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What would you do if economic lives of the projects were unequal? Research, Explain and Make some suggestions based on the assumption that the projects picture are mutually exclusive

What would you do if economic lives of the projects were unequal? Research, Explain and Make some suggestions based on the assumption that the projects picture are mutually exclusive

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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What would you do if economic lives of the projects were unequal? Research, Explain and Make
some suggestions based on the assumption that the projects picture are mutually exclusive. 

5950000 1550000 Year 2 2900000 Year 3 4400000 Year 4 -1400000 Year 5 8100000 5150000 Year 6 8100000 13250000 Payback period potline 7B NPV potline 7B IRR potline 7B 4.36 3.594 425.21 19.15% Independent Reject Acсеpt Accept Potline 7B because it is more than 4 years Раyback period NPV 4.36 3,594,425.21 19.15% because it is positive because it is higher than 11.90% IRR Mutually exclusive Reject Reject Potline 7B because it is more than4 years Payback period NPV 4.36 because it is less that potline 7A because it is less that potline 7A 3,594,425.21 IRR 19.15% Reject Potline 7B Initial Outlay Profitability Index Mutually exclusive Rank 16950000 1.21 Reject 2nd because it is less that potline 7A
Transcribed Image Text:5950000 1550000 Year 2 2900000 Year 3 4400000 Year 4 -1400000 Year 5 8100000 5150000 Year 6 8100000 13250000 Payback period potline 7B NPV potline 7B IRR potline 7B 4.36 3.594 425.21 19.15% Independent Reject Acсеpt Accept Potline 7B because it is more than 4 years Раyback period NPV 4.36 3,594,425.21 19.15% because it is positive because it is higher than 11.90% IRR Mutually exclusive Reject Reject Potline 7B because it is more than4 years Payback period NPV 4.36 because it is less that potline 7A because it is less that potline 7A 3,594,425.21 IRR 19.15% Reject Potline 7B Initial Outlay Profitability Index Mutually exclusive Rank 16950000 1.21 Reject 2nd because it is less that potline 7A
Year 3 Year 4 Year 5 3900000 -2400000 3900000 1500000 3900000 3900000 5400000 Year 6 9300000 Payback period potline 7C NPV potline 7C IRR potline 7C 3.62 1,980,004.19 16.72% Potline 7C Payback period NPV Independent 3.62 Аcсеpt Accept because it is less than 4years 1,980,004.19 because it is positive because it is higher than 11.90% IRR 16.72% Acсept Potline 7C Payback period NPV Mutually exclusive 3.62 Ассept because it is less than 4 years Reject Reject because it is less that potline 7A because it is less that potline 7A 1,980,004.19 IRR 16.72% Potline 70 Initial Outlay Profitability Index Mutually exclusive Rank 14100000 1.14 Reject because it is less that potline 7A 3rd
Transcribed Image Text:Year 3 Year 4 Year 5 3900000 -2400000 3900000 1500000 3900000 3900000 5400000 Year 6 9300000 Payback period potline 7C NPV potline 7C IRR potline 7C 3.62 1,980,004.19 16.72% Potline 7C Payback period NPV Independent 3.62 Аcсеpt Accept because it is less than 4years 1,980,004.19 because it is positive because it is higher than 11.90% IRR 16.72% Acсept Potline 7C Payback period NPV Mutually exclusive 3.62 Ассept because it is less than 4 years Reject Reject because it is less that potline 7A because it is less that potline 7A 1,980,004.19 IRR 16.72% Potline 70 Initial Outlay Profitability Index Mutually exclusive Rank 14100000 1.14 Reject because it is less that potline 7A 3rd
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