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The product development group of a high-tech electronics company developed five proposals for new products. The company wants to expand its product offerings, so it
The product development group of a high-tech electronics company developed five proposals for new products. The company wants to expand its product offerings, so it will undertake all projects that are economically attractive at the company's MARR of 18% per year. The cash flows (in $1000 units) associated with each project are estimated. Which projects, if any, should the company accept on the basis of a present worth analysis? Project Initial Investment Operating Cost, per Year Revenue, per Year Salvage Value Life $-400 $-130 $325 $4 3 years B $-300 $-190 $250 $26 $-600 $-350 $450 $3 5 years D $-500 $-400 $350 $20 E $-1,700 $-500 $550 $70 4 years 10 years 8 years The present worth of project A is $ 26417.76 * The present worth of project B is $ -25387 The present worth of project C is $ - 285972 The present worth of project Dis $ -698558 The present worth of project E is $ -1529392 Project A is accepted Project B is rejected Project C is rejected
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