Draw and solve the cash flow diagram for future value

Reference no: EM13251612

1. Draw and solve the Cash Flow Diagram for Future Value “F”. This is a 10 year Cash Flow, and interest rate is a compounded 7%).

a. $10000.00 is Invested Today for a piece of testing equipment

b. $6000.00 is Earned as Annual Income from end of years 4-10 through use of this test equipment

c. $600.00 is the Annual Maintenance Cost of the testing equipment for all 10 years

d. Salvage Value at the end of the 10th year is $1800.00

e. There is an Arithmetic Gradient Income from years 6-10 with a Base Annuity of $400.00 and an Annual Gradient G of +$50.00

What is the Future Value “F” of this Engineering Cash Flow Investment?

I kind of know how to draw throw cash flow diagram for this, but my real issue is how do I start to calculate the future value with a gradient involved? Do I find the future values of each instance and then add them together? If so, then how do I get the future value of the gradient and annuity?

Reference no: EM13251612

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