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Chapter 5 Evaluating A Single Project
Chapter 5 Evaluating A Single Project
Chapter 5
Evaluating a Single Project
VN =?
FW = -$45,000(1.7623)+$14,000(6.3528)+$4,000
where
Rk = excess of receipts over expenses
in period k,
Ek = excess of expenses over receipts
in period k,
N = project life or number of periods,
ε = external reinvestment rate per
period.
Expenses
Revenue
Solving, we find
and discounted
payback. 3 $10,000 -$9,000 -$12,493
From the calculations
θ = 4 years and θ' = 5 4 $10,000 $1,000 -$4,572
years.
Pro.: 5.3, 5.11, 5.16, 5.18, 5.19,
5.22, 5.23, 5.34, 5.38, 5.47, 5.51,
5 $9,000 $2,153
5.53 & 5.60
Copyright ©2009 by Pearson Education, Inc.
Engineering Economy, Fourteenth Edition
Upper Saddle River, New Jersey 07458
By William G. Sullivan, Elin M. Wicks, and C. Patrick Koelling
All rights reserved.