Question
Suppose that for a certain potential investment project, the optimistic, most likely, and pessimistic estimates are shown in the accompanying table. (Section 11.4) SHOW YOUR
Suppose that for a certain potential investment project, the optimistic, most likely, and pessimistic estimates are shown in the accompanying table. (Section 11.4) SHOW YOUR WORK
Optimistic | Most Likely | Pessimistic | |
Capital Investment | -$90,000 | -$100,000 | -$120,000 |
Useful life | 12 years | 10 years | 6 years |
Market value | $30,000 | $20,000 | $0 |
Net annual cash flow | $35,000 | $30,000 | $20,000 |
MARR (per year) | 10% | 10% | 10% |
It is thought that the most critical factors are useful life and net annual cash flow. Develop a table showing the net AW for all combinations of estimates for these two factors, assuming all other factors to be at theirpessimestic values.
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