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The table below is a partially completed Sensitivity Analysis for an engineering project under consideration with regards to five input variables as follows: First cost,
The table below is a partially completed Sensitivity Analysis for an engineering project under consideration with regards to five input variables as follows: First cost, MARR, O & M Costs, Benefits and Economic Life (N). Base case values are given in the leftmost column. The analysis uses the Annual Worth model for evaluation.
What is the calculated Annual Worth after reducing the First Cost (P) by 10% of the base value?
Sensitivity Analysis Input Factor Adjustments Base Case (0)% Annual Worth Values - 10% + 10% $15,000 $65,000 $115,000 Input Factors (Base Case #'s) First Cost (P) (52 million) Benefits (B) (S0.5 million yr) O & M (C) (S0.2 million/yr) MARR (1) (10%) Econ. Life (N) (20 years) $85,000 $65,000 $45,000 $88,500 $65,000 $41,500 $56,200 $65,000 $72,000 Sensitivity Analysis Input Factor Adjustments Base Case (0)% Annual Worth Values - 10% + 10% $15,000 $65,000 $115,000 Input Factors (Base Case #'s) First Cost (P) (52 million) Benefits (B) (S0.5 million yr) O & M (C) (S0.2 million/yr) MARR (1) (10%) Econ. Life (N) (20 years) $85,000 $65,000 $45,000 $88,500 $65,000 $41,500 $56,200 $65,000 $72,000Step by Step Solution
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