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m 


  m             

ENGINEERING ECONOMY Fifth Edition Mc

Blank and Tarquin Graw
Hill

Chapter IV

"%& "  "

'(()*(

² ² ²
   

  !"#\$% " ô
m  
  m             

S  Series Analysis ź PP >= CP

 
     
  
 
  
  
 

² ² ²
  

  !"#\$% " ~
m  
  m             

Example

For the past 7 years, a manager

has paid \$500 every  months for
the software maintenance contract
of a LAN What is the equivalent
amount after the last payment, if
these funds are taken from a pool
that has been returning 20 % per
year, compounded quarterly

² ² ²
  

  !"#\$% " ²
m  
  m             

S  Series Example /- *00



+,²"-

//- 12 3*, 45 &6(()(7

8 " "9 11&%
" " *:"; 1

² ² ²
  

  !"#\$% " S
m  
  m             

S  Series Example

 
!~"#\$ 
%!"~"%S!""<!<#%
~&'& 
'& !(ô"<~ ) ô!ô"~<#%'&
*\$  
+ ! ôS !,<""( % \$ô"~<#\$ôS
!,<""(~-S-.ô!,ôS\$~SS<"

² ² ²
  

  !"#\$% " <
m  
  m             

/  


/ )  

'&0
'&
1 
'&  
ô"~<#& &
  %   
2\$   3
   4
² ² ²
  

  !"#\$% " '
m  
  m             

  

4
15 4
  ) 4
1  
&
3 You have to use your calculator to compute
the factor or a spreadsheet model to achieve
exact result

² ² ²
  

  !"#\$% " +
m  
  m             

ENGINEERING ECONOMY Fifth Edition Mc

Blank and Tarquin Graw
Hill

Chapter IV

-%& " ;

"  "'((<(

² ² ²
   

  !"#\$% " -
m  
  m             

S 7 Single Amounts/Series with PP < CP

1
6\$00    
( 0
78
/   
/   
 
 

² ² ²
  

  !"#\$% " .
m  
  m             

S 7 Interperiod Compounding Issues

& 
0 

/ !ô~#%\$ 
.+,

.>
.

+,²"-=>+ +++,

.- .
.+ .+

.,

² ² ²
  

  !"#\$% " ô"
m  
  m             

S 7 Interperiod Compounding

!ô~#% 
.+,

.>
.
m  m  m ! m "

+,²"-=>+ +++,

.- .
.+ .+

.,

?' "1&"1'"1'
"&&; "@

² ² ²
  

  !"#\$% " ôô
m  
  m             

S 7 Take the first \$200 cash flow

5%
.+,
,~""   
.>
 8 .
m 
., "1
+,²"-=>+ +++,
,' 
.+ .- "1 ;
.+
.

11 "
.,
&; 0

         
          #

² ² ²
  

  !"#\$% " ô~
m  
  m             

S 7 Interperiod Issues

1,~"" ô
   ô
5  
,~""8
/
  
 33

² ² ²
  

  !"#\$% " ô²
m  
  m             

S 7 No interperiod compounding
.+"
7
  
.> .>
.

+,²"-=>+ +++,

.- . .
.+ .+
.+-
., .,

;%6""7/A"%1 
"&%  ""%6' '"7/A"
%;;1  "&%  "

² ² ²
  

  !"#\$% " ôS
m  
  m             

S 7 No interperiod compounding
.+"
7
  
.>

+,²"-=>+ +++,

.+ .

.+-
.,

?'  1 ' 1" %"" "

";/5(1& &&"1'

² ² ²
  

  !"#\$% " ô<
m  
  m             

S 7 Final Results: No interperiod Comp

5
   

2 3*+,45 &  
23* +,5*  ²*²4  

/+, *B + 6/5(²4 79 , 6/5( ²4 ²7C6 +-

C> 76/5( ²4 ,7C+"6/5( ²4 +79  D
*. ²->

² ² ²
  

  !"#\$% " ô'
m  
  m             

The CFs are not moved and eq

P, F, & A values are
determined, using eff Interest
rate per PP
Economic relations are
determined in the same way as
in PP á CP case
² ² ²
  

  !"#\$% " ô+
m  
  m             

m < 1 in this case

eg :
PP weekly & CP Quarterly then
m = 1/13 of a quarter
For r = 12%/year, c q = 3% per quarter, c q
Effective weekly i% = (1 03)1/13 ź 1
= 0 228% per week

² ² ²
  

  !"#\$% " ô-