An energy efficiency project has a first cost of $400,000, a life of 10 years, and no salvage value. Assume that the interest rate is 10%, The most likely value for annual savings is $50,000. The optimistic value for annual savings is $80,000 with a probability of 0.2. The pessimistic value is $40,000 with a probability of 0.25. PW for Optimistic ($80,000)= $91,600
PW for Most Likely ($50,000)=$92,750
PW for Pessimistic ($40,000) =$154,200
PW values (above) come from the calculation:
PW-(Annual Savings)(P/A, 1096, 10)-$400,000
a) What is the expected annual savings and the expected PW?
b) Compute the PW for the pessimistic, most likely, and optimistic estimates of the annual savings. What is the expected PW?
c) Do the answers for the expected PW match? Why or why not?

8. agreement and disagreement among economists suppose that bob, an economist from a university in arizona, and cho, an economist from a public television program, are arguing over saving incentives. the following dialogue shows an excerpt from their debate: cho: i think it's safe to say that, in general, the savings rate of households in today's economy is much lower than it really needs to be to sustain an improvement in living standards. bob: i think a switch from the income tax to a consumption tax would bring growth in living standards. cho: you really think households would change their saving behavior enough in response to this to make a difference? because i don't. the disagreement between these economists is most likely due to . despite their differences, with which proposition are two economists chosen at random most likely to agree? rent ceilings reduce the quantity and quality of available housing. immigrants receive more in government benefits than they contribute in taxes. having a single income tax rate would improve economic performance.

Hi inr 2002 class! i just uploaded a detailed study guide for this class. you can check-out a free preview by following the link below feel free to reach-out to me if you need a study buddy or have any questions. goodluck!

Abank provides its customers mobile applications that significantly simplify traditional banking activities. for example, a customer can use a smartphone to take a picture of a check and electronically deposit into an account. this unique service demonstrates the bank’s desire to practice which one of porter’s strategies?