Exclusive Choice Pop Quiz

Given the following assets, which asset would you choose if the MARR is 12%

Asset A Asset B Asset C Asset D
Year 0 -10 -15 -5 -100
Year 1 15 0 10 0
Year 2 0 20 0 111
(1)
\begin{align} PW(A) = -10 + {15 \over 1.12} \end{align}

PW(A) = $3.39

(2)
\begin{align} PW(B) = -15 + {20 \over 1.12^2} \end{align}

PW(B) = $0.94

(3)
\begin{align} PW(C) = -5 + {10 \over 1.12} \end{align}

PW(C) = $3.93

(4)
\begin{align} PW(D) = -100 + {111 \over 1.12^2} \end{align}

PW(D)=$-11.51

The correct answer is Asset C since C has the largest present worth.

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