A proposed project will cost S1000 four years from today Beg

A proposed project will cost S1,000 four years from today. Beginning at the end of year five, $300 in annual benefits will be received, continuing until the end of year nine. What is the project\'s present (year 0) worth at MARR = 10%? a. -$50. b. $94. c. $137. d. $180. e. Cannot be determined.

Solution

Ans: $94

Explanation:

PW = -1000(P/F, 10%, 4) + 300(P/A, 10%, 5) (P/F, 10%, 4)

      = -1000(0.6830) + 300(3.791) (0.6830)

     = -683 + 777

     = $94