120 points) o annual revenue will be from $50,000 to $400,000, but most likely a

Question

120 points) o annual revenue will be from $50,000 to $400,000, but most likely about $300,000 over the The Polynesian Urbanization Authority (PUA) buys new comput They estimat next 5 years. Operating and Maintenance costs will remain constant at $75,000/year. Their MARR-9% Inflation is a constant 2.1% ers for $100,000 in May (10 points) I. What is the expected revenue for the company over 5 years using a beta distribution? (10 points) . What is the present worth of this revenue, adjusted for inflation?

Explanation / Answer

Answer(2) Year 0 1 2 3 4 5 Initial Cost -100000 Annual Revenue 300000 300000 300000 300000 300000 Less:- O&M Cost 75000 75000 75000 75000 75000 EBIT 225000 225000 225000 225000 225000 PVF@9% 1 0.917 0.842 0.772 0.708 0.650 Present Worth of Revenue -100000 206422.02 189378.00 173741.28 159395.67 146234.56 FVF @ 2.1% 1.110 1.087 1.064 1.043 1.043 1 Value at Year 5 -110950.36 224315.35 201580.85 181132.78 166176.86 146234.56 FV Of revenue 808490.04 PVAF@9% 3.8896 Present Worth of Revenue after Adjusting inflation 207859.4302 Answer(1) Revenue 1500000 Less:- O&M Cost 375000 Less:- Initial Cost 100000 Expected Revenue 1025000

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