Check my work A company that makes tood-friendly silicone (for use in cooking an
ID: 1138768 • Letter: C
Question
Check my work A company that makes tood-friendly silicone (for use in cooking and baking pan coatings) is considering the independent projects shown, all of which can be viable for only 10 years. If the company's MARR is 8% per year, determine which should be selected on the basis of a present worth analysis. The financial values are in $1000 units $-800 100 4 $-2,200 $300 5 4,600 1600 5 $-5,600 $1600 5 First Cost nnual Net Income, per Year alvage Value The present worth of project A is determined to be $ The present worth of project B is determined to be $ The present worth of project C is determined to be $ The present worth of project D is determined to be $ Project A 1 (Click to select) rejected Project B i accepted ProjectCis (Click to select) Proiect D is click to selectìExplanation / Answer
(1) PW, Project A ($) = - 800,000 + 100,000 x P/A(8%, 10) + 4,000 x P/F(8%, 10)
= - 800,000 + 100,000 x 6.7101** + 4,000 x 0.4632**
= - 800,000 + 671,010 + 1,852.8
= - 127,137.2
(2) PW, Project B ($) = - 2,200,000 + 300,000 x P/A(8%, 10) + 5,000 x P/F(8%, 10)
= - 2,200,000 + 300,000 x 6.7101** + 5,000 x 0.4632**
= - 2,200,000 + 2,013,030 + 2,316
= - 184,654
(3) PW, Project C ($) = - 4,60,000 + 1,600,000 x P/A(8%, 10) + 5,000 x P/F(8%, 10)
= - 4,600,000 + 1,600,000 x 6.7101** + 5,000 x 0.4632**
= - 4,600,000 + 10,736,160 + 2,316
= 6,138,476
(4) PW, Project D ($) = - 5,600,000 + 1,600,000 x P/A(8%, 10) + 5,000 x P/F(8%, 10)
= - 5,600,000 + 1,600,000 x 6.7101** + 5,000 x 0.4632**
= - 5,600,000 + 10,736,160 + 2,316
= 5,138,476
(5)
Project A - Rejected (Since PW < 0)
Project B - Rejected (Since PW < 0)
Project C - Accepted (Since PW > 0)
Project D - Accepted (Since PW > 0)