PMT PV NPV A1 $ 500000 $ 90000 $ 553011 $ 53011 A2…

Answered: A firm is considering the development…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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A firm is considering the development of several new products. The products under consideration are listed here; the products in each project group are mutually exclusive. Project group Products Development costs (P) Net annual cash flow (P) A A1 500,000 90,000 A2 650,000 110,000 A3 700,000 115,000 B B1 600,000 105,000 B2 675,000 112,000 C C1 800,000 150,000 C2 1,000,000 175,000 At most one product from each group will be selected. The firm has MARR of 10% per year and a capital investment budget limitation on development costs of P2,100,000. the life of all products is assumed to be ten (10) years. Assume no market values at the end of 10 years.

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