The initial construction cost of a project is $200000 which should be paid at the beginning of the construction period (time =0). Extra expenditures planning to be paid during operation period, which are ($5000) at the end of the first year, $3000 at the end of the second year, $1000 at the end of the third year, $1000 at the end of the fifth year and $ 1000 at the end of the sixth year. If the project life is 10 years and the interest rate is %10, draw the cash flow diagram and find a) the present worth of the project, b) the future worth at the end of the project life, c) the annual payment worth.
The initial construction cost of a project is $200000 which should be paid at the beginning of the construction period (time =0). Extra expenditures planning to be paid during operation period, which are ($5000) at the end of the first year, $3000 at the end of the second year, $1000 at the end of the third year, $1000 at the end of the fifth year and $ 1000 at the end of the sixth year. If the project life is 10 years and the interest rate is %10, draw the cash flow diagram and find a) the present worth of the project, b) the future worth at the end of the project life, c) the annual payment worth.
Engineering Fundamentals: An Introduction to Engineering (MindTap Course List)
5th Edition
ISBN:9781305084766
Author:Saeed Moaveni
Publisher:Saeed Moaveni
Chapter20: Engineering Economics
Section: Chapter Questions
Problem 19P
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The initial construction cost of a project is $200000 which should be paid at the beginning of the construction period (time =0). Extra expenditures planning to be paid during operation period, which are ($5000) at the end of the first year, $3000 at the end of the second year, $1000 at the end of the third year, $1000 at the end of the fifth year and $ 1000 at the end of the sixth year. If the project life is 10 years and the interest rate is %10, draw the cash flow diagram and find a) the present worth of the project, b) the future worth at the end of the project life, c) the annual payment worth.
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