higher-voltage transmission line

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higher-voltage transmission line

A new engineer is evaluations whether to use a higher-voltage transmission line. It cost $250,000 more initially, but it will reduce transmission losses . The Optimistic, Most Likely, and Pessimistic projections for annual savings are $20,000, $15,000 , and $8,000/ The interest rate is 6%, and the transmission life line should have a life of 30 years.

Assume that the optimistic probilaity is 20%, the most lickly is 50% and the pessimistic is 30%.

a) What is the expected value of the Present worth?
b) Complote the expected value of for the annual savings, and the corresponding present worth.
c) Do the answers a) and b) match? Why or Why not?

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