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Three companies have provided estimates for a proposed project: Item Company A Company B Company C Capital Investment $100,000 $150,000 $125,000 Useful Life (Months)

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Three companies have provided estimates for a proposed project: Item Company A Company B Company C Capital Investment $100,000 $150,000 $125,000 Useful Life (Months) 96 144 120 Market Value $40,000 0 $30,000 Net Annual Cash $45,000 $500,000 $35,000 Flow MARR 12% 12% 12% What is the AW for each of the 3 estimates? It is thought useful life is the estimate which has the greatest volatility, if the pessimistic estimate is 8 years and the optimistic estimate is 12 years what is the worst and best case conditions for AW and which proposal would you recommend?

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