Before & After
A 1940's way to say carrying a gun becomes a piece of equipment for warming fluids up
What is Packing Heat Exchanger
This tool is used to visually model the positive benefits and negative costs of engineering projects or potential investment opportunities over time.
What is a cash flow diagram?
This equals the Present Worth of Benefits minus the Present Worth of Costs.
What is Net Present Value (NPV)?
This depreciation method allows the same amount every year
What is Straight Line Depreciation?
You deposit $500 in a credit union at the end of each year for 5 years. The credit union pays 5% interest, compounded annually. Immediately after the fifth deposit, how much can you withdraw from your account?
You would use this EXCEL function to solve.
What is FV?
=FV(rate, nper, PMT, PV, type)
A gypsum dust mixture used with drywall to accumulate earnings based on both principal and previous earnings.
What is Joint Compound Interest?
The value of an investment at the initial time
What is the Principal (or Present Value)?
This type of depreciation is best
What is modified accelerated cost recovery (MACRS)
An energy-efficient machine costs $5000 and has a life of 5 years. If the interest rate is 8%, how much must be saved every year to recover the cost of the capital invested in it?
You would use this Excel function to solve.
What is PMT? (Chapter 4, pg 117)
=PMT(rate,nper,PV,FV,type)
Ring of Fire singer and a quantity calculated from profit plus depreciation
What is Johnny Cash Flow?
A cash flow that is predictable every month
What is an annuity?
In present worth analysis situations where there are multiple alternatives, for the "Do Nothing" alternative, the NPV usually equals this.
What is zero? NPV= 0
A firm borrows $300,000 to be repaid with 5 annual payments of $45,000 and a final balloon payment of $170,000. What interest rate is the firm paying on this loan?
You would use this Excel function to solve.
What is RATE?
What you can sell your capital asset for at the end of a project with a McDonalds's Big Mac, fries and a coke.
What is the Salvage Value Meal?
When cash flows increase or decrease each period by a constant amount
What is uniform gradient(G)?
This equals Gross Income minus all expenditures (except capital expenditures) minus depreciation and depletion charges.
What is Taxable Income?
(Chapter 12, pg 437)
Consider the following Cash Flows:
Year 0: -$4,000
Year 1: $0
Year 2: $2000
Year 3: $1500
Year 4: $1000
Year 5: $500
You would use this Excel function to solve for the discounted rate of return
What is IRR?
A decrease in purchasing power over time leading to a percent of profit on an investment.
What is the Inflation Rate of Return?
The uniform series sinking fund converts ___ to ___?
What is Future value (F) to Annuity (A)?
This is the interest rate at which the benefits are equivalent to the costs, or the present worth is 0.
What is the internal rate of return (IRR)?
or Discounted cash flow rate of return (DCFROR)