The capital fund for new investment at Systems Corporation is limited to $75,000 for next year. You have been asked to recommend one or more of three projects as economically acceptable for inĀ­vestment at the corporate MARR of 15% per year. Perform the analysis in two ways: (a) by hand, and (b) using NPV functions and a spreadsheet.


(a) By hand

Sample calculations of PW for bundles



PWA = -25,000 + 6000(P/A,15%,4) + 4000(P/F,15%,4)

= -25,000 + 6000(2.8550) + 4000(0.5718)

= $-5583



PWA,B = -55,000 + 15,000(P/A,15%,4) + 3000(P/F,15%,4)

= -55,000 + 15,000(2.8550) + 3000(0.5718)

= $-10,460



Select bundle 3 (project C) with the largest, and only, PW > 0

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