Question
Decision D6, which has three possible choices (X, Y, or Z), must be made in year 3 of a 6-year study period in order to
Decision D6, which has three possible choices (X, Y, or Z), must be made in year 3 of a 6-year study period in order to maximizeE(PW). Using an MARR of 13% per year, the investment required in year 3, and the estimated cash flows for years 4 through 6, determinewhich decision should be made in year 3.
Investment, Year 3 Cash Flow,(Year 3) Cash Flow, $1000 (Year 4) Cash Flow, $1000 (Year 5) Cash Flow, $1000 (Year 6) Outcome Probability3456High
(X)$-280,000 $50 $50 $50 0.76Low
(X)$40 $30 $20 0.24 High
(Y)$-54,000 $30 $40 $50 0.45Low
(Y)$30 $30 $30 0.55 High
(Z)$-270,000 $190 $170 $150 0.7
Low (Z)$-30$-30$-300.3
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