Evaluate the following Cash Flows using the criteria, MARR and cash flows stated

Question

Evaluate the following Cash Flows using the criteria, MARR and cash flows stated in parts a-e . Parts a-d should use a 6-year time span. Indicate for each part whether the proposal should be accepted or rejected. Cash Flows in Year MARR 0 1 2 3 4 5 6 a Present Worth (PW) 6% ($80,000) $13,200 $19,800 $22,100 $25,000 $25,000 $20,000 b Future Worth (FW) 8% ($80,000) $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 c Annual Worth (AW) 8% ($80,000) $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 d Internal rate of Return (IRR) 12% ($127,500) $19,800 $29,700 $33,150 $37,500 $37,500 $30,000 e Discounted Payback by end of year 4 6% ($104,000) $22,000 $26,000 $30,000 $35,000 $35,000 $35,000 Evaluate the following Cash Flows using the criteria, MARR and cash flows stated in parts a-e . Parts a-d should use a 6-year time span. Indicate for each part whether the proposal should be accepted or rejected. Cash Flows in Year MARR 0 1 2 3 4 5 6 a Present Worth (PW) 6% ($80,000) $13,200 $19,800 $22,100 $25,000 $25,000 $20,000 b Future Worth (FW) 8% ($80,000) $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 c Annual Worth (AW) 8% ($80,000) $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 d Internal rate of Return (IRR) 12% ($127,500) $19,800 $29,700 $33,150 $37,500 $37,500 $30,000 e Discounted Payback by end of year 4 6% ($104,000) $22,000 $26,000 $30,000 $35,000 $35,000 $35,000

Explanation / Answer

Cash Flows in Year Adjusted worth of cash flow MARR 0 1 2 3 4 5 6 0 1 2 3 4 5 6 a Present Worth (PW) 6% ($80,000) $13,200 $19,800 $22,100 $25,000 $25,000 $20,000 ($80,000) $12,453 $17,622 $18,556 $19,802 $18,681 $14,099 Present Worth (PW) $21,213 Accept b Future Worth (FW) 8% ($80,000) $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 ($126,950) $29,387 $27,210 $25,194 $23,328 $21,600 $20,000 Future Worth (FW) $19,769 Accept c Annual Worth (AW) 8% ($80,000) $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 ($80,000) $18,400 $16,800 $15,200 $13,600 $12,000 $10,400 Annual Worth (AW) $6,400 Accept d Internal rate of Return (IRR) 12% ($127,500) $19,800 $29,700 $33,150 $37,500 $37,500 $30,000 ($127,500) $19,800 $29,700 $33,150 $37,500 $37,500 $30,000 Internal rate of Return (IRR) 11% Reject (IRR

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