Determine which of the following independent projects should be selected for investment if a maximum of $240,000 is available and the MARR is 10% per year. Use the PW method to evaluate muÂtually exclusive bundles to perform your analysis.
 FIGURE 1.png)
Develop bundles with less than $240,000 investment; select the one with the largest PW.
 ANSWER.png)
PW1 = -100,000 + 50,000(P/A,10%,8)
= -100,000 + 50,000(5.3349)
= $166,746
PW2 = -125,000 + 24,000(P/A,10%,8)
= -125,000 + 24,000(5.3349)
= $3,038
PW3 = -120,000 + 75,000(P/A,10%,8)
= -120,000 + 75,000(5.3349)
= $280,118
PW4 = -220,000 + 39,000(P/A,10%,8)
= -220,000 + 39,000(5.3349)
= $-11,939
PW5 = -200,000 + 82,000(P/A,10%,8)
= -200,000 + 82,000(5.3349)
= $237,462
All other PW values are obtained by adding the respective PW for bundles 1 through 5.
Conclusion: Select PW = $446,864, which is bundle 7 (projects A and C) with $220,000 total investment.
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