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CHAPTER 4
The Time Value of Money
Engineering is :
The profession in which a knowledge of mathematical and
natural science is applied to develop ways to utilize
Economically , the materials and the forces of the nature
for the benefits of
Solutions to Chapter 9 Problems
9-1
Defender (old lift truck):
Using the outsider viewpoint, the investment value of the old lift truck is its current market value.
Defender: PW(20%) = $7,000 $8,000(P/A, 20%, 5) = $30,925
Challenger: PW(20%) = $22,000 $5,
Solutions to Chapter 8 Problems
A Note To Instructors: Because of volatile energy prices in today's world, the instructor is encouraged to vary energy
prices in affected problems (e.g. the price of a gallon of gasoline) plus and minus 50 percent and ask s
Solutions to Chapter 5 Problems
5-1
No. A higher MARR reduces the present worth of future cash inflows created by savings (reductions) in
annual operating costs. The initial investment (at time 0) is unaffected, so higher MARRs reduce the
price that a com
Evaluating a Single project
Suggested Problems
4, 10, 16, 21, 25, 36, 46, 49, 55, 60
Introduction
In this chapter we will answer the following
question :
Whether a proposed capital and its expenditures
can recovered by revenue over time in addition
to a
a
!
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Y
"p (Co) . J1fCJIP"n. ~
Is die 'riP .cnglb 'n m,lIlIIId II
.2 m,le!Iihour, ,he cost of _rt8lialtl
_,mIL" lite ,0.' or ope,lIion, b.1I It
_",.nn( ~ . '"eI,. known'0 be S',500
tfIip be dm"'CII '0 mln,m . , lite Ir,p COllI?
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III
Jordan university of science and technology
Department of industrial engineering
Eng. Economy ( IE 341 )
Second exam
6 12 2012
# problem 1 ( 3 points ) :
state whether the statement is true or false :
1 . Two investor are considering the same project . th
Comparison and Selection
among Alternatives
Created By Eng.Maysa Gharaybeh
Quiz
1, 2, 7, 15,19, 20, 22, 26, 36, 40.
The objective of chapter 6 is
to evaluate correctly capital
investment alternatives when
the time value of money is a
key influence.
Makin
CHAPTER 7
Depreciation And Income Taxes
Created By : Eng.Maysa
Gharaybeh
Depreciation
Decrease in value of physical properties with passage of
time and use.
More specifically:
Accounting concept establishing annual deduction against
before-tax income to
CHAPTER 4
Part 2
The Time Value of
Money
Relating a Uniform Series
(Ordinary Annuity) To Present
and Future Equivalent Values
1. Finding F given A:
Finding future equivalent income (inflow) value given a
series of uniform equal Payments
F=
(1i ) N 1
A
Chapter 2
Cost Concepts And Design
Economic
Created By : Eng. Saad Hamasha
& Eng.Maysaa Gharaybeh
Fixed, Variable and Incremental
costs.
Fixed costs :
Unaffected by changes in activity level over a
feasible range of operations for the capacity or
capabil
CHAPTER 4
Part 3
The Time Value of
Money
Quiz:
Chapter4 (part2 + part3)
55, 60, 62, 68, 72, 95, 99, 100, 103, 112,
113, 115, 116.
Interest Rates That Vary With Time
Find the present equivalent value given a future
value and a varying interest rate over