Determine values for present worth (PW or NPV), future worth (FW), annual worth (AW), payback (PB), AND discounted payback (DPBP) for the following cash flow system.   Consider two interest rate scenarios in your evaluations: 4% per year, compounded annually 12% per year, compounded annually.     End of Year 0 1 2 3 4 5 6 7 Cash Flow -$40,000 $8,200 $8,200 $8,200 $8,200 $8,200 $8,200 $8,200

ENGR.ECONOMIC ANALYSIS
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ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Question
  1. Determine values for present worth (PW or NPV), future worth (FW), annual worth (AW), payback (PB), AND discounted payback (DPBP) for the following cash flow system.

 

Consider two interest rate scenarios in your evaluations:

  1. 4% per year, compounded annually
  2. 12% per year, compounded annually.

 

 

End of Year

0

1

2

3

4

5

6

7

Cash Flow

-$40,000

$8,200

$8,200

$8,200

$8,200

$8,200

$8,200

$8,200

 

 

 

 

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