12-100hw5 - 12-100 Introduction to Civil and Environmental...

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Unformatted text preview: 12-100 Introduction to Civil and Environmental Engineering Homework 5. 1. Spring 2008 Due: 27 February 2008 Using an annual interest rate of 7.5%, find the present value of this stream of five successive annual payments, which start exactly one year from the present: $150, 150, 250, 300, 400. An initial investment of $10,000 grows to $36,500 at the end of 20 years. equivalent annual interest rate. Determine the 2. 3. Consider a project that costs $10,000 at time 0 (the start of year 1) and another $8,000 at the end of year 8, but provides benefits of $2,400 at the end of every year for a total length of 15 years. Using a MARR (minimum attractive rate of return) of 6%, what is the NPV of this project? Do you accept or reject this project? Consider a project that costs $10,000 at the start of year 1, another $6000 at the end of year 2, and another $4000 at the end of year 4. The project will then provide annual benefits, starting at the end of year 5, that will remain constant until the end of year 15. Using a MARR of 9%, how large must that annual benefit be in order to make this an acceptable project? Repeat problem 4 if you learn that at the end of year 15 there is also a salvage value of $7500 that will be recovered from this project. 4. 5. 12-100 Introduction to Civil and Environmental Engineering Homework 5. Grade Sheet Name: _____________________________________________ Total score: _____ Spring 2008 Presentation 10 points _____ P1. Problem interpretation Calculations 18 points total 9 9 _____ _____ P2. Problem interpretation Calculations 18 points total 9 9 _____ _____ P3. Problem interpretation Calculations 18 points total 9 9 _____ _____ P4. Problem interpretation Calculations 18 points total 9 9 _____ _____ P5. Problem interpretation Calculations 18 points total 9 9 _____ _____ ...
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12-100hw5 - 12-100 Introduction to Civil and Environmental...

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