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Ch3-Lecture_Notes - Combining Factors Learning Objectives 2...

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Combining Factors 05/07/09
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Learning Objectives 2
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Uniform Series that are SHIFTED A shifted series where present worth (PW) point in time is NOT t = 0. Shifted either to the left of “0” or to the right of t = “0”. Dealing with a uniform series: The PW point is always one period to the left of the first series value 3
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Shifted Series 4 0 1 2 3 4 5 6 7 8 A = -$500/year Consider: P of this series is at t = 2 (P 2 or F 2 ) P 2 = $ 500 (P/A,i%,4 ) or could refer to as F 2 P 0 = P 2 (P/F,i%,2 ) or F 2 (P/F,i%,2) P 2 P 0
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Series with other single cash flows It is common to find cash flows that are combinations of series and other single cash flows. Solve for the series present worth values then move to t = 0. Solve for the PW at t = 0 for the single cash flows. Add the equivalent PW’s at t = 0. 5
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Series with other cash flows Consider: 6 0 1 2 3 4 5 6 7 8 A = $500 F 5 = $400 F 4 = $300 Find the PW at t = 0 cash flow. i = 10% P =$1583.56 *
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The Linear Gradient - revisited The Present Worth of an arithmetic gradient
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