Assignment No.01
This document was uploaded by user and they confirmed that they have the permission to share it. If you are author or own the copyright of this book, please report to us by using this DMCA report form. Report DMCA
Overview
Download & View Assignment No.01 as PDF for free.
More details
- Words: 482
- Pages: 8
Assignm ent no. 01 MANAGEMENT OF PROJECT RESOURCES PRMG 020 To : Dr. Ibrahim Abdul Rashid
CONTENT CONTENT
PAGE NO.
Cover Page
1
Content
2
Problem 1
3
Problem 2
4
Problem 3
6
Student: Zaki, Tamer Mohamed Nabil PRMG 020 / Summer | ID 700020527 I D:2009 700020527
Cairo
AUC - New
2
PRMG 020 / Summer 2009 | ID 700020527
3
PROBLEMS P ROBLEM #1 A person buys a piece of equipment for $5000 down payment and deferred annual payments for $500 a year for 6 years starting 3 years from now. What is the present worth of the investment if the interest rate is 8% per year?
Fn
= A [(1+i)n-1/i]
F6
= 500 [(1.08)6 – 1/ 0.08] = 500 [1.587 – 1/ 0.08] = 500 * 7.34 = 3.670 $
P
= Fn / (1+i)n = 3670 / (1.08)8 = 3670 / 1.85 = 1.984 $
The present worth of the investment is
= 5000+1984
= 6.984 $
PRMG 020 / Summer 2009 | ID 700020527
4
P ROBLEM #2 A person owning a valuable piece of land decided to sell it to a housing company. His main objective was to obtain a long - term investment income sufficient money to finance the college education of his two children. Since the children were 12 and 2 years of age at that time he was negotiating the contract, he knew that the children would be in college 6 and 16 years, respectively, from the present. He made a proposal to the company that it pay him $20.000 per year for 20 years beginning one year from now plus 10.000 six years from now and $15.000 sixteen years from now. If the company wanted to pay off its price immediately, how much would it have to pay now if the interest rate is 16% per annum?
Fn
= A [(1+i)n-1/i]
F1
= 20000 [(1.16)20 – 1 / 0.16] = 20000 [19.5 – 1 / 0.16] = 20000 * 115.625 = 2,312,500 $
PRMG 020 / Summer 2009 | ID 700020527
5
F2
= 10000 [(1.16)14 – 1 / 0.16] = 10000 [7.99 – 1 / 0.16] = 10000 * 43.67 = 436,700 $
F3
= 5000 [(1.16)4 – 1 / 0.16] = 5000 [1.81 – 1 / 0.16] = 5000 * 5.06 = 25,050 $
Fall
= 2,312,500 + 436,700 + 25,050 = 2,774,250 $
P
= Fn / (1+i)n = 2774250 / (1.16)20 = 2774250 / 19.5 = 142,269.2 $
PRMG 020 / Summer 2009 | ID 700020527
6
P ROBLEM #3 Calculate the 20 years equivalent uniform annual worth for the cash flow of problem #2
Fn
= A [(1+i)n-1/i]
2,774,250 = A [(1.16)20 – 1 / 0.16] = A * 115.625 A
= 2774250 / 115.625 = 23993.5 $
PRMG 020 / Summer 2009 | ID 700020527
7
PRMG 020 / Summer 2009 | ID 700020527
8
CONTENT CONTENT
PAGE NO.
Cover Page
1
Content
2
Problem 1
3
Problem 2
4
Problem 3
6
Student: Zaki, Tamer Mohamed Nabil PRMG 020 / Summer | ID 700020527 I D:2009 700020527
Cairo
AUC - New
2
PRMG 020 / Summer 2009 | ID 700020527
3
PROBLEMS P ROBLEM #1 A person buys a piece of equipment for $5000 down payment and deferred annual payments for $500 a year for 6 years starting 3 years from now. What is the present worth of the investment if the interest rate is 8% per year?
Fn
= A [(1+i)n-1/i]
F6
= 500 [(1.08)6 – 1/ 0.08] = 500 [1.587 – 1/ 0.08] = 500 * 7.34 = 3.670 $
P
= Fn / (1+i)n = 3670 / (1.08)8 = 3670 / 1.85 = 1.984 $
The present worth of the investment is
= 5000+1984
= 6.984 $
PRMG 020 / Summer 2009 | ID 700020527
4
P ROBLEM #2 A person owning a valuable piece of land decided to sell it to a housing company. His main objective was to obtain a long - term investment income sufficient money to finance the college education of his two children. Since the children were 12 and 2 years of age at that time he was negotiating the contract, he knew that the children would be in college 6 and 16 years, respectively, from the present. He made a proposal to the company that it pay him $20.000 per year for 20 years beginning one year from now plus 10.000 six years from now and $15.000 sixteen years from now. If the company wanted to pay off its price immediately, how much would it have to pay now if the interest rate is 16% per annum?
Fn
= A [(1+i)n-1/i]
F1
= 20000 [(1.16)20 – 1 / 0.16] = 20000 [19.5 – 1 / 0.16] = 20000 * 115.625 = 2,312,500 $
PRMG 020 / Summer 2009 | ID 700020527
5
F2
= 10000 [(1.16)14 – 1 / 0.16] = 10000 [7.99 – 1 / 0.16] = 10000 * 43.67 = 436,700 $
F3
= 5000 [(1.16)4 – 1 / 0.16] = 5000 [1.81 – 1 / 0.16] = 5000 * 5.06 = 25,050 $
Fall
= 2,312,500 + 436,700 + 25,050 = 2,774,250 $
P
= Fn / (1+i)n = 2774250 / (1.16)20 = 2774250 / 19.5 = 142,269.2 $
PRMG 020 / Summer 2009 | ID 700020527
6
P ROBLEM #3 Calculate the 20 years equivalent uniform annual worth for the cash flow of problem #2
Fn
= A [(1+i)n-1/i]
2,774,250 = A [(1.16)20 – 1 / 0.16] = A * 115.625 A
= 2774250 / 115.625 = 23993.5 $
PRMG 020 / Summer 2009 | ID 700020527
7
PRMG 020 / Summer 2009 | ID 700020527
8
Related Documents
Assignment
November 2019 71
Assignment
July 2020 45
Assignment
November 2019 56
Assignment
November 2019 57
Assignment
June 2020 28