Beruflich Dokumente
Kultur Dokumente
Foundations Of
Engineering
Economy
Engineering Economy
7th edition
Leland Blank
Anthony Tarquin
1. Role in decision
7. Economic
making
equivalence
2. Study approach
8. Simple and
3. Ethics and compound
economics interest
4. Interest rate 9. Minimum attractive
rate of return
5. Terms and symbols
10. Spreadsheet
6. Cash flows functions
Time
0 1 2 n-1 n
One time
period
F = $100
Show the cash flows (to approximate scale)
0 1 2 n-1 n
Cash flows are shown as directed arrows: + (up) for inflow
P = $-80
- (down) for outflow
2012 by McGraw-Hill, New York, N.Y All Rights Reserved
1-16
Cash Flow Diagram Example
Plot observed cash flows over last 8 years and estimated sale next
year for $150. Show present worth (P) arrow at present time, t = 0
Year
0 1
Rate of return = 10% per year
$100 now