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Annual savings due to energy efficiency thermo well have a most like

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Annual savings due to energy efficiency thermo well have
a most likely value of $30,000. The most optimistic value is
$40,000 with a probability of 0.2 and a most pessimistic
value of $20,000 at 0.3. The First Cost is $150,000, the
interest rate 10%, and the project has a life of 10 years
with no salvage value. What is the expected value for the
annual savings?
Solution
Hi,
Expected value for the Annual Savings = 30000*.50 +
40000*.20 + 20000*.30 = $29000
Answer is $29000
Thanks.

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Annual savings due to energy efficiency thermo well have a most likely value of $30,000. The most optimistic value is $40,000 with a probability of 0.2 and a most pessimistic value of $20,000 at 0.3. The First Cost is $150,000, the interest rate 10%, and the project has a life of 10 years with no sa ...
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