Suppose that, for a certain potential investment project, the optimistic, most likely, and pessimistic estimates are as shown in the accompanying table Capital investment Useful life Market value Net annual cash flow MARR (per year) Optimistic Most Likely Pessimistic 98,000 10 years $20,000 30,000 592,000 13 years 533,000 S34,000 12% 122,000 5 years S0 $16,000 12% 12% a. What is the AW for each of the three estimation conditions? b. It is thought that the most critical factors are useful life and net annual cash flow. Develop a table showing the net AW for all combinations of the estimates for these two factors, assuming all other factors to be at their most likely values Click the icon to view the interest and annuity table for discrete compounding when the MARR is 12% per year. a. Calculate the AW value for the Optimistic Estimate AWoptimistic (12%)-$L (Round to the nearest hundreds ) Calculate the AW value for the Most Likely Estimate. AWmost ikely (12%) $L (Round to the nearest hundreds.) Calculate the AW value for the Pessimistic estimate AWpessimistic (12%)-sL (Round to the nearest hundreds ) b. Calculate the AW values for all combinations of the estimates for useful life and net annual cash flow. Other factors are at their most likely values. (Round to the nearest hundreds.) Net annual cash flow Most Likely Useful lifeOptimistic Optimistic Most Likehy Pessimistic Suppose that, for a certain potential investment project, the optimistic, most likely, and pessimistic estimates are as shown in the accompanying table Capital investment Useful life Market value Net annual cash flow MARR (per year) Optimistic Most Likely Pessimistic 98,000 10 years $20,000 30,000 592,000 13 years 533,000 S34,000 12% 122,000 5 years S0 $16,000 12% 12% a. What is the AW for each of the three estimation conditions? b. It is thought that the most critical factors are useful life and net annual cash flow. Develop a table showing the net AW for all combinations of the estimates for these two factors, assuming all other factors to be at their most likely values Click the icon to view the interest and annuity table for discrete compounding when the MARR is 12% per year. a. Calculate the AW value for the Optimistic Estimate AWoptimistic (12%)-$L (Round to the nearest hundreds ) Calculate the AW value for the Most Likely Estimate. AWmost ikely (12%) $L (Round to the nearest hundreds.) Calculate the AW value for the Pessimistic estimate AWpessimistic (12%)-sL (Round to the nearest hundreds ) b. Calculate the AW values for all combinations of the estimates for useful life and net annual cash flow. Other factors are at their most likely values. (Round to the nearest hundreds.) Net annual cash flow Most Likely Useful lifeOptimistic Optimistic Most Likehy Pessimistic
