Question: You have three investment options:
|
Option 1 |
Option 2 |
Option 3 |
| Initial Cost |
400 |
1300 |
825 |
| Uniform Annual Benefit |
120 |
200 |
190 |
| Useful Life in Years |
6 |
12 |
8 |
You also have the option of not picking any of them.
a) Calculate the IRR for each.
b) Make a graph depicting the EUAW (Equivalent Uniform Annual Worth) for each option over the [0%,100%] domain.
c) Make a choice table to cover the range from 0% to 100% annual interest rate.
d) If the discount rate (MARR) your company is using is 8%, how confident would you be about your decision on choosing a certain option? How about for a discount rate of 12.5%?