Problem
A new equipment will cost 200,000 to install, 5,000 annually maintenance, and have a life of 5 years. The revenue generated by this equipment is estimated to be 60,000 per year. The MARR is 10% per year compounded monthly. Examine the sensitivity of present worth to variation in individual parameters estimates, while others remain constant.
a) Sensitivity to installation cost variation: 150,000 to 250,000
b) Sensitivity to revenue variation: 45,000 to 75,000.
c) Sensitivity to life variation: 4 year to 7 year.