1. The XYZ Corp. is considering the purchase of a delivery truck for $50,000.It is expected to generate net cash flow of $25,000 per year for three years after which, or at the end of year 3, will be sold for an estimated $20,000. With an MARR of 5%, can this project be accepted?

2. Assume the net cash flow for the project above is not equal, but rather $30,000 in year 1, $25,000 in year 2, and $20,000 in year 3, with the same salvage value at the end, is this project acceptable with a 5% MARR? Which of the two, #1 or #2, is better?

3. The ACME car wash is required by the EPA to recycle its water. It is looking into two possible solutions to accomplish this task. Solution 1 requires the purchase of a piece of equipment for $200,000 and annual costs of production of $10,000 for each of its expected 10 year life. It will cost $20,000 to dispose of this equipment after its 10 year life is over. Option 2 involves the purchase of equipment that costs $100,000 and has operating costs of $20,000 per year for each of the 10 years of its life, after which it had a disposal cost of $10,000. Which option would you choose with a MARR of 5%?

4. Joe Smith is 22 years old. He expects to work until age 62 and can earn a 5% annual rate of return over this time period. How much money must he invest each year, in equal amounts, to achieve his goal of having a $1 million portfolio after he stops working? How much will he need to invest each year if he waits until age 32? Age 42? Age 52?