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 |

\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.

page revision: 3, last edited: 20 Nov 2009 03:33