You're right, another math mistake on my part, sorry about that. At least the answer is still alternative 1. I'll need to double-check calculations next time.
Womderful example. However, I think the term "saving" is misleading especially when you are using it to substract from the cost to get the revenue. Revenue itself refers to savings. Some questions refer to it as annual "sales". This is something I just wanted to clarify. Thanks!
Hello Majeed! Just trying to go a little fast on this one. I did, but did not write down the steps since we already did it for alternative 1. The video should have stated that.
I did generate it myself! I'm more careful nowadays before putting out videos. Learned the hard way to double or even triple check my work! Sorry if this caused any great confusions
If PW @Alt 1 = -$20,754.30 & PW @Alt 2 = -$23,644.70; wouldn't the Savings be $2890.4. This Savings does result in a listed choice? Which Answer is it?
Hi Terry, sorry I had a math error in this video. Which I will redo (I have a lot of video with errors). As stated by the comment from others, the savings would be what you got - $2890.4. The alternative we chose would still be alt 1 since it is the lower present worth value we have to put down at present when compared to alt 2. PW @Alt 1 = -$20,754.30 < PW @Alt 2 = -$23,644.70 - Choose alternative 1 with a cost saving of $2890.4
Please excuse my arithmetic mistake. The correct written solution is shown below:
www.directhub.net/wp-content/uploads/2024/09/image-2.png
The PW for Alt 1 is -20754.3. Therefore, save at present is $2890.4
That's right! Sorry I had an arithmetic mistake.
I am not sure how i am getting a value of - 20, 754.3 for alternative one. can you double check please.
You're right, another math mistake on my part, sorry about that. At least the answer is still alternative 1. I'll need to double-check calculations next time.
Womderful example. However, I think the term "saving" is misleading especially when you are using it to substract from the cost to get the revenue. Revenue itself refers to savings. Some questions refer to it as annual "sales". This is something I just wanted to clarify. Thanks!
Hi Farouq/ why you didn't multiply Alt 2 items by 5% probability same way you did for Alt 1, thanks.
Hello Majeed!
Just trying to go a little fast on this one. I did, but did not write down the steps since we already did it for alternative 1. The video should have stated that.
Agreed on Alt 1 = 20753.1
These helped me remember the concepts. The math errors make little difference. Thanks. Did you generate the problem and answers yourself?
I did generate it myself! I'm more careful nowadays before putting out videos. Learned the hard way to double or even triple check my work!
Sorry if this caused any great confusions
If PW @Alt 1 = -$20,754.30 & PW @Alt 2 = -$23,644.70; wouldn't the Savings be $2890.4. This Savings does result in a listed choice? Which Answer is it?
Hi Terry, sorry I had a math error in this video. Which I will redo (I have a lot of video with errors).
As stated by the comment from others, the savings would be what you got - $2890.4. The alternative we chose would still be alt 1 since it is the lower present worth value we have to put down at present when compared to alt 2.
PW @Alt 1 = -$20,754.30 < PW @Alt 2 = -$23,644.70 - Choose alternative 1 with a cost saving of $2890.4