A potential project has an initial capital investment of $100,000. Net annual revenues minus expenses are estimated

Question:

A potential project has an initial capital investment of $100,000. Net annual revenues minus expenses are estimated to be $40,000 (A$) in the first year and to increase at the rate of 6.48% per year. The useful life of the primary equipment, however, is uncertain, as shown in the following table:

Assume that im = MARR = 15% per year and f = 4% per year. Based on this information,
a. What are the E(PW) and SD(PW) for this project?
b. What is the Pr{PW > 01?
c. What is the E(AW) in R$?
Do you consider the project economically acceptable, questionable, or not acceptable, and why?

MARR
Minimum Acceptable Rate of Return (MARR), or hurdle rate is the minimum rate of return on a project a manager or company is willing to accept before starting a project, given its risk and the opportunity cost of forgoing other...