Engineering Economy 7th Edition by Leland Blank ,Anthony Tarquin

Exercise 56

Decision D4, which has three possible alternatives- x, y, or z -must be made in year 3 of a 6-year study period in order to maximize the expected value of present worth. Using a rate of return of 15% per year, the investment required in year 3 and the estimated cash flows for years 4 through 6, determine which decision should be made in year 3.