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4. A company, with a MARR of 12%, has a capital investment project with the following optimistic, most likely, and pessimistic estimates: Optimistic Most Likely

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4. A company, with a MARR of 12%, has a capital investment project with the following optimistic, most likely, and pessimistic estimates: Optimistic Most Likely Pessimistic Investment Net Annual Revenues Salvage Value Useful Life $80,000 35,000 30,000 12 years $95,000 30,000 20,000 10 years $120,000 20,000 5,000 6 years a) Compute the annual worth of each of the three estimate conditions. Is the project viable? Explain your answer. b) Since the parameters will probably 'blend', use the optimistic, most likely, pessimistic, mean value approach and determine if the project is viable. Blend equation (optimistic + 4*most likely+ pessimistic)/6

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