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Unformatted text preview: The salvage varies as a percentage of the original investment and has a normal distribution with mean 25% and standard deviation of 5%. The inflation rate for it is the same as the general inflation rate. 2 1/2 point for setting this up, 1/2 point for each answer below. Describe how you obtained each. Given an MARR of 20%: a) Determine the probability of a positive net present value, using at least 200 samples. b) What would you negotiate as your unit price as, so to be 75% sure that you achieved a positive net present value at 20% MARR? (to the nearest dollar) Continued on pages 2 through 5 ISE460 Fall 2008 Session 26 11/20/08 Assignment 13 No. 3 (4 1/2 points) ISE460 Fall 2008 Session 26 11/20/08 Assignment 13 ISE460 Fall 2008 Session 26 11/20/08 Assignment 13 c) would your recommendation change if the MARR was 20%?...
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This note was uploaded on 01/20/2009 for the course ISE 460 taught by Professor Bottlik during the Fall '06 term at USC.
 Fall '06
 Bottlik

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