Present Worth, Net Present Value, and Net Benefit Value
Present worth moves all project cash flows to time zero. NPV is benefits minus costs on a present-worth basis.
Present worth moves all project cash flows to time zero. NPV is benefits minus costs on a present-worth basis.
A machine costs P60,000, operating cost P2,675.40 per year, revenue P15,000 per year, life 7 years, and interest 8%. Find NPV.
Final answer: P4,166.43.
A public works project has present-worth benefits of $75 M, costs of $55 M, and disbenefits of $15 M. Determine BCR treatments and NBV.
Final answer: project is economically acceptable.
A facility may use quick-fix A or quality-fix B. At 10%, compare net present savings. Quick fix costs $7,000 with decreasing savings; quality fix costs $12,000 with $4,300 annual savings for 4 years.
Quick-fix net present savings is $1,301.26. Quality-fix net present savings is $1,630.46.
Final answer: choose quality-fix B by the larger net present savings.