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SolnEx2-14

# SolnEx2-14 - 76800 73000 22360 1072 1000 \$[Total Revenue...

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Solution to Example 2.14 DATA MARR = 12% per year Yr. 1 price 350 \$ per unit Price change -20% per year First Cost 150000 1000 \$ Ann.Op.Cost 20000 1000 \$ per year Prod. Cost 38 \$ per unit Year 0 1 2 3 4 5 Sales 200 400 500 300 200 1000 units/yr. CALCULATIONS Year 0 1 2 3 4 5 Price 350 280 224 179.2 143.36 \$ per unit Total Revenue 70000 112000 112000 53760 28672 1000 \$ [Price*Sales] Total Cost 150000 27600 35200 39000 31400 27600 1000 \$ [Yr.0, First Cost; Yrs 1-5, Ann.Op.Cost+Prod.Cost*Sales] Net Revenue -150000 42400
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Unformatted text preview: 76800 73000 22360 1072 1000 \$ [Total Revenue - Total Cost] PW, by year-150000 37857.14 61224.49 51959.96 14210.18 608.2816 1000 \$ [Net Revenue / (1+MARR)^Year] Total PW \$15,860 1000 \$ [sum of PW over years] Alternate Way for PW \$15,860 [using NPV function for years 1-5] It is not necessary to have two ways to compute PW. This is just to show you the NPV function in MS-Excel....
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