Lignin is a basic component of almost any plant that grows, so it is one of the most abundant organic compounds in the world. Almost anything derived from oil can be made out of lignin. The question is "can we do it cost-effectively and consistently?" A startup company has developed a process to derive plastics, carbon fiber and other advanced materials from lignin. The cash flow diagram for this process is shown below (in S millions). If the company's hurdle rate (MARR) is 15% per year, is this a profitable undertaking? Click the icon to view the diagram for cash flows. Click the icon to view the interest and annuity table for discrete compounding when the MARR is 15% per year. The present worth of the venture is $ million. (Round to two decimal places.) According to the PW Decision Rule, the investment V economically justified.

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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Lignin is a basic component of almost any plant that grows, so it is one of the most abundant organic compounds in the world. Almost anything derived from oil can be made out of lignin. The question is "can we do it
cost-effectively and consistently?" A startup company has developed a process to derive plastics, carbon fiber and other advanced materials from lignin. The cash flow diagram for this process is shown below (in $ millions). If the
company's hurdle rate (MARR) is 15% per year, is this a profitable undertaking?
Click the icon to view the diagram for cash flows.
Click the icon to view the interest and annuity table for discrete compounding when the MARR is 15% per year.
The present worth of the venture is $ million. (Round to two decimal places.)
According to the PW Decision Rule, the investment
V economically justified.
Transcribed Image Text:Lignin is a basic component of almost any plant that grows, so it is one of the most abundant organic compounds in the world. Almost anything derived from oil can be made out of lignin. The question is "can we do it cost-effectively and consistently?" A startup company has developed a process to derive plastics, carbon fiber and other advanced materials from lignin. The cash flow diagram for this process is shown below (in $ millions). If the company's hurdle rate (MARR) is 15% per year, is this a profitable undertaking? Click the icon to view the diagram for cash flows. Click the icon to view the interest and annuity table for discrete compounding when the MARR is 15% per year. The present worth of the venture is $ million. (Round to two decimal places.) According to the PW Decision Rule, the investment V economically justified.
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