A company that makes food-friendly silicone (for use in cooking and baking pan c

Question

A company that makes food-friendly silicone (for use in cooking and baking pan coatings) is considering the independent projects shown, all of which can be viable for only 10 years. If the company's MARR is 12% per year, determine which should be selected on the basis of a present worth analysis. The financial values are in $1000 units. $-6,200 1200 irst Cost 1,200 200 2,400 400 7,200 200 nual Net Income, per Year Ivage Value The present worth of project A is determined to be $ The present worth of project B is determined to be $ The present worth of project C is determined to be $ The present worth of project D is determined to be$ Project A is (Click to select) Project B s i(Click to select Project C is (Click to select) Project D is (Click to select)

Explanation / Answer

PV excel formula :
=PV(0.12,10,200)
=PV(0.12,10,400)
=PV(0.12,10,1200)
=PV(0.12,10,1200)

Hence only project C shall be selected.

A B C D Cost 1200 2400 6200 7200 Income 200 400 1200 1200 Salvage value 6 6 7 7 PV of income $ -1,130.04 $ -2,260.09 $ -6,780.27 $ -6,780.27 PV of salvage 1.93183942 1.93183942 2.25381266 2.25381266 Total benefits $   1,131.98 $   2,262.02 $   6,782.52 $   6,782.52 Present worth $       -68.02 $     -137.98 $      582.52 $     -417.48

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