What Is the PI of a Project That Requires an Initial

question 75

Multiple Choice

What is the PI of a project that requires an initial investment of $36,000 and pays $10,000 in year 1,$18,000 in year 2,$15,000 in year 3,and $12,000 in year 4? Assume the discount rate is 9 percent and the tax rate is zero.

• A) 1.05
• B) 1.16
• C) 1.23
• D) 1.38

Know how to calculate system reliability based on component reliability and system configuration.

Appreciate the importance of recording maintenance history for effective preventive maintenance.

Understand the role of Total Productive Maintenance (TPM) in maintaining system capability and applying Total Quality Management (TQM) principles in maintenance.

Understand the components and dynamics of interest rate risk for bonds.

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Definitions:

Accounts

Financial records that track all transactions related to a specific item, such as revenues, expenses, assets, liabilities, or equity.

Normal Balance

The side (debit or credit) of an account that is usual or expected to increase the balance of that account.

Liability

Financial obligations or debts that a company owes to others, which must be settled through the transfer of assets or provision of services.

Asset

An economic resource that can be owned or controlled to produce value and that is held by a company to produce positive economic value.