The following graph has plots of the net PW of an investment as functions of %-ge changes in the values of the input variables V1, V2, V3, V4 and V5.V1V2V350% NGƯỜV5-30% -20%$200,000$150,000$100,000$50,000-10%-$50,000 --$100,000-$150,0000%Present WorthB. Decrease of $25,000C. Increase of 22%D. No change can affect economic feasibilityE. Decrease of 22%10%To which two variables is the present worth most sensitive to?A. V1 and V2B. V3 and V4C. V4 and V5D. V1 and V5OE. V2 and V3% change20% 30% 40% 50%What is the maximum allowable change in V2 before the investment becomes un-economical?OA. Increase of $25,000

Present worth refers to the discounted value of the future cash value . PW = Cash flow /(1+r)n…

The following graph has plots of the net PW of an investment as functions of %-ge changes in the values of the input variables V1, V2, V3, V4 and V5 VI V2 V3 504, Vios. VS -30% -20% $200,000 $150,000 $100,000 $50,000 -10% -$50,000 -$100,000 o Present Worth 10% 20% change 50%

The following graph has plots of the net PW of an investment as functions of %-ge changes in the values of the input variables V1, V2, V3, V4 and V5 VI V2 V3 504, Vios. VS -30% -20% $200,000 $150,000 $100,000 $50,000 -10% -$50,000 -$100,000 o Present Worth 10% 20% change 50%

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

The following graph has plots of the net PW of an investment as functions of %-ge changes in the values of the input variables V1, V2, V3, V4 and V5.
V1
V2
V3
50% NGƯỜ
V5
-30% -20%
$200,000
$150,000
$100,000
$50,000
-10%
-$50,000 -
-$100,000
-$150,000
0%
Present Worth
B. Decrease of $25,000
C. Increase of 22%
D. No change can affect economic feasibility
E. Decrease of 22%
10%
To which two variables is the present worth most sensitive to?
A. V1 and V2
B. V3 and V4
C. V4 and V5
D. V1 and V5
OE. V2 and V3
% change
20% 30% 40% 50%
What is the maximum allowable change in V2 before the investment becomes un-economical?
OA. Increase of $25,000

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