Three independent projects (A, B, & C) are under consideration, and no more than P 150,00 in capital investment funds can be spent to implement any combination of them. Project D is dependent on the acceptance of project A. If the MARR is 15% per year, which feasible combination of projects would you recommend given the cash flows below? Use the Annual Worth, Present Worth, Future Worth methods. Cash flow (103) at end of yearProject 0 1 2 3 A -100404060B -120255085C -3061911D -2010105

Annual worth distributes present worth into equivalent uniform value over its useful life.

Answered: Three independent projects (A, B, & C)…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter11: Capital Budgeting And Risk

Section: Chapter Questions

Problem 8P

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Three independent projects (A, B, & C) are under consideration, and no more than P 150,00 in capital investment funds can be spent to implement any combination of them. Project D is dependent on the acceptance of project A. If the MARR is 15% per year, which feasible combination of projects would you recommend given the cash flows below? Use the Annual Worth, Present Worth, Future Worth methods.

	Cash flow (10³) at end of year
Project	0	1	2	3
A	-100	40	40	60
B	-120	25	50	85
C	-30	6	19	11
D	-20	10	10	5

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