Chapter_6_Annual_Cash_Flow

# Chapter_6_Annual_Cas - Chapter 6 Annual Cash Flow Analysis Copyright Oxford University Press 2009 Chapter Outline Annual Cash Flow Calculations

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Copyright Oxford University Press 2009 Chapter 6 Annual Cash Flow Analysis

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Copyright Oxford University Press 2009 Annual Cash Flow Calculations Annual Cash Flow Analysis Applying Annual Cash Flow Techniques Useful Lives Equal the Analysis Period Useful Lives Different from the Analysis Period Infinite Analysis Period Applying Annual Cash Flow Techniques using Spreadsheets Chapter Outline
Copyright Oxford University Press 2009 Apply annual cash flow techniques in various situations in selecting the best alternative Develop and use spreadsheet in solving engineering economic problems Learning Objectives

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Copyright Oxford University Press 2009 It is a common tactic for manufacturers to sell inkjet or laser printers at very low prices. Then take advantage at the time when the ink or toner cartridges need to be replaced. Vignette: Lowest Prices on the Net! Buy Now! Why are there so many spam or junk e-mail selling ink or toner cartridges?
Copyright Oxford University Press 2009 King Camp Gillette, inventor of the safety razor, gave his razor away free of charge. But his business revenue soared. Why? Vignette: Lowest Prices on the Net! Buy Now! Can Gillette’s strategy work with other products? Why or Why not? What ethical issues do producers and marketers face in designing and selling their products? Is it true that “anything goes in business” and “caveat emptor?”

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Copyright Oxford University Press 2009 Example 6-1 Annual Cash Flow Calculations \$142.40 %,10) 1000(A/P,7 EUAC = = 4 0 1 2 3 5 A A A A A 8 6 7 9 A A A A 10 A 0 P=1000 A student bought \$1000 worth of furniture. What is the equivalent annual cost if it is expected to last 10 years and the interest rate is 7%?
Example 6-2 Annual Cash Flow Calculations \$127.92 1000(7%) %,10) 200)(A/F,7 - (1000 EUAC \$127.92 200(7%) %,10) 200)(A/P,7 - (1000 EUAC \$127.92 ,10) 200(A/F,7% - %,10) 1000(A/P,7 EUAC = + = = + = = = A student bought \$1000 worth of furniture. What is the equivalent annual cost if it is expected to last 10 years and can be sold for \$200? 4

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## This note was uploaded on 10/19/2011 for the course ENGINEERIN 110 taught by Professor King during the Spring '11 term at UCLA.

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Chapter_6_Annual_Cas - Chapter 6 Annual Cash Flow Analysis Copyright Oxford University Press 2009 Chapter Outline Annual Cash Flow Calculations

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