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IME314 Sensitivity Problem - HW10

IME314 Sensitivity Problem - HW10 - the MARR = 10 per year...

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California Polytechnic State University – SLO Industrial and Manufacturing Engineering Department IME 314 – Engineering Economics The best (most likely) cash flow estimates are given below for a new piece of equipment being considered for immediate installation. Because of the new technology built into this machine, it is desired to investigate its PW over a range of +/- 40% changes in estimates for (a) capital investment, (b) annual net cash flow, (c) salvage value and useful life. Based on the best estimates, plot a diagram that summarizes the sensitivity of present worth to percent deviation changes in each separate factor estimate when
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Unformatted text preview: the MARR = 10% per year. Capital Investment $11,500 Revenues/year $ 5,000 Expenses/year $ 2,000 Salvage Value $ 1,000 Useful life 6 years Create a sensitivity graph (spiderplot) similar to that shown in the sensitivity handout. Show the effects on the PW (% change) attributed to varying the above listed factors +/- 40% from the estimated value, while keeping the other factors at the estimated values. Use EXCEL and show all of your work. 9aae11135f78fa1c8f03a9010a15e30557140a0e.doc 5/29/2009 02:40:00 PM...
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