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Problem 78 (Easy-level). Estimates for a construction project appear in the following table: Optimist Estimate Most probable estimate Pessimist Cost ($) 60,000 80,000 120,000 Annual
Problem 78 (Easy-level). Estimates for a construction project appear in the following table:
Optimist Estimate | Most probable estimate | Pessimist | |
Cost ($) | 60,000 | 80,000 | 120,000 |
Annual benefit ($) | 16,000 | 15,000 | 13,500 |
Useful life (years) | 10 | 10 | 10 |
Residual value | 0 | 0 | 0 |
a. Calculate the weighted average for costs and benefits, assigning 4 times more weight to the most probable estimate.
b. Calculate the average internal rate of return.
Weighted Average Cost = $____________ Weighted Average Annual Profits = $_______ Average internal rate of return = ____%
To receive your credit, results must match your submitted procedures.
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