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D-106 The first cost (FC), life (n), and annual benefits (A) for a prospective project are uncertain. Optimistic (OP), most likely (ML), and pessimistic (PS)

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D-106 The first cost (FC), life (n), and annual benefits (A) for a prospective project are uncertain. Optimistic (OP), most likely (ML), and pessimistic (PS) esti- mates are given. If the interest rate is 25%, what is the present worth difference between a total worst-case scenario and a total best-case scenario? Estimate Most Parameter Pessimistic Likely Optimistic First cost $150,000 $100,000 $80,000 Annual cash 25,000 45,000 50,000 flows Project life, 5 10 in years (a) $15.8 (b) $42.2 (c) $181.3 (d) $282.5

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