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pls answer asap with solutions. Will upvote immediately! thank you A new device must be purchased immediately by ABC Company. These most likely (best) estimates
pls answer asap with solutions. Will upvote immediately! thank you
A new device must be purchased immediately by ABC Company. These most likely (best) estimates have been developed by a group of engineers: Because considerable uncertainty surrounds these estimates, it is desired to evaluate the sensitivity of PW with respect to 50% changes in the most likely estimates of (a) annual savings, (b) capital investment and (c) salvage value. For this alternative, to which of the three factors is PW most sensitive to? Provide answers in the succeeding questions. 1. What is the Present Worth (PW) of the original projected cash flows or estimates? 2. Describe the sensitivity of PW to the 1- critical factor. What is the slope of the annual savings? 3. Describe the sensitivity of PW to the 2nd critical factor. What is the slope of the capital investment? 4. Describe the sensitivity of PW to the 3rd critical factor. What is the slope of the salvage value? 5. What is the most sensitive / critical factor? Select A, B or C. A. Annual Savings B. Capital InvestmentStep by Step Solution
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