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This is an engineering economy class. The question is use present worth to calculate rate of...

This is an engineering economy class. The question is use present worth to calculate rate of return. I really need quick help.


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Answer #1

Ans ) According to present worth method,

Pwc = Pw1

   Where, Pwc = present worth of cash outflow

Pw1 = Present value of cash inflow

To find rate of return , equating present worth to zero ,

So , Pwc - Pw1 = 0

Present value of cash inflow = 0

Cti)n u Citih uting vb L 14(iti)n 1-9-63 %

In above euation, Fc1 , Fc2 ,......... Fcn are present worth at time 'n'

and , n = time

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