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1. For the following cash flow using a discount rate of 6%, compute the following items: a) Present worth b) Future worth (at
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Calculation of Present worth: Year Discounting factor 67. Cash flows (6000) 2000 (4000) 2000 2000 2000 2000 2000 2000 2000 0.(b) Calculation (at the of end future worth of 10th year) Using formula! fv = pv x (1 + r) where fu= PV = Future worth Presen(a) Calculation a worth ( or EAC). Equrivalent onnual cost Using formular EAC = NPU X & 1-(Atun where = n= discounting factor(d2 Calculation of Internal pake of (IRR). Retum Discourling @ 15). CF (6000) 2000 (40002 2000 2000 2ooo 2000 2000 2000 2000= 0.06+ 314 6:4 (0:09) 3934,4 = 0.06 + 3o7 1676 39 34.4 = 0.1382 TIRR = 13.82 4./

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