PPT Slide

Year Plan W Plan C

0 ($500) ($1,000)

1 (500) (300)

2 (500) (300)

3 (500) (300)

The two systems are of average risk, so k = 10%. Which to accept?

PVCOSTS-W = -$1,743. PVCOSTS-C = -$1,746

W’s costs are slightly lower so pick W.

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