A project has a life of 10 years and no salvage value Your f

A project has a life of 10 years and no salvage value. Your firm uses an MARR of 8% to evaluate projects. The project has uncertain costs and revenue as shown in the table below: Determine the EUAW for the combination of initial cost and revenue with the highest probability of occurrence. Express your answer in $ to the nearest $100.

Solution

Project A

cost

130000*.25*1=32500$

revenue

31000*.15*6.7095=31200 $

project B

cost

250000*.60*1 =150000$

revenue

44000*0.55*6.7095=162400$

Project C

Cost

340000*.15*1=51000$

revenue

52000*.30*6.7095 =104700$

project C should be selected

6.7095 is the vale of PF for 10 years @8%