06. For the cash flow diagram below it -10% answer the following questions: ÏÏÏ R? 3 increase 50$ a. Find the present worth (PW) at year 0 for the base amount (200$ across all years). b. Find the present worth (PW) at year 0 for the gradient amount. Find the total present worth (PW) at year 0 for both base amount and gradient amount. d.) If the cash flow in the table is converted into 2 equal payments, one in year 4 and the other in year 6, what should be the value of each payment?
06. For the cash flow diagram below it -10% answer the following questions: ÏÏÏ R? 3 increase 50$ a. Find the present worth (PW) at year 0 for the base amount (200$ across all years). b. Find the present worth (PW) at year 0 for the gradient amount. Find the total present worth (PW) at year 0 for both base amount and gradient amount. d.) If the cash flow in the table is converted into 2 equal payments, one in year 4 and the other in year 6, what should be the value of each payment?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:06. For the cash flow diagram below it -10% answer the following questions:
ÏÏ
a. Find the present worth (PW) at year 0 for the base amount (2005 across all years).
b. Find the present worth (PW) at year 0 for the gradient amount.
C. Find the total present worth (PW) at year 0 for both base amount and gradient amount.
d. If the cash flow in the table is converted into 2 equal payments, one in year 4 and the other
in year 6, what should be the value of each payment?
200
B?
increase 50$
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VIEWStep 2: Determine the PW for base amount:
VIEWStep 3: Determine the present worth of gradient amount across all year:
VIEWStep 4: Determine the total present worth at year 0:
VIEWStep 5: Determine the two equal payment at year 4 and year 6 that is eq to given cash flow series:
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