Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

How can I get these numbers (P, ML, O) that are in the second table? Consider investment in a new crane. Assume a MARR of

image text in transcribed

How can I get these numbers (P, ML, O) that are in the second table?

Consider investment in a new crane. Assume a MARR of 8%. Estimation Condition Optimistic Most likely Pessimistic (0) (M) (P) $240,000 $270,000 $340,000 8 yr 5 yr $20,000 $15,000 $8,000 $100,000 $80,000 $50,000 $10,000 $15,000 $20,000 Investment, 1 Useful life, Market valuc, MY Annual revenues, R Amual expenses, E 10 x Pause and Solve Considering O-MI-P for I and R (fix F, MV, and life at their M. levels). Value in each cell is the PW for the project. Investment, Revenues, R Optimistic (0) Most Likely (M) Pessimistic (1) Optimistic, (0) $256,568 $226,568 $156,568 Most likely, (M) $141,636 $111,636 S41,636 Pessimistic, (P) -$30,764 -$60,764 -$130,764 This suggests that perhaps some additional effort should be place on getting refined estimates of revenues. Of course, the complete study needs to consider the other factors

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Entrepreneurial Finance

Authors: J. Chris Leach, Ronald W. Melicher

7th Edition

0357442040, 978-0357442043

More Books

Students also viewed these Finance questions