EBGN321 - Engineering Econ

At your summer internship at Awesomeness Oil and Gas (AOG) your boss asked you to review a recent acceleration project and determine the economic viability. All cash ows are described in thousands of escalated dollars. AOG uses a 15% escalated dollar discount rate and anticipates ination to be equal to 1% each year of the model. AOG uses a valid ROR as its primary decision making tool, but also would like to see NPV and PVR for economic support. Current Situation -$300 $800 $600 $400 $400 $400 $400 $400 0 1 2 3 4 5 6 7 Upgrade -$2,200 $2,400 $1,500 $1,100 $800 $600 $200 $0 0 1 2 3 4 5 6 7