PPT Slide
Plan W now looks better, but since it is riskier, it should look worse!
When costs are being discounted, we must use a lower discount rate to reflect higher risk. Thus, the appropriate discount rate would be 10% - 3% = 7%, making PVCOSTS-W = -$1,812 > old -$1,743.
With risk adjustment, PVCOSTS-W > PVCOSTS-C, so now choose Plan C.