nas proposed the12.02-PR002 Aerotron Radio Inc. has $250,000 available and its engineeringfollowing indivisible investments. With each, Aerotron can exit at the end of its planning horizon of5 years and have its initial investment returned. In addition, each year Aerotron will receive theannual return shown below. MARR is 12%.Initial Investment$75,000$65,000$50,000$80,000$100,000Investment12345Annual Return$10,800$12,000$7,500$13,750$15,750For the original problem:a. Which investments should Aerotron select for the optimum portfolio?b. What is the present worth for the optimum investment portfolio?c. What is the IRR for the optimum investment portfolio?

Present worth, also known as present value, calculates the current value of future cash flows by…

the 2002 Aerotron Radio Inc. has $250,000 available and following indivisible investments. With each, Aerotron can exit at the end of its planning horizon of 5 years and have its initial investment returned. In addition, each year Aerotron will receive the annual return shown below. MARR is 12%. Investment 1 2 3 4 5 Initial Investment $75,000 $65,000 $50,000 $80,000 $100,000 Annual Return $10,800 $12,000 $7,500 $13,750 $15,750 For the original problem: a. Which investments should Aerotron select for the optimum portfolio? b. What is the present worth for the optimum investment portfolio? c. What is the IRR for the optimum investment portfolio?

the 2002 Aerotron Radio Inc. has $250,000 available and following indivisible investments. With each, Aerotron can exit at the end of its planning horizon of 5 years and have its initial investment returned. In addition, each year Aerotron will receive the annual return shown below. MARR is 12%. Investment 1 2 3 4 5 Initial Investment $75,000 $65,000 $50,000 $80,000 $100,000 Annual Return $10,800 $12,000 $7,500 $13,750 $15,750 For the original problem: a. Which investments should Aerotron select for the optimum portfolio? b. What is the present worth for the optimum investment portfolio? c. What is the IRR for the optimum investment portfolio?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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