Machine costs $200, has annual benefits of $200, and projected life of 2 years and i = 20%. Determine Present Worth with following Probabilities

P(B = $100) = 0.20, P(B = $200) = 0.40,P(B = $300) = 0.40

P(n = 1) = 0.30, P(n = 2) = 0.50, P(n = 3) = 0.20,

B and n are not statistically dependent P(B&n) = P(B) * P(n)

PW Compound = PW * P(B,n)

BenefitsLife (n)P(B,n)PWPW Compound

10010.2 *.03 = 0.06- 200 + 100*0.8333 =-117-7.00

10020.2 * 0.5 =0.1- 200 + 100*1.5278 =35335.28

10030.2 * 0.2 =0.04- 200 + 100*2.1065 =10.70.43

2001___ * 0.3 = ___- 200 + 200*_____=___-4.00

2002___ * 0.5 = ___- 200 + 200*_____=___21.11

2003___ * 0.2 = ___- 200 + 200*_____=___17.70

3001___ * 0.3 = ___- 200 + 300*_____=_______

3002___ * 0.5 = ___- 200 + 300*_____=_______

3003___ * 0.2 = ___- 200 + 300*_____=_______

Total = 155.74