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5. You have been assigned to perform a project selection based on profitability index. You have collected data on the three project alternatives A1, A2,

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5. You have been assigned to perform a project selection based on profitability index. You have collected data on the three project alternatives A1, A2, and A3 and your team has calculated the following (table) present worth equivalent for the benefits, costs, and investments at a social discount rate of 10%. The service life of each alternative is identical. What is the incremental Pl(10%) for project A2 v A3? B 1 C' PW(10%) A1 $12,000 $5,000 $4,000 $3,000 A2 $35,000 $20,000 $8,000 $7,000 A3 $21,000 $14,000 $1,000 $6,000 a. 1.05 b. 1.13 C. 1.15 d. 1.17 6. Find the capitalized equivalent worth for the following project cash flow series with repeating cycles at an interest rate of 10%. $500 $500 a. $1,147 b. $1,679 $400 $400 C. $3,619 $300 $300 d. $6,381 $200 $200 0 1 2 3 4 5 7 8 7. Find the IRR (*) for the following cash flow: End of Net cash flow CE(10%) = ? year 0 -5000 1 0 2 0 3 0 4 15,000 a. 21% b. 28% C. 32% d. Cannot be calculated with the information provided

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