Suppose your given the cash flow data of 3 project alternatives in the table below with
3 years of useful lives each and a study period of 3 years under consideration.
Alpha Beta Gamma
Investment Cost $ 70,000 $ 50,000 $ 120,000
1st Year- Revenue $ 40,000 $ 30,000 $ 60,000
2nd Year- Revenue $ 50,000 $ 40,000 $ 60,000
3rd Year- Revenue $ 60,000 $ 50,000 $ 60,000
Salvage Value $ 22,750 $ 5,000 $ 46,000
What project would you choose if MARR is 9.762% compounded semi-annually, using
a. Present Worth Method ?
b. Internal Rate of Return Method ?
