4. 8.46 When the country’s economy is expanding, AB Investment Company is optimistic and expects a MARR of 15% for new investments. However, in a receding economy, the expected return is 8%. Normally a 10% return is required. An expanding economy causes the estimates of asset life to go down about 20%, and a receding economy makes the n values increase about 10%. Calculate and observe or plot the sensitivity of PW values versus

(a) the MARR, and

(b) the life values for the two plans detailed below, using the most likely estimates for the other factors.

(c) Considering all the analyses, under which scenario, if any, should plan M be accepted? Table Summary: Table divided into three columns compares two economy plans based on return rate and time period. The column headers are marked from left to right as: plan; M; and Q. Plan M Q Initial investment, $ −100,000 −110,000 Cash flow, $/year +15,000 +19,000 Life, years 20 20