Ivan, an industrial engineering student, is working on a homework problem for engineering economy. he needs to calculate the pw at 12 % of a cash flow series with $1,000 at t = 3, $1,500 at t = 4, and $2,000 at t = 5.

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Business

Adrien Dudley

26 September, 02:40

Ivan, an industrial engineering student, is working on a homework problem for engineering economy. he needs to calculate the pw at 12 % of a cash flow series with $1,000 at t = 3, $1,500 at t = 4, and $2,000 at t = 5.

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Emilio Gallegos · Answer 1

This problem is solved as follows: PV = CF1/1.12 + CF2/1.12^2 + CF3/1.12^3 etc ... CFx/1.12^x substituting in the values from the problem = PV = 0 + 0 + 0 + $711.78 + $953.28 + $1,134.85 = $2,799.91 CF at t0 = $0 CF at t1 = $0 CF at t2 = $0 CF at t3 = $1,000 / 1.12^3 = $711.78 CF at t4 = $1,500 / 1.12^4 = $953.28 CF at t5 = $2,000 / 1.12^5 = $1,134.85