L15_ECE4001_Fall_2008

L15_ECE4001_Fall_2008 - F/P P/F Lecture 15 Engineering...

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Slide #1 ECE 4001 L15 T. Michaels © 2008 Lecture 15 Engineering Economics: Applications and Examples Slide #2 ECE 4001 L15 T. Michaels © 2008 F/P P/F A/F F/A A/P P/A Gradient Factors Slide #3 ECE 4001 L15 T. Michaels © 2008 All Factors Obey Rules of Algebra ( / ) A P A P = 1 ( / ) ( / ) F P P F - = 1 1 P = (P/F ) F 1 1 F = (F/P) (P/F ) F ETC. .. Slide #4 ECE 4001 L15 T. Michaels © 2008 Cash Flow Diagrams
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Slide #5 ECE 4001 L15 T. Michaels © 2008 Arithmetic Gradient Series Payment End of Year $0 1 $1000 2 $2000 3 $3000 4 $4000 5 Compute present value for above payments for an interest rate of 4% (note payment total is $10,000 and G is the payment made at the end of year 2) Slide #6 ECE 4001 L15 T. Michaels © 2008 Present Value of Arithmetic Gradient Series (assume interest rate of 4%, G = $1000, 4 payments with n = 5) ( / , %, ) ( / ,4%,5) 1000 P P G i n G P G = = Slide #7 ECE 4001 L15 T. Michaels © 2008 Present Value of Arithmetic Gradient Series (assume interest rate of 4%, G = $1000, 5 yrs of payments) 5 2 5 ( / , %, ) ( / ,4%,5) 1000 [(1.04) (0.04) 5 1] 1000 8,554.67 (0.04) (1.04) P P G i n G P G P = = - ⋅ - = = Note payment total = $10,000 Slide #8 ECE 4001 L15 T. Michaels © 2008 Arithmetic Gradient Series Plus Annualized Series Payment End of Year $1000 $1000 $0 1 $1500 $1000 $500 2 $2000
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L15_ECE4001_Fall_2008 - F/P P/F Lecture 15 Engineering...

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