The range of estimates using present worth analysis Financial Management
An equiptment alternative is being economically elavuated by three engineers at a consulting firm. The first cost will be $77k and the life is estimated at 6 years with a salvage value of 10k. The engineers disagree on the estimated revenue the equiptment will generate. Joe has made an estimate of $10k per year. Jane has made an estimate of $14k per year and Carlos estmates $18k per year. The before tax MARR is 8% per year.
a) What is the minimum amount of revenue per year that would be required to breakeven?
b) What are the range of estimates using Present Worth analysis?
