Question

Consider the following cash flows and present-worth profile. Year 0 Net Cash Flows ($) Project 1 Project 2 - $960 - $960 400 450 750 х 950 1 2 3 Click the icon to view the NPW plot. - X

(a) Determine the values of X and Y. More Info The value of X is $(Round to the nearest dollar.) The value of Yis $(Round to the nearest dollar.)
(b) Calculate the terminal project balance of project 1 at MARR = 23%. The terminal project balance of project 1 at MARR = 23% is (Round to the nearest dollar.)
(c) Find the values of a, b, and c in the NPW plot. The value of a is $(Round to the nearest dollar.) PWO The value of b is $ (Round to the arest dollar.) 23% The value of cis%. (Round to one decimal place.) 35 45 55 Project 1 Project 2 22% i(%) Print Done Enter your answer in each of the answer boxes.

Answer 1

X = $400, Y = $450, terminal project balance of project 1 at MARR = 23% is -$10, a = $35, b = $45, and c = 55%.

Step-by-step explanation:

To determine the values of X and Y, we can compare the net cash flows for Project 1 and Project 2 in each respective year. By looking at the cash flows, we can see that in year 1, project 1 has a net cash flow of $400, while project 2 has a net cash flow of $450. Therefore, X = $400 and Y = $450.

To calculate the terminal project balance of project 1 at MARR = 23%, we can find the present worth of project 1 at year 3 using the MARR. By finding the present worth of the net cash flows at year 3, we can subtract the initial investment to find the terminal project balance. So, the terminal project balance of project 1 at MARR = 23% is $950 - $960 = -$10.

In the NPW plot, the values of a, b, and c can be determined by examining the values of the plot at different interest rates. For example, at a 23% interest rate, the NPW plot has a value of 35 for project 1, 45 for project 2, and 55 for the break-even point. Therefore, a = $35, b = $45, and c = 55%.