05 ModelHW5 - a Determine the NPW of each project using...

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a) Determine the NPW of each project, using i=10% Project Cash Flows Year A NPW(A) B NPW(B) C NPW(C) D 0 $(1,000.00) $(1,000.00) $(1,000.00) $(1,000.00) $(1,000.00) $(1,000.00) $(1,000.00) 1 $- $- $600.00 $545.45 $(1,200.00) $(1,090.91) $900.00 2 $- $- $800.00 $661.16 $800.00 $661.16 $900.00 3 $3,000.00 $2,253.94 $1,500.00 $1,126.97 $1,500.00 $1,126.97 $1,800.00 NPW(A)= $1,253.94 NPW(B)= $1,333.58 NPW(C)= $(302.78) NPW(D)= b) Plot present worth as a function of interest rate for project B from 0 to 30% Int. rate NPW (B) 0 $1,900.00 1% $1,834.18 2% $1,770.65 3% $1,709.31 4% $1,650.06 5% $1,592.81 6% $1,537.46 7% $1,483.95 8% $1,432.17 9% $1,382.08 10% $1,333.58 11% $1,286.63 12% $1,241.14 13% $1,197.07 14% $1,154.35 15% $1,112.93 16% $1,072.76 17% $1,033.79 18% $995.97 19% $959.26 20% $923.61 21% $888.99 22% $855.35 23% $822.67 24% $790.89 25% $760.00 26% $729.95 27% $700.73 28% $672.29 29% $644.61 30% $617.66
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NPW(D) 1/[(1+i)^N] $(1,000.00) 1 $818.18 0.91 $743.80 0.83 $1,352.37 0.75 $1,914.35 -0.05 0 0.05 0.1 0.15 0.2 0.25 0.3 $- $200.00 $400.00 $600.00 $800.00 $1,000.00 $1,200.00 $1,400.00 $1,600.00 $1,800.00 $2,000.00 NPW (B) NPW (B) Interest Rate (i)
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This note was uploaded on 05/12/2010 for the course BUSINESS BS515 taught by Professor Johnson during the Fall '09 term at Drexel.

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05 ModelHW5 - a Determine the NPW of each project using...

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