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What is the likely present worth

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A firm is considering whether the following project should be undertaken if its life is 10 years and it has no salvage value. The firm uses an interest rate of 10% to evaluate engineering projects. The Net Revenue below is dollars per year for the life of the project. P is the probability of occurrence. What is the likely Present Worth? Should they undertake the project?

  • First cost P Net Revenue P
  • $300,000 0.3 $ 70,000 0.2
  • 400,000 0.4 90,000 0.5
  • 600,000 0.2 100,000 0.2
  • 700.000 0.1 105,000 0.1

Reference no: EM131097454

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