Problem: University Athletic Wear (UAW) is evaluating several new product proposals. Resources are available for any or all of the products. UAW uses a MARR of 15% and a time span of 5 years for project evaluations. Determine which new product(s) should be chosen using Internal rate of return criteria.
1. Determine which new product(s) should be chosen using the Internal rate of return criteria.
2. Determine which new product(s) should be chosen using the present worth criteria.
| MARR= |
15% |
Investment |
Cash Flows |
| |
Project |
|
1 |
2 |
3 |
4 |
5 |
| |
Shorts |
($450,000) |
$80,000 |
$120,000 |
$150,000 |
$150,000 |
$150,000 |
| |
Shirts |
($200,000) |
$50,000 |
$70,000 |
$80,000 |
$80,000 |
$80,000 |
| |
Jackets |
($500,000) |
$150,000 |
$150,000 |
$150,000 |
$150,000 |
$150,000 |