4) The net cash flow associated with development and sale of a new product is shown. Determine the present worth at an interest rate of 12% per year. The cash flow is in $1000 units. Year 2. 3. 4 6. 8 Cash Flow, $-120-100 -40 +50 +50 +80 +80 +80 +80 Po Poo Poi20 P50 Ps00 -120 -100 40 Pot00 80 Po4o 50 e 1 2 3 +s 67 8 9 (a) Draw the cash flow (b) P5(80): 80(P/A, 4y, i) (c) P3(50): 50(P/A, 2y, i) (d) PO(80): (b)*(P/F, 5y, ) (e) PO(50): C(p/F, 3y. i)

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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4) The net cash flow associated with development and sale of a new product is shown.
Determine the present worth at an interest rate of 12% per year. The cash flow is in
$1000 units.
Year
2.
3
4
6.
8
9.
Cash
Flow, $-120 -100 -40 +50 +50 +80 +80 +80 +80
Poo
Poo
Poiz0
P50
Ps00
-120 -100
40
Po100
80
Po40
50
6.
(a) Draw the cash flow
(b) P5(80): 80(P/A, 4y, i)
(c) P3(50): 50(P/A, 2y, i)
(d) PO(80): (b)*(P/F, 5y, i)
(e) PO(50): C(p/F, 3y. i)
Transcribed Image Text:4) The net cash flow associated with development and sale of a new product is shown. Determine the present worth at an interest rate of 12% per year. The cash flow is in $1000 units. Year 2. 3 4 6. 8 9. Cash Flow, $-120 -100 -40 +50 +50 +80 +80 +80 +80 Poo Poo Poiz0 P50 Ps00 -120 -100 40 Po100 80 Po40 50 6. (a) Draw the cash flow (b) P5(80): 80(P/A, 4y, i) (c) P3(50): 50(P/A, 2y, i) (d) PO(80): (b)*(P/F, 5y, i) (e) PO(50): C(p/F, 3y. i)
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