3. Sam works for Engineering Enterprises, and he is trying to analyze his cash flow throughout the following time period: Cash flows in year 1 -4 have been at a steady $1M/year. However due to the COVID pandemic in year 5 the company had to completely shut down its operations for a year. In year 6 the company was able to maintain the revenue of $1M, however there was a 15% decline in sales in the following periods. a) Draw the cash flow diagram b) Based on PW analysis and an interest rate of 5%, overall, how did the company perform during the 8-year study period? c) Convert your answer to AW based on your answer from part b)

3. Sam works for Engineering Enterprises, and he is trying to analyze his cash flow throughout the following time period: Cash flows in year 1 -4 have been at a steady $1M/year. However due to the COVID pandemic in year 5 the company had to completely shut down its operations for a year. In year 6 the company was able to maintain the revenue of $1M, however there was a 15% decline in sales in the following periods. a) Draw the cash flow diagram b) Based on PW analysis and an interest rate of 5%, overall, how did the company perform during the 8-year study period? c) Convert your answer to AW based on your answer from part b)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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