Mutually exclusive investment alternatives problem

timer Asked: Nov 23rd, 2016

Question description

Engineering projects, A, B1, B2, C are being considered with cash flows estimated over 10 years are shown in the accompanying table. Projects B1 and B2 are mutually exclusive, Project C depends upon B2, and Project A depends upon B1. The capital investment budget limit is $100,000, and the MARR is 12% per year.

  • List all possible alternatives
  • Develop the net cash flows for all feasible alternatives.
  • Which investment alternative (combination of projects) should be selected? Use the Present worth (PW method





Capital Investment





Annual revenues less expenses





Market Value





Useful life (years)





  • AW method
  • FW method

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