Draw and solve the Cash Flow Diagram for Future Value \"F_11\". This is a 10 yea

Question

Draw and solve the Cash Flow Diagram for Future Value "F_11". This is a 10 year Cash Flow, and interest rate is a compounded 9%, but I want the Future Value at Year 11. $5000.00 is Invested Today for a piece of testing equipment $2000.00 is Earned as Annual Income from end of years 4-10 through use of this test equipment $400.00 is the Annual Maintenance Cost of the testing equipment for all 10 years Salvage Value at the end of the 10th year is $1500.00 There is an Arithmetic Gradient Income from years 6-10 with a Base Annuity of $500.00 and an Annual Gradient G of +$50.00 There is a mortgage cost from years 1-10 with a starting amount of $1000, decreasing by $25 each year (years 2-10). What is the Future Value "F_11" of this Engineering Cash Flow Investment? Draw the CFD

Explanation / Answer

calculation of future value at the 11th year : year cash flow Annual Gradient AMC Cost Mortage cost Net cash inflow/outflow Discount factor@9% future value of the project 0 -5000 0 0 0 -5000 1.0000 -5000.00 1 0 0 -400 -1000 -1400 0.9174 -1284.36 2 0 0 -400 -975 -1375 0.8416 -1157.20 3 0 0 -400 -950 -1350 0.7722 -1042.47 4 2000 0 -400 -925 675 0.7084 478.17 5 2000 0 -400 -900 700 0.6499 454.93 6 2000 500 -400 -875 1225 0.5963 730.47 7 2000 550 -400 -850 1300 0.5470 711.10 8 2000 600 -400 -825 1375 0.5018 689.98 9 2000 650 -400 -800 1450 0.4604 667.58 10 2000 700 -400 -775 1525 0.4224 644.16 10 salvage value 1500 0.4224 633.60 Future value of cash flow investment is nagative and hence not vioble -3474.05

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