Solve the cash flow diagram for annual value

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Reference no: EM13999833

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

a. $10,000.00 is Invested Today for a piece of testing equipment

b. $2000.00 is Earned as Annual Income from end of years 1-10 through use of this test equipment

c. $400.00 is the Annual Maintenance Cost of the testing equipment for years 2-10 (the first year is under warranty)

d. Salvage Value (amount you can sell the equipment at scrap value) at the end of the 10th year is $1500.00

e. There is an Arithmetic Gradient Income from years 1-10 with a Base Annuity of $500.00 and an Annual Gradient G of +$50.00

f. There is a one time payment (cost) for software upgrades in year 8 of $2500

g. There is a one time rebate (income) from the testing manufacturer in year 1 of $750

What is the Annual Value “A” of this Engineering Cash Flow Investment from Years 1-10?

Reference no: EM13999833

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