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.Vision Technologies, Inc. is a small company that uses ultra-wideband technology to develop devices that can detect objects (including people) inside buildings, behind walls, or below ground. The company expects to spend $100,000 per year for labor and S125,000 per year for supplies before a product can be marketed. If the company wants to know the total equivalent future amount of the company's expenses at the end of 3 years at 15% per year interest, identify the engineering economy symbols involved and the values for the ones that are given, and construct a cash flow diagram. Sensotech, Inc., a maker of microelectromechanical systems, believes it can reduce product recalls by 10% if it purchases new software for detecting faulty parts. The cost of the new software is $225,000. Identify the symbols involved and the values for the symbols that are given in determining how much the company would have to save each year to recover its investment in 4 years at a minimum attractive rate of return of 1 500 per year. Please identify the engineering economy symbols involved and construct a cash flow diagram. . .Identify all engineering economy symbols involved and construct a cash flow diagram for the following: S10,000 inflow at time zero, S3000 per year outflow in years 1 through 3 at an interest rate of 10% per year, and an unknown future amount in year 3, Calculate the equivalent future amount of cash at end of year 3. F-$3,380

Answer 1

	Engineering Economy symbols involved
	A   = series of equal, end-of-period amounts
	n   = number of interest periods in years
	i    = interest rate per time period in year
	F   =    amount of money at future time.
	CASH FLOW:
	YEAR	Labor cost	Supplies	Total cash flow
	1	$100,000	$125,000	$225,000
	2	$100,000	$125,000	$225,000
	3	$100,000	$125,000	$225,000
	A=$225,000
	Compount Amount Factor(F/A,i,n)=CAF
	i=15%=0.15
	n=3
	CAF=F/A,15%,3=(((1+i)^n)-1)/i
	CAF=((1.15^3)-1)/0.15=	3.4725
	TOTAL EQUIVALENT FUTURE AMOUNT=A*CAF
	TOTAL EQUIVALENT FUTURE AMOUNT	$781,312.50	(225000*3.4725)
	Engineering Economy symbols involved
	A   = series of equal, end-of-period amounts
	n   = number of interest periods in years
	i    = interest rate per time period in year
	P   = Amount of money at a time at the present
	P=$225000
	n=4
	i=15%=0.15
	Capital Recovery Factor=CRF=(A/P,i,n)
	CRF=(i*((1+i)^n))/(((1+i)^n)-1)
	CRF=(0.15*(1.15^4))/((1.15^4)-1)=	0.350265352
	A=Amount to be saved each year=P*CRF	$78,809.70	(225000*0.350265352)
	Present Worth factor=PWF=(P/A,i,n)
	i=10%=0.1
	n=3
	PWF=(((1+i)^n)-1)/(i*((1+i)^n))
	PWF=((1.1^3)-1)/(0.1*(1.1^3))	2.486851991
	A=Annualoutflow=$3000
	Present Worth of annual outflow=A*PWF	$     7,460.56	(3000*2.486851991)
	Balance amount=1000-7560.56	$     2,539.44
	P=F/((1+i)^n)
	P=$2539.44
	i=10%=0.1
	n=3
	F=2539.44*(1.1^3)=	$     3,380.00
	Equivalent future amount of cash =$3380
	CASH FLOW :
	Year	Cash flow
	0	$10,000
	1	($3,000)
	2	($3,000)
	3	($6,380)	(3000+3380)