If the capital budget limit is $120,000, the MARR is 10% per year, and all projects have a 10-year life, rank and select from the independent projects using the (a) PI measure, (b) IROR measure, and (c) PW at the MARR. (d) Are different projects selected using the three methods? First Net Income, IROR, PW at Project Cost, $ $ per Year % 10%, $ A −18,000 4,000 18.0 6,578 B −15,000 2,800 13.3 2,205 C −35,000 12,600 34.1 42,422 D −60,000 13,000 17.3 19,879 E −50,000 8,000 9.6 −843
If the capital budget limit is $120,000, the MARR is 10% per year, and all projects have a 10-year life, rank and select from the independent projects using the (a) PI measure, (b) IROR measure, and (c) PW at the MARR. (d) Are different projects selected using the three methods? First Net Income, IROR, PW at Project Cost, $ $ per Year % 10%, $ A −18,000 4,000 18.0 6,578 B −15,000 2,800 13.3 2,205 C −35,000 12,600 34.1 42,422 D −60,000 13,000 17.3 19,879 E −50,000 8,000 9.6 −843
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
If the capital budget limit is $120,000, the MARR
is 10% per year, and all projects have a 10-year life,
rank and select from the independent projects
using the (a) PI measure, (b) IROR measure, and
(c) PW at the MARR. (d) Are different projects
selected using the three methods?
First Net Income, IROR, PW at
Project Cost, $ $ per Year % 10%, $
A −18,000 4,000 18.0 6,578
B −15,000 2,800 13.3 2,205
C −35,000 12,600 34.1 42,422
D −60,000 13,000 17.3 19,879
E −50,000 8,000 9.6 −843
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