Determine the NPW, AW, FW and IRR of the following engineering project. • Initial Cost ($400,000) • The Study Period 15 years • Salvage (Market) Value of the project 15% of the initial cost • Operating Costs in the first year ($9.000) Cost Increase 3% per year • Benefits in the first year $40,000 • Benefit Increase 9% per year • MARR 8% per year Is the Project acceptable? WHY? A- BI E E </>

Determine the NPW, AW, FW and IRR of the following engineering project. • Initial Cost ($400,000) • The Study Period 15 years • Salvage (Market) Value of the project 15% of the initial cost • Operating Costs in the first year ($9.000) Cost Increase 3% per year • Benefits in the first year $40,000 • Benefit Increase 9% per year • MARR 8% per year Is the Project acceptable? WHY? A- BI E E </>

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter10: Capital Budgeting: Decision Criteria And Real Option

Section: Chapter Questions

Problem 21P

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