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Assignment 4

# Assignment 4 - TEXAS A&M UNIVERSITY ZACHARY DEPARTMENT OF...

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T EXAS A&M U NIVERSITY Z ACHARY D EPARTMENT OF C IVIL E NGINEERING CVEN 349: C IVIL E NGINEERING P ROJECT M ANAGEMENT , F ALL 2009 1 Assignment 4 TOTAL POINTS: 100 DUE: Beginning of class on October 2nd, 2009 OBJECTIVES Familiarize with net present value and feasibility analysis. DELIVERABLES Submit this assignment in only hard-copy form. RESPONIBLE PARTIES This is an individual assignment. PART I (20 points) For diagram, find Net Present Value (interest rate of 5%). PART II (20 points) 1. The annual income from a rented house is \$12,000. The annual expenses are \$3,000. If the house can be sold for \$145,000 at the end of ten years, how much could you afford to pay for it now, if you considered 14% to be a suitable interest rate? 2. Using an eight-year analysis period and a 10% interest rate, determine which alternative should be selected: A B Initial Cost 5,300 10,700 Uniform Annual Benefits 1,800 2,100 Useful Life (in years) 4 8 3. Given three or more of the variables P , A , F , n , find the rate of return, i, for each proposal.

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Assignment 4 - TEXAS A&M UNIVERSITY ZACHARY DEPARTMENT OF...

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