Decision D6, which has three possible choices (X, Y, or Z), must be made in year 3 of a 6-year study period in order to maximize EPW Using an MARR of 16% per year, the investment required in year 3, and the estimated cash flows for years 4 through 6, determine which decision should be made in year 3. High Low High Y D6 Low High Low Investment, Cash Flow, (Year Cash Flow, $1000 3) Cash Flow, $1000 (Year 6) Cash Flow, Outcome Year 3 (Year 4) $1000 (Year 5) Probability 3 High (X) $-190,000 $50 $50 $50 0.58 $40 $30 $40 $30 $170 $-30 $20 $50 Low (X) High (Y) Low (Y) High (Z) Low (Z) 0.42 $-54,000 $30 $30 $190 $-30 0.45 $30 $150 $-30 0.55 $-240,000 0.7 0.3 The present worth of X is $ [ The present worth of Y is $ The present worth of Z is $

Decision D6, which has three possible choices (X, Y, or Z), must be made in year 3 of a 6-year study period in order to maximize EPW Using an MARR of 16% per year, the investment required in year 3, and the estimated cash flows for years 4 through 6, determine which decision should be made in year 3. High Low High Y D6 Low High Low Investment, Cash Flow, (Year Cash Flow, $1000 3) Cash Flow, $1000 (Year 6) Cash Flow, Outcome Year 3 (Year 4) $1000 (Year 5) Probability 3 High (X) $-190,000 $50 $50 $50 0.58 $40 $30 $40 $30 $170 $-30 $20 $50 Low (X) High (Y) Low (Y) High (Z) Low (Z) 0.42 $-54,000 $30 $30 $190 $-30 0.45 $30 $150 $-30 0.55 $-240,000 0.7 0.3 The present worth of X is $ [ The present worth of Y is $ The present worth of Z is $

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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