When the country's economy is expanding, AB Investment Company is optimistic and expects a MARR of 15%

Question:

When the country's economy is expanding, AB Investment Company is optimistic and expects a MARR of 15% for new investments. However, in a receding economy the expected return is 8%. Normally a 10% return is required. An expanding economy causes the estimates of asset life to go down about 20%, and a receding economy makes the n values increase about 10%. Calculate and observe or plot the sensitivity of PW values versus

(a) The MARR

(b) The life values for the two plans detailed below, using the most likely estimates for the other factors.

When the country's economy is expanding, AB Investment Company i

MARR
Minimum Acceptable Rate of Return (MARR), or hurdle rate is the minimum rate of return on a project a manager or company is willing to accept before starting a project, given its risk and the opportunity cost of forgoing other... Expected Return
The expected return is the profit or loss an investor anticipates on an investment that has known or anticipated rates of return (RoR). It is calculated by multiplying potential outcomes by the chances of them occurring and then totaling these...