quiz 2/11/2010
Asset A B C D
Lifetime 3 6 2 2
PW(10%) -4 -3 4 3
AW 10% -2 -1/2 3 1/2 2 1/2
IRR 12% 6% 11% 12%

wHICH ASSET IS a LOAN?
answer A
if MARR =10 % which asset would you choose ?
answer C AND D (obvious those are positive)
if you are required to provide 4 years of service which asset would you choose ?
Answer C which is the only one provide me with highest worth
If MARR was 11 1/2 and which asset would you choose ?

Answer D

if MARR .. 20% which asset would you choose ?
Answer A
some rules

if loan buy if MARR ≥ IRR
IF INVESTMENT BUY IF IRR≥ MARR

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