The product development group of a high-tech electronics company developed five proposals for new products. The company wants to expand its product offerings, so it will undertake all projects that are economically attractive at the company’s MARR of 20% per year. The cash flows (in $1000 units) associated with each project are estimated. Which projects, if any, should the company accept on the basis of a present worth analysis?
 FIGURE 1.png)
PWA = -400 + (360 – 100)(P/A,20%,3)
= -400 + 260(2.1065)
= $147.69 ($147,690) Accept
PWB = -510 + (235 – 140)(P/A,20%,10) + 22(P/F,20%,10)
= -510 + 95(4.1925) + 22(0.1615)
= $-108.160 ($-108,060) Reject
PWC = -660 + (400 – 280)(P/A,20%,5)
= -660 + 120(2.9906)
= $-301.128 ($-301,128) Reject
PWD = -820 + (605 – 315)(P/A,20%,8) + 80(P/F,20%,8)
= -820 + 290(3.8372) + 80(0.2326)
= $311.396 ($311,396) Accept
PWE = -900 + (790 – 450)(P/A,20%,4) + 95(P/F,20%,4)
= -900 + 340(2.5887) + 95(0.4823)
= $25.977 ($25,977) Accept
Projects A, D and E are acceptable with PW > 0 at 20%
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