Question

Abel and Family Perfumes wants to add one or more of four new products to its current line of colognes. Historically, Abel has used a 5-year project recovery period and a MARR of 20% per year. (a) Determine which of the four options the company should undertake on the basis of a present worth analysis, provided the total amount of investment capital available is $800,000. Use a hand solution, unless assigned otherwise. (b) What products are selected if the investment limit is increased to $900,000? Use a spreadsheet, unless assigned otherwise. (All cash flows are in $1000 units.) Product Line R1 S2 T3 U4 Investment, $ -200 -400 -500 -700 M&O cost, $/year -50 -200 -300 -400 Revenue, $/year 150 450 520 770

          Abel and Family Perfumes wants to add one or more of four new products to its current line of colognes. Historically, Abel has used a 5-year project recovery period and a MARR of 20% per year. (a) Determine which of the four options the company should undertake on the basis of a present worth analysis, provided the total amount of investment capital available is $800,000. Use a hand solution, unless assigned otherwise. (b) What products are selected if the investment limit is increased to $900,000? Use a spreadsheet, unless assigned otherwise. (All cash flows are in $1000 units.) 

Product Line   R1    S2    T3    U4 
Investment, $  -200  -400  -500  -700 
M&O cost, $/year  -50  -200  -300  -400 
Revenue, $/year   150   450   520   770

Added by Lisa D.

Question

Please give Ace some feedback