A project with uncertainty is under consideration for implementation. The values are shown in the table below. Calculate the Expected Value of the Net Present Worth of this project. FC Annual Benefit $50,000 $22,000 $37,000 $20,000 $5,000 ProbaR Proba 23% 35% 21% 27% 65% 10% 7% 7% 8 7% 7% 7% 7% ($100,500) ($100,500) ($100,500) ($100,500) ($100,500) ($100,500) 43% 55% 35% 75% 85% 5% 10 10 10 $95,000 E co co co
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- No ai plsI want you to provide me the Cash Flow diagram of the problem. Only cash flow diagram, the solution is already there. Thanks in advance! The annual estimated cash flow is $140,000. The salvage value will be 12% of the initial price after 5 years. The discount rate (r) is 18% Let us assume the initial price of the doughnut machine be X. PV of cash inflows=PV of cash outflows$140,000×PVAF4,18%+.12X×PVF5,18%=X$140,000×2.69006180465+.12X×0.43710921621=X$376,608.652651=X-0.05245310594$376,608.652651=0.94754689406XX=$397,456.479475 The maximum purchase price of the doughnut machine is $397,456.48.Alternative 3 is incorrect EUAC=( Equivalent Annaul COst of Initial Investment)+ (Expected Moderate annaual flood damage cost )+ (expected severe annaual flood cost )
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