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topic_4_pv_ae_irr

topic_4_pv_ae_irr - ISE460 Class Discussion[Special Topics...

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ISE460 Class Discussion ISE460 Class Discussion [Special Topics]: Project Evaluation PV & AE & IRR TA: Paul TA: Paul 2007 Fall
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Present Worth (Ch5) Annual worth (Ch6) Rate of Return (Ch7) Outline of the text Financial Statement, Ratio (Ch 2), Cost (Ch 8) Earning power of money Interest (Ch 3, 4) Investment Evaluation (accept/reject? Choose which) Replacement (Ch14) Income/Cash Flow Statement (Ch 10) Inflation (Ch 11) Depreciation (Ch 9) Taxes (Ch 9) Five Cash Flow Series (Ch 3) TA: Paul 2007 Fall Time Value Of Money
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To evaluate a project with all cash flows, we can calculate: 1. PV of all cash flows (NPW) NPW>0 then accept it 2. PMT of all cash flows (AE) AE>0 accept 3. Interest (IRR) IRR>MARR accept (?) PV and PMT can apply to all cases PMT method is required, or more convenient by some problems IRR method has more limits and is more complicated, sometimes cannot work Present Worth (Ch5) Annual worth (Ch6) Rate of Return (Ch7) Investment Evaluation (accept/reject?
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