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An energy system has a first cost of $800,000 and an expected life of ten years with no salvage value. The most likely annual benefits
An energy system has a first cost of $800,000 and an expected life of ten years with no salvage value. The most likely annual benefits are $100,000. The confident annual benefits are $160,000 with a probability of 0.2. The pessimistic annual benefits are $80,000 with a probability of 0.25. Assume an interest rate of 10%. 1) Calculate the expected annual savings and the expected present worth. 2) Calculate the PW for the pessimistic, most likely, and confident estimates of the annual savings and the expected PW of these. 3) Are the answers to these questions the same and why or why not
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