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# Module20 - Making the Decision with Multiple Projects...

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Making the Decision with Multiple Projects Deterministic Evaluation: Unequal Lives Part I

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Key Concepts Last Module: Total and Incremental Investment Analysis This Module: Unequal Lives Analysis Evaluate revenue and service projects with unequal lives.
Cases to Examine Revenue Projects with Equal Lives Revenue Projects with Unequal Lives Service Projects with Equal Lives Service Projects with Unequal Lives All projects with mixed lives.

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Reconsider our Satellite Example Assume the following three options are available: Purchase and launch new satellite Investment of \$200M, 5 year life , \$250K per year, \$15M SV Purchase satellite in orbit from competitor Investment of \$175M, 3 year life , \$300K per year, no SV Lease satellite in orbit from competitor Investment of \$250K, 2 year contract , \$100M per year, no
Revenue Projects and Unequal Lives Consider our purchase options: New satellite with 5-year horizon. “Used” satellite with 3-year horizon. Combined project (purchasing both) has 5 year horizon. Question : if comparing 3- and 5-year horizon projects, what happens in the final two years?

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Critical assumption : We can assume the longest horizon (5 years in this example) for all projects and assume all proceeds are invested at the MARR through that time. Thus: find FW of each project at that time (5) and take the maximum. But, this is the same as selecting the project with the highest PW!
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Module20 - Making the Decision with Multiple Projects...

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