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This document discusses the differences between capital and revenue items and how to value them. Capital refers to one-time payments in or out, while revenue consists of regular recurring payments. To value revenue streams, we can use the present value of £1 per year or the amount of £1 per year to calculate their worth today or in the future. For example, if we receive £1,000 annually for 5 years at a 5% interest rate, the future value would be £12,577.80. The document also discusses using annual sinking funds to calculate how much to set aside each year to meet a known future expense.

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DCF - An explanation of Discounted Cash Flow

Discounted cash flow (DCF) is a method for analyzing future income and revenue streams by discounting them back to their present value using time value of money principles. It involves subtracting projected expenditures from income for each period to calculate net cash flow, then discounting the net cash flows using a discount rate and summing them to calculate net present value (NPV). The document provides an example of a DCF analysis for a university considering building student residences, listing projected annual income from rent and expenditures on maintenance, repairs, etc. over a 20 year period with a 5% discount rate, calculating the NPV as £584,748. Key challenges noted are accounting for variable future costs and accurately selecting the discount rate.

Corporate Finance Case Study : Bullock Gold Mining

Seth Bullock plans to open a new gold mine in South Dakota. The CFO, Alma Garrett, estimates the mine will generate cash flows for 8 years based on an initial investment of $400 million. She calculates the projected cash flows and net present value to help the owners make a rational financial decision about the project.

Time value of money

Engineering Economy ,
Engineering Economy, Engineering, Economy, Business and Economy, Business, Economics, Finance, Accounting,

Pay back period ..chapter solution to problems...

This document contains solutions to problems involving capital budgeting techniques. Problem P9-11 involves calculating the internal rate of return (IRR) for three projects - Project A has an IRR of 17%, Project B has an IRR between 8-9% (calculator solution of 8.62%), and Project C has an IRR between 25-26% (calculator solution of 25.41%). The IRR is the discount rate that makes the net present value of cash flows equal to zero. It is used to evaluate mutually exclusive projects and determine the maximum cost of capital for project acceptability.

Cap budget [autosaved]

The document discusses various capital budgeting techniques used to analyze long-term investment projects. It describes methods like net present value (NPV), internal rate of return (IRR), payback period, and accounting rate of return. These techniques discount future cash flows to evaluate projects based on factors like profitability, risk, and investment recovery time. The document provides examples of applying these methods to hypothetical projects and comparing the results.

Chapter 9 q&p

The document contains examples and explanations of various capital budgeting techniques including payback period, discounted payback, net present value, internal rate of return, and profitability index. It analyzes two hypothetical investment projects (A and B) using each method and determines that while some criteria favor project A and others favor project B, the net present value method is preferred and indicates that project A should be accepted.

Calculation of payback period with microsoft excel 2010

An illustrative presentation on how to calculate payback period of an investment using Microsoft Excel functions COUNTIF and HLOOKUP

Payback Analysis

The Payback Analysis answers the questions: How long before I get my money back? Which of these investments is financially better?

DCF - An explanation of Discounted Cash Flow

Discounted cash flow (DCF) is a method for analyzing future income and revenue streams by discounting them back to their present value using time value of money principles. It involves subtracting projected expenditures from income for each period to calculate net cash flow, then discounting the net cash flows using a discount rate and summing them to calculate net present value (NPV). The document provides an example of a DCF analysis for a university considering building student residences, listing projected annual income from rent and expenditures on maintenance, repairs, etc. over a 20 year period with a 5% discount rate, calculating the NPV as £584,748. Key challenges noted are accounting for variable future costs and accurately selecting the discount rate.

Corporate Finance Case Study : Bullock Gold Mining

Seth Bullock plans to open a new gold mine in South Dakota. The CFO, Alma Garrett, estimates the mine will generate cash flows for 8 years based on an initial investment of $400 million. She calculates the projected cash flows and net present value to help the owners make a rational financial decision about the project.

Time value of money

Engineering Economy ,
Engineering Economy, Engineering, Economy, Business and Economy, Business, Economics, Finance, Accounting,

Pay back period ..chapter solution to problems...

This document contains solutions to problems involving capital budgeting techniques. Problem P9-11 involves calculating the internal rate of return (IRR) for three projects - Project A has an IRR of 17%, Project B has an IRR between 8-9% (calculator solution of 8.62%), and Project C has an IRR between 25-26% (calculator solution of 25.41%). The IRR is the discount rate that makes the net present value of cash flows equal to zero. It is used to evaluate mutually exclusive projects and determine the maximum cost of capital for project acceptability.

Cap budget [autosaved]

The document discusses various capital budgeting techniques used to analyze long-term investment projects. It describes methods like net present value (NPV), internal rate of return (IRR), payback period, and accounting rate of return. These techniques discount future cash flows to evaluate projects based on factors like profitability, risk, and investment recovery time. The document provides examples of applying these methods to hypothetical projects and comparing the results.

Chapter 9 q&p

The document contains examples and explanations of various capital budgeting techniques including payback period, discounted payback, net present value, internal rate of return, and profitability index. It analyzes two hypothetical investment projects (A and B) using each method and determines that while some criteria favor project A and others favor project B, the net present value method is preferred and indicates that project A should be accepted.

Calculation of payback period with microsoft excel 2010

An illustrative presentation on how to calculate payback period of an investment using Microsoft Excel functions COUNTIF and HLOOKUP

Payback Analysis

The Payback Analysis answers the questions: How long before I get my money back? Which of these investments is financially better?

Chap009

This document discusses criteria for properly identifying and calculating cash flows for valuation using discounted cash flow analysis. It emphasizes that cash flows, not accounting income, should be used. An example compares NPV using cash flows versus accounting income to show the difference. The document also discusses factors like incremental cash flows, sunk costs, opportunity costs, working capital, inflation, and methods for calculating total cash flow from capital investments, working capital, and operations.

Chap008

This chapter discusses various capital budgeting techniques used to evaluate investment projects, including net present value (NPV), internal rate of return (IRR), payback period, and profitability index. It provides examples of calculating and applying each method, and highlights potential pitfalls in using some techniques like IRR. Financial calculators and Excel can be used to calculate metrics like NPV and IRR.

Single Family Assets Lending

This document outlines the terms of four residential real estate lending programs: Purchase, Refinance, Rehab, and Resale. It provides details on the intended use, note term, construction period allowed, loan to value ratio, valuation method, interest rate and payment structure, amortization period, construction agreement requirements, origination points and fees, and underwriting and servicing fees for each program. Borrowers can apply for these loan programs by contacting the lender for additional information.

02 time-value-of-money

- Cash flow diagrams (CFDs) illustrate the size, timing, and direction (positive or negative) of cash flows from engineering projects over time.
- A CFD is created by drawing a segmented time line and adding vertical arrows to represent cash inflows or outflows at each time period.
- Common categories of cash flows include first costs, operating/maintenance costs, salvage value, revenues, and overhauls.

590 8

This document discusses methods for estimating the income and expenses of a real estate property to determine its value. It describes how to calculate potential gross income, vacancy and credit losses to determine effective gross income. Operating expenses like management, taxes, insurance and reserves are then subtracted to get net operating income. This income can be capitalized using market rates or discounted in a cash flow analysis to estimate the property's worth. The document provides an example analysis that values the property at $80,000 using direct capitalization and $103,000 using discounted cash flow.

Capital Budgeting Er. S Sood

The document discusses various capital budgeting techniques used to evaluate long-term investment projects. It describes traditional methods like payback period and accounting rate of return, as well as discounted cash flow methods like net present value, internal rate of return, and profitability index. These time-adjusted methods account for the time value of money and required rate of return when analyzing projects. The document also discusses factors that introduce risk and uncertainty into capital budgeting decisions.

Ch12ppt

The document discusses concepts related to project cash flow analysis including relevant cash flows, unequal project lives, abandonment value, inflation, and cash flow estimation bias. It provides an example project with initial outlay, operating cash flows, tax rate, salvage value, and cash flows over 4 years. It calculates NPV, IRR, MIRR, and payback for the example project. The document also discusses making decisions between mutually exclusive projects using replacement chains and equivalent annual annuity analysis.

Chap010

This document provides an overview of capital budgeting techniques for project analysis, including sensitivity analysis, scenario analysis, break-even analysis, operating leverage, and real options. It includes examples demonstrating how to perform sensitivity analysis by changing variables like sales and fixed costs, scenario analysis by introducing competition, and calculating break-even points and degree of operating leverage. The document emphasizes that these techniques help analyze the robustness of projects and value the flexibility provided by real options.

Simple annuities

This document discusses annuities and formulas for calculating periodic payments, present value, and accumulated value for different types of annuities. It provides examples of using the annuity formulas to solve problems related to loans, investments, and determining interest rates. Key formulas presented include calculating the periodic payment as the principal divided by the annuity factor, and calculating present value or accumulated value as the periodic payment multiplied by the annuity factor. Interpolation is also described as a method to find unknown interest rates or time periods in annuity calculations.

Chap005

This document discusses key concepts related to the time value of money, including future value, present value, compound interest, simple interest, annuities, and inflation. It provides examples to illustrate how to calculate future values, present values, interest rates, and real interest rates accounting for inflation. The key concepts are that money has a time value, a dollar today is worth more than a dollar in the future, and compound interest allows money to grow exponentially over time through reinvestment of interest.

Corp finance topics

This slide set is a work in progress and is embedded in my Principles of Finance course, which is also a work in progress, that I teach to computer scientists and engineers
http://awesomefinance.weebly.com/

Payback period by harikrishnanan

Payback period (PP) is the number of years it takes for a company to recover its original investment in a project, when net cash flow equals zero. In the calculation of the payback period, the cash flows of the project must first be estimated. The payback period is then a simple calculation.

Financial mathematics

The document discusses various topics related to interest rates and compound interest calculations. It begins by reviewing Grade 11 work including simple and compound interest, nominal and effective interest rates, and timelines. It then outlines topics to be covered in Grade 12, such as calculating investment periods using logarithms, future value annuities, present value annuities, and choosing better investment options. Various examples of compound interest, simple interest, and annuity calculations are provided.

Capital structure winston joseph

The document discusses capital structure and its importance. Capital structure refers to the relationship between long-term financing sources like debentures, preference shares, and equity shares. There should be a proper mix of debt and equity to finance a firm's assets. A company's capital structure can consist of equity shares only, equity and preference shares, equity shares and debentures, or a mix of all three. The goal is to maximize shareholder value and earnings per share. A proper capital structure also aims to minimize costs, increase share prices, provide investment opportunities, support country growth, and establish creditworthiness for a new company.

Chap004

This document discusses various metrics used to measure corporate performance, including market value added, economic value added, book rates of return, and financial ratios. It provides definitions and examples of calculating return on capital, return on assets, return on equity, asset turnover ratio, operating profit margin, long-term debt ratio, and times interest earned ratio using financial data from Lowe's income statement and balance sheet. The purpose of the various metrics and ratios is to evaluate corporate performance, profitability, efficiency, and leverage.

3. interest and annuity

This document discusses concepts related to interest and annuities, including simple interest, compound interest, and annuity formulas. It provides examples of calculating simple interest on principal amounts over periods of time at given interest rates. It also defines terms used in annuities such as immediate annuity, annuity due, and annuity certain. Formulas are given for calculating accumulated value and present worth of annuities paying a fixed amount over a number of periods at a compound interest rate. Worked examples demonstrate applying the formulas to various scenarios.

Annuity

This document defines and explains different types of annuities, including ordinary annuity, annuity due, and deferred annuity. It provides formulas to calculate the present value and regular payments of each type of annuity. Key details include that ordinary annuity payments are made at the end of each interval, annuity due payments are made at the beginning of each interval, and deferred annuity payments begin at a later time.

Capital budgeting

This document discusses various capital budgeting techniques including net present value (NPV), internal rate of return (IRR), modified internal rate of return (MIRR), payback period, and discounted payback period. It provides examples of calculating each of these metrics for two hypothetical projects, Project A and Project B. Based on the different criteria, it determines that Project A should be accepted over Project B in most cases due to having a higher NPV, IRR, MIRR, and shorter payback and discounted payback periods.

Time value of money 2

This document discusses different time value of money concepts related to revenue streams, including:
1) The present and future value of a series of regular payments (amount of £1 per annum), using an example of paying £3,000 per year for 3 years at 5% interest.
2) The present value of a series of regular payments (present value of £1 per annum), using an example of estimated £7,500 annual savings from solar panels over 20 years.
3) The annual sinking fund concept to determine how much needs to be set aside each year to amount to a target sum in the future, using an example of replacing an HVAC system that will cost £12,000

How to Find EAR and APR in MS Excel?

In this PowerPoint, You will calculate annual percentage rate (APR) and Effective Interest Rate (EAR) in MS Excel. You find the example and solution as well.

1

The document provides an overview of engineering economics concepts including cash flow diagrams, time value of money, equivalence, and economic analysis methods like present worth analysis and rate of return analysis. It discusses how cash flows are depicted visually over time in diagrams and how compound interest formulas are used to calculate future and present values when evaluating projects. Examples are given for present worth analysis of a dump truck purchase and calculating rate of return on an initial investment.

Engineering economics and finance

Slides for the eLearning course Separation and purification processes in biorefineries (https://open-learn.xamk.fi) in IMPRESS project (https://www.spire2030.eu/impress).
Section: Mass transfer processes
Subject: 3.4 Economics and finance

Chap009

This document discusses criteria for properly identifying and calculating cash flows for valuation using discounted cash flow analysis. It emphasizes that cash flows, not accounting income, should be used. An example compares NPV using cash flows versus accounting income to show the difference. The document also discusses factors like incremental cash flows, sunk costs, opportunity costs, working capital, inflation, and methods for calculating total cash flow from capital investments, working capital, and operations.

Chap008

This chapter discusses various capital budgeting techniques used to evaluate investment projects, including net present value (NPV), internal rate of return (IRR), payback period, and profitability index. It provides examples of calculating and applying each method, and highlights potential pitfalls in using some techniques like IRR. Financial calculators and Excel can be used to calculate metrics like NPV and IRR.

Single Family Assets Lending

This document outlines the terms of four residential real estate lending programs: Purchase, Refinance, Rehab, and Resale. It provides details on the intended use, note term, construction period allowed, loan to value ratio, valuation method, interest rate and payment structure, amortization period, construction agreement requirements, origination points and fees, and underwriting and servicing fees for each program. Borrowers can apply for these loan programs by contacting the lender for additional information.

02 time-value-of-money

- Cash flow diagrams (CFDs) illustrate the size, timing, and direction (positive or negative) of cash flows from engineering projects over time.
- A CFD is created by drawing a segmented time line and adding vertical arrows to represent cash inflows or outflows at each time period.
- Common categories of cash flows include first costs, operating/maintenance costs, salvage value, revenues, and overhauls.

590 8

This document discusses methods for estimating the income and expenses of a real estate property to determine its value. It describes how to calculate potential gross income, vacancy and credit losses to determine effective gross income. Operating expenses like management, taxes, insurance and reserves are then subtracted to get net operating income. This income can be capitalized using market rates or discounted in a cash flow analysis to estimate the property's worth. The document provides an example analysis that values the property at $80,000 using direct capitalization and $103,000 using discounted cash flow.

Capital Budgeting Er. S Sood

The document discusses various capital budgeting techniques used to evaluate long-term investment projects. It describes traditional methods like payback period and accounting rate of return, as well as discounted cash flow methods like net present value, internal rate of return, and profitability index. These time-adjusted methods account for the time value of money and required rate of return when analyzing projects. The document also discusses factors that introduce risk and uncertainty into capital budgeting decisions.

Ch12ppt

The document discusses concepts related to project cash flow analysis including relevant cash flows, unequal project lives, abandonment value, inflation, and cash flow estimation bias. It provides an example project with initial outlay, operating cash flows, tax rate, salvage value, and cash flows over 4 years. It calculates NPV, IRR, MIRR, and payback for the example project. The document also discusses making decisions between mutually exclusive projects using replacement chains and equivalent annual annuity analysis.

Chap010

This document provides an overview of capital budgeting techniques for project analysis, including sensitivity analysis, scenario analysis, break-even analysis, operating leverage, and real options. It includes examples demonstrating how to perform sensitivity analysis by changing variables like sales and fixed costs, scenario analysis by introducing competition, and calculating break-even points and degree of operating leverage. The document emphasizes that these techniques help analyze the robustness of projects and value the flexibility provided by real options.

Simple annuities

This document discusses annuities and formulas for calculating periodic payments, present value, and accumulated value for different types of annuities. It provides examples of using the annuity formulas to solve problems related to loans, investments, and determining interest rates. Key formulas presented include calculating the periodic payment as the principal divided by the annuity factor, and calculating present value or accumulated value as the periodic payment multiplied by the annuity factor. Interpolation is also described as a method to find unknown interest rates or time periods in annuity calculations.

Chap005

This document discusses key concepts related to the time value of money, including future value, present value, compound interest, simple interest, annuities, and inflation. It provides examples to illustrate how to calculate future values, present values, interest rates, and real interest rates accounting for inflation. The key concepts are that money has a time value, a dollar today is worth more than a dollar in the future, and compound interest allows money to grow exponentially over time through reinvestment of interest.

Corp finance topics

This slide set is a work in progress and is embedded in my Principles of Finance course, which is also a work in progress, that I teach to computer scientists and engineers
http://awesomefinance.weebly.com/

Payback period by harikrishnanan

Payback period (PP) is the number of years it takes for a company to recover its original investment in a project, when net cash flow equals zero. In the calculation of the payback period, the cash flows of the project must first be estimated. The payback period is then a simple calculation.

Financial mathematics

The document discusses various topics related to interest rates and compound interest calculations. It begins by reviewing Grade 11 work including simple and compound interest, nominal and effective interest rates, and timelines. It then outlines topics to be covered in Grade 12, such as calculating investment periods using logarithms, future value annuities, present value annuities, and choosing better investment options. Various examples of compound interest, simple interest, and annuity calculations are provided.

Capital structure winston joseph

The document discusses capital structure and its importance. Capital structure refers to the relationship between long-term financing sources like debentures, preference shares, and equity shares. There should be a proper mix of debt and equity to finance a firm's assets. A company's capital structure can consist of equity shares only, equity and preference shares, equity shares and debentures, or a mix of all three. The goal is to maximize shareholder value and earnings per share. A proper capital structure also aims to minimize costs, increase share prices, provide investment opportunities, support country growth, and establish creditworthiness for a new company.

Chap004

This document discusses various metrics used to measure corporate performance, including market value added, economic value added, book rates of return, and financial ratios. It provides definitions and examples of calculating return on capital, return on assets, return on equity, asset turnover ratio, operating profit margin, long-term debt ratio, and times interest earned ratio using financial data from Lowe's income statement and balance sheet. The purpose of the various metrics and ratios is to evaluate corporate performance, profitability, efficiency, and leverage.

3. interest and annuity

This document discusses concepts related to interest and annuities, including simple interest, compound interest, and annuity formulas. It provides examples of calculating simple interest on principal amounts over periods of time at given interest rates. It also defines terms used in annuities such as immediate annuity, annuity due, and annuity certain. Formulas are given for calculating accumulated value and present worth of annuities paying a fixed amount over a number of periods at a compound interest rate. Worked examples demonstrate applying the formulas to various scenarios.

Annuity

This document defines and explains different types of annuities, including ordinary annuity, annuity due, and deferred annuity. It provides formulas to calculate the present value and regular payments of each type of annuity. Key details include that ordinary annuity payments are made at the end of each interval, annuity due payments are made at the beginning of each interval, and deferred annuity payments begin at a later time.

Capital budgeting

This document discusses various capital budgeting techniques including net present value (NPV), internal rate of return (IRR), modified internal rate of return (MIRR), payback period, and discounted payback period. It provides examples of calculating each of these metrics for two hypothetical projects, Project A and Project B. Based on the different criteria, it determines that Project A should be accepted over Project B in most cases due to having a higher NPV, IRR, MIRR, and shorter payback and discounted payback periods.

Chap009

Chap009

Chap008

Chap008

Single Family Assets Lending

Single Family Assets Lending

02 time-value-of-money

02 time-value-of-money

590 8

590 8

Capital Budgeting Er. S Sood

Capital Budgeting Er. S Sood

Ch12ppt

Ch12ppt

Chap010

Chap010

Simple annuities

Simple annuities

Chap005

Chap005

Corp finance topics

Corp finance topics

Payback period by harikrishnanan

Payback period by harikrishnanan

Financial mathematics

Financial mathematics

Capital structure winston joseph

Capital structure winston joseph

Chap004

Chap004

3. interest and annuity

3. interest and annuity

Annuity

Annuity

Capital budgeting

Capital budgeting

Time value of money 2

This document discusses different time value of money concepts related to revenue streams, including:
1) The present and future value of a series of regular payments (amount of £1 per annum), using an example of paying £3,000 per year for 3 years at 5% interest.
2) The present value of a series of regular payments (present value of £1 per annum), using an example of estimated £7,500 annual savings from solar panels over 20 years.
3) The annual sinking fund concept to determine how much needs to be set aside each year to amount to a target sum in the future, using an example of replacing an HVAC system that will cost £12,000

How to Find EAR and APR in MS Excel?

In this PowerPoint, You will calculate annual percentage rate (APR) and Effective Interest Rate (EAR) in MS Excel. You find the example and solution as well.

1

The document provides an overview of engineering economics concepts including cash flow diagrams, time value of money, equivalence, and economic analysis methods like present worth analysis and rate of return analysis. It discusses how cash flows are depicted visually over time in diagrams and how compound interest formulas are used to calculate future and present values when evaluating projects. Examples are given for present worth analysis of a dump truck purchase and calculating rate of return on an initial investment.

Engineering economics and finance

Slides for the eLearning course Separation and purification processes in biorefineries (https://open-learn.xamk.fi) in IMPRESS project (https://www.spire2030.eu/impress).
Section: Mass transfer processes
Subject: 3.4 Economics and finance

Engineering economics

Engineering economics deals with evaluating the costs and benefits of engineering projects over time. It uses time value of money concepts like present and future value to analyze cash flows. Cash flows are summarized in diagrams with costs below and benefits above the time line. Equivalence techniques convert cash flows to a common point in time to compare project alternatives. Present worth analysis discounts all cash flows to the present using a discount rate to determine the net present value of projects.

BlueBookAcademy.com Explains Capital Budgeting

Lets run through the principles of capital budgeting, making sound financial decisions to allocate resources and finances effectively. Capital budgeting is widely used in corporate finance, project appraisal and many other applications. We cover the important concepts of net present values (NPV) and internal rates of return (IRR).

FD8004 PEIM - II Unit.pptx

1) The document discusses various concepts related to time value of money including interest, compound interest, future value, present value, and effective interest rate.
2) Examples are provided to demonstrate how to calculate future value, present value, sinking funds, and annual payments using time value of money formulas.
3) The key factors that determine time value are the principal amount, interest rate, and number of periods; the interest earned allows money now to be worth more in the future.

Engineering economics Slides for Postgraduates

Engineering management involves applying engineering knowledge and judgment to develop solutions that utilize natural resources for the benefit of humanity. There are physical and economic environments to consider. The engineering process includes determining objectives and strategies, proposing solutions, evaluating proposals, and assisting with decision making. Engineering economy deals with analyzing the costs and benefits of projects over time. It is used to evaluate which projects are worthwhile and how projects should be designed and prioritized. Manufacturing costs include direct materials, direct labor, and manufacturing overhead. Prime costs refer to direct materials and labor, while factory costs also include factory overheads.

Ch 5 Time Value Money.ppt

This document provides an introduction to time value of money concepts including future value, present value, interest rates, and formulas. It outlines key skills like computing future and present values. Examples are provided to demonstrate future and present value calculations in 1-5 periods at various interest rates. The effects of compounding versus simple interest and relationships between interest rates, time periods, and present/future values are explored.

MBA fin mgt Lecture 5 inv appraisal.pptx

The discounted payback period is 3 years. In year 3, the cumulative discounted cash flows of $3,636 + $3,719 + $7,513 = $14,868 exceeds the initial investment of $10,000.

unit three.pdf

Here are the key steps to solve this problem:
* Future sum (F) = Rs. 1,00,000
* Interest rate (i) = 15%
* Number of periods (n) = 10 years
* Interest is compounded annually
* To find the present worth (P):
* P = F / (1 + i)^n
* P = Rs. 1,00,000 / (1 + 0.15)^10
* P = Rs. 1,00,000 / 2.472
* P = Rs. Rs. 40,320
Therefore, the single payment that should be made now to receive Rs. 1,00,000 after 10 years at

Chapter 4 : Time Value of money part 1 & 2

Engineer economics chp4 time value of money

EngEconPatel03NOV04.ppt

This document discusses key concepts in engineering economics including cash flows, time value of money, equivalence, and methods of economic analysis. It provides examples of how to draw cash flow diagrams, calculate future and present values, and use techniques like present worth analysis and rate of return analysis to evaluate engineering projects and determine if they are economically justified.

engineering economics presentation1.pptx

This document discusses key concepts in engineering economics including cash flows, time value of money, equivalence, and methods of economic analysis. It provides examples of how to draw cash flow diagrams, calculate future and present values, and use techniques like present worth analysis and rate of return analysis to evaluate engineering projects and determine if they are economically justified.

Week 6 slides (1)

This document discusses commercial property valuation using capitalization rates (yields). It provides an overview of the rationale for valuations, competencies required, and the net initial yield approach. For the net initial yield approach, you need the current rent and estimated net initial yield to calculate the property value. For example, a property with £130,000 annual rent and estimated 3.78% net initial yield would be valued around £3.25 million after accounting for transaction costs. Expectations of rental growth are factored into the capitalization rate. The document provides examples of valuing fixed and growing income streams using discounted cash flows or adjusted discount rates.

Topic 6 f fc(1)

The document provides an overview of key concepts for financial managers regarding capital budgeting. It discusses:
1) The goals of financial managers to maximize shareholder value by selecting projects with positive net present value (NPV). NPV measures the incremental cash flows of projects discounted at the cost of capital.
2) The distinction between accounting profits and cash flows that are relevant for capital budgeting. Cash flows consider the timing of cash inflows and outflows while accounting adjusts for accruals.
3) The concept of incremental cash flows which are the difference in cash flows from undertaking a project versus not undertaking it. Only incremental cash flows are considered in the analysis.
4) A detailed example is

anuity

This document discusses ordinary general annuities, where the interest conversion period and payment period are different lengths. It provides learning objectives about computing future value, present value, payments, number of periods, and interest rates for ordinary general annuities. It also gives examples of interest conversion periods being longer, shorter, or fractional compared to the payment period. Several practice problems are provided at the end to calculate future values, present values, payments, number of periods, and interest rates for various annuity scenarios.

Time value of money

This document discusses the time value of money and how to calculate future and present values using interest rates. It provides examples of calculating future values over 5 years at a 5% interest rate through yearly compounding. It also shows how to use the future value formula (1+i)n and inverse present value formula 1/(1+i)n to calculate future and present values directly rather than calculating year-by-year. The key concepts covered are interest, net present value, calculating future amounts, and determining present value.

Unit 4 simple and compound interest

The document discusses various topics related to mathematics in finance including simple and compound interest, nominal and effective interest rates, present value, annuities, and sinking funds. It provides formulas to calculate interest, principal amounts, present value of annuities, and sinking fund amounts. Examples are given to demonstrate calculating interest compounded annually, semiannually, quarterly, and monthly. The key differences between annuities and sinking funds are that annuities involve making deposits over time into an account, while sinking funds involve periodic withdrawals from an account.

L3 - With Answers.pdf

This document discusses key concepts related to engineering economics, including capital, interest, cash flow diagrams, present worth, future value, nominal interest rates, effective interest rates, and simple vs compound interest. It provides examples and formulas for calculating future value, present worth, nominal interest rates, and effective interest rates. The key points are:
- Interest rates are used to determine the time value of money and allow economic comparisons of cash flows over different time periods.
- Compound interest accounts for interest earned on both the principal amount and previously accumulated interest.
- More frequent compounding results in a higher effective interest rate than the nominal annual rate.
- Present worth and future value formulas allow determining the equivalent value

Time value of money 2

Time value of money 2

How to Find EAR and APR in MS Excel?

How to Find EAR and APR in MS Excel?

1

1

Engineering economics and finance

Engineering economics and finance

Engineering economics

Engineering economics

BlueBookAcademy.com Explains Capital Budgeting

BlueBookAcademy.com Explains Capital Budgeting

FD8004 PEIM - II Unit.pptx

FD8004 PEIM - II Unit.pptx

Engineering economics Slides for Postgraduates

Engineering economics Slides for Postgraduates

Ch 5 Time Value Money.ppt

Ch 5 Time Value Money.ppt

MBA fin mgt Lecture 5 inv appraisal.pptx

MBA fin mgt Lecture 5 inv appraisal.pptx

unit three.pdf

unit three.pdf

Chapter 4 : Time Value of money part 1 & 2

Chapter 4 : Time Value of money part 1 & 2

EngEconPatel03NOV04.ppt

EngEconPatel03NOV04.ppt

engineering economics presentation1.pptx

engineering economics presentation1.pptx

Week 6 slides (1)

Week 6 slides (1)

Topic 6 f fc(1)

Topic 6 f fc(1)

anuity

anuity

Time value of money

Time value of money

Unit 4 simple and compound interest

Unit 4 simple and compound interest

L3 - With Answers.pdf

L3 - With Answers.pdf

IWFM Direct - assessment tips Jan 24.pptx

- Chris Garbett is the tutor and a retired lecturer who was previously the Director of the Centre for Facilities Management at Leeds Beckett University, where he oversaw distance learning courses in facilities management.
- The document provides tips for students on assessments, including reading the question carefully, not overthinking what the assessors want, using examples from their workplace or more broadly, having good writing style and referencing, and seeking help from the tutor, assessor, or IWFM Academy administration as needed.
- The main message is that assessments aim to evaluate understanding clearly demonstrated in responses, not trick students, and support is available to help with the process.

Role of FM.ppt

This presentation discusses facility management (FM) roles at different levels within an organization. It defines FM according to international standards as integrating people, place, and process to improve quality of life and business productivity. FM provides support services to allow an organization's core activities. These support services include both "hard" building-related functions and "soft" people-related functions. FM operates at operational, tactical, and strategic levels to manage these services across public, private, and nonprofit sectors.

SPACE METRICS.pptx

This document discusses various metrics used to measure space in buildings. It outlines common terms like gross external area, gross internal area, net lettable/rentable area, net internal area, circulation space, and common areas. It explains how each term is defined and measured and which metrics are typically used for purposes like ratings, insurance, leasing, and occupancy calculations. The document also briefly discusses specialized space metrics for retail, industrial, and hospitality spaces as well as considerations for how COVID-19 has impacted workspace planning and measurements.

CSR and Sustainability Aug 23.pptx

This document summarizes a presentation on corporate social responsibility (CSR) and sustainability for facilities management. It discusses:
- The principles of CSR, including examples from a leading bakery of community investment, responsible sourcing, reducing environmental impact, and supporting employees.
- The three pillars of sustainability: economic, environmental and social. Areas of focus include energy, waste, transport and responsible sourcing.
- Tools for measuring sustainability performance, such as ISO 14001 certification, surveys and analyzing usage/cost data. Legislation around climate change, waste and the environment was also covered.
- The concept of "triple bottom line" accounting to evaluate financial, social and environmental impacts.

Pestle analysis in FM

This document provides an overview of how to conduct a PESTLE analysis in facilities management. It defines PESTLE as covering political, economic, social, technological, legal, and environmental factors. It explains that PESTLE analysis can be used to develop strategies, identify emerging trends and issues, and inform major decisions. The document recommends conducting a PESTLE analysis as a table that analyzes arenas/events and considers their possible implications. It provides an example table analyzing potential implications of Brexit, economic slowdown, work from home trends, and other issues for an organization providing office accommodation. Finally, it notes that PESTLE analysis can be tailored based on the specific organization or situation being considered.

SMART Objective setting in FM

The document discusses the SMART methodology for setting objectives. SMART stands for Specific, Measurable, Achievable, Relevant, and Time-bound. The methodology is used to ensure objectives are clear, quantifiable goals that can realistically be achieved within a set timeframe. Examples are provided for non-SMART and SMART objectives related to reducing costs, staff qualifications, and responding to call outs. Following the SMART framework helps create objectives that are unambiguous and can be effectively evaluated.

Developing the FM strategy

This document discusses factors that influence facilities management (FM) strategy, including organizational strategy, stakeholder expectations, and external factors. It provides examples of different organizational strategies in various sectors like public, private, and non-profit. Stakeholder expectations can be assessed through understanding who the stakeholders are and what their expectations are. External factors that influence FM strategy can be analyzed using PESTLE analysis. The FM strategy further develops options for areas like property, service delivery, transport, and catering. Finally, the strategy should be monitored using metrics and reviewed based on monitoring findings as well as changes in expectations, organizational strategy, and external environment.

Comparing investments the cherry picker with voice and template

1) The document compares the costs of buying versus renting a hydraulic lift (cherry picker) needed for building maintenance.
2) To analyze the costs, it calculates the net present value of both options over the lift's lifetime, taking into account the purchase price, insurance, maintenance, fuel costs, and resale value for buying, or weekly rental costs for renting.
3) The initial calculations show renting to be cheaper, but additional considerations are made for repair costs if buying and the possibility of needing the lift for more weeks per year than initially estimated.

RACI in FM

The document defines RACI as a framework that identifies who is Responsible, Accountable, should be Consulted, and needs to be Informed on various tasks or activities. It provides definitions and examples for each role. Specifically, Responsible refers to those who do the work. Accountable signs off and ensures the task is done correctly. Consulted are those with relevant expertise. Informed are those who need to know about the task but don't directly involved. The document concludes with an example RACI matrix mapping these roles to the activities in a catering service to plan menus and purchases.

Property strategy

A coordinated property strategy is essential for effectively managing an organization's property holdings. Developing a property strategy requires collecting basic information about owned properties, including purpose, utilization, functional suitability, operating costs, opportunity costs, value, and condition. A successful property strategy aligns real estate decisions with the overall corporate vision and strategies.

Maintenance planning & control

A maintenance plan begins with a condition survey conducted by a chartered surveyor to identify defects and schedule repairs. Repairs are prioritized based on risk, compliance, legislation, warranties, and functional or structural issues. A maintenance schedule then outlines the priority, item, and timescale for each repair from immediate to over 3 years. Progress is monitored through inspections, spreadsheets, and user feedback to evaluate if objectives are being met. The strategy can then be changed in response to organizational, legal, external event, or monitoring analysis factors.

Comparing investments the cherry picker

The document compares the costs of buying versus renting a hydraulic lift (cherry picker) for building maintenance. It calculates the net present value of both options using different assumptions for usage levels, lifetime, costs of purchase, insurance, maintenance, hire rates, and resale value. The analysis shows that buying could be better if usage is high and the equipment is kept for its full lifetime, while renting may be preferable if usage is uncertain or irregular to avoid future purchase costs. A spreadsheet is recommended to allow flexibility in modeling different cost and usage scenarios.

Comparing investments the cherry picker

The document compares the costs of buying versus renting a hydraulic lift (cherry picker) for building maintenance. It calculates the net present value of both options using different assumptions for usage, costs, and timelines. The purchase option has higher initial costs but lower ongoing costs, while renting has no upfront cost but higher annual fees. Creating a spreadsheet allows testing different scenarios to account for uncertainty and changing circumstances over time. The optimal choice depends on the specific assumptions used for each unique situation.

Comparing investments the cherry picker

The document compares the costs of buying versus renting a hydraulic lift (cherry picker) for building maintenance. It calculates the net present value of both options using different assumptions for usage, costs, and timelines. The purchase option has higher initial costs but lower ongoing costs, while renting has no upfront cost but higher annual fees. Creating a spreadsheet allows testing different scenarios to account for uncertainty and changing circumstances over time.

Organization Chart Roles & Responsibilities Matrix

This document provides a project organization chart and roles and responsibilities matrix for a project. The organization chart shows the leadership structure including an executive sponsor, project leader, project manager, core team, functional teams, and project resources. The roles and responsibilities matrix defines the responsibilities and expected deliverables for each functional team.

Organization Chart & Project Responsibilities

This document provides a project organization chart and roles and responsibilities matrix for a project. The organization chart shows the leadership structure including an executive sponsor, project leader, project manager, core team, functional teams, and project resources. The roles and responsibilities matrix defines the responsibilities and expected deliverables for each functional team.

Lean management

Lean management aims to maximize customer value through the reduction of waste in processes. It addresses issues like low productivity, long cycle times, high costs, waste, and dissatisfied customers and employees. While similar to alternatives like Six Sigma and Scientific Management, lean management can be implemented immediately without specialized training and involves the entire workforce in improvements. Key principles include adding value, shifting focus from departments to processes, delaying commitments, and discouraging departmental evaluations. Companies that have successfully implemented lean management, like Toyota and Starwood Hotels, have seen significant gains in productivity, reductions in waste, and improvements in revenues and customer satisfaction.

IWFM Direct - assessment tips Jan 24.pptx

IWFM Direct - assessment tips Jan 24.pptx

Role of FM.ppt

Role of FM.ppt

SPACE METRICS.pptx

SPACE METRICS.pptx

CSR and Sustainability Aug 23.pptx

CSR and Sustainability Aug 23.pptx

Pestle analysis in FM

Pestle analysis in FM

SMART Objective setting in FM

SMART Objective setting in FM

Developing the FM strategy

Developing the FM strategy

Comparing investments the cherry picker with voice and template

Comparing investments the cherry picker with voice and template

RACI in FM

RACI in FM

Property strategy

Property strategy

Maintenance planning & control

Maintenance planning & control

Comparing investments the cherry picker

Comparing investments the cherry picker

Comparing investments the cherry picker

Comparing investments the cherry picker

Comparing investments the cherry picker

Comparing investments the cherry picker

Organization Chart Roles & Responsibilities Matrix

Organization Chart Roles & Responsibilities Matrix

Organization Chart & Project Responsibilities

Organization Chart & Project Responsibilities

Lean management

Lean management

Traditional Musical Instruments of Arunachal Pradesh and Uttar Pradesh - RAYH...

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RHEOLOGY Physical pharmaceutics-II notes for B.pharm 4th sem students

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مصحف القراءات العشر أعد أحرف الخلاف سمير بسيوني.pdf

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Standardized tool for Intelligence test.

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How to Predict Vendor Bill Product in Odoo 17

This slide will guide us through the process of predicting vendor bill products based on previous purchases from the vendor in Odoo 17.

BIOLOGY NATIONAL EXAMINATION COUNCIL (NECO) 2024 PRACTICAL MANUAL.pptx

Practical manual for National Examination Council, Nigeria.
Contains guides on answering questions on the specimens provided

Level 3 NCEA - NZ: A Nation In the Making 1872 - 1900 SML.ppt

The History of NZ 1870-1900.
Making of a Nation.
From the NZ Wars to Liberals,
Richard Seddon, George Grey,
Social Laboratory, New Zealand,
Confiscations, Kotahitanga, Kingitanga, Parliament, Suffrage, Repudiation, Economic Change, Agriculture, Gold Mining, Timber, Flax, Sheep, Dairying,

Leveraging Generative AI to Drive Nonprofit Innovation

In this webinar, participants learned how to utilize Generative AI to streamline operations and elevate member engagement. Amazon Web Service experts provided a customer specific use cases and dived into low/no-code tools that are quick and easy to deploy through Amazon Web Service (AWS.)

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https://app.box.com/s/tacvl9ekroe9hqupdnjruiypvm9rdaneMule event processing models | MuleSoft Mysore Meetup #47

Mule event processing models | MuleSoft Mysore Meetup #47
Event Link:- https://meetups.mulesoft.com/events/details/mulesoft-mysore-presents-mule-event-processing-models/
Agenda
● What is event processing in MuleSoft?
● Types of event processing models in Mule 4
● Distinction between the reactive, parallel, blocking & non-blocking processing
For Upcoming Meetups Join Mysore Meetup Group - https://meetups.mulesoft.com/mysore/YouTube:- youtube.com/@mulesoftmysore
Mysore WhatsApp group:- https://chat.whatsapp.com/EhqtHtCC75vCAX7gaO842N
Speaker:-
Shivani Yasaswi - https://www.linkedin.com/in/shivaniyasaswi/
Organizers:-
Shubham Chaurasia - https://www.linkedin.com/in/shubhamchaurasia1/
Giridhar Meka - https://www.linkedin.com/in/giridharmeka
Priya Shaw - https://www.linkedin.com/in/priya-shaw

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RHEOLOGY Physical pharmaceutics-II notes for B.pharm 4th sem students

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NEWSPAPERS - QUESTION 1 - REVISION POWERPOINT.pptx

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Haunted Houses by H W Longfellow for class 10

- 1. Capital and Revenue Capital Sums and Revenue Streams
- 2. Capital • A single one –off payment is Capital • That can be a payment out – we buy a new company car; or a payment in, we sell off the old company car. • One off payments are known as Capital Expenditure (often called Cap Ex for short) • Even if we pay several times, this could still be a Capital Expenditure. We have a rolling programme to replace all our office equipment after 3 years. • Even if they are regular payments, it is still, probably, Capital Expenditure
- 3. Revenue • Regular payments in or out are Revenue items. • Examples: – Paying out rent – Regular payments to contractors, e.g. cleaning contracts – Variable repeating payments, e.g. energy bills
- 4. Valuing Revenue Streams • In a previous Lecture, we considered Present and Future Values of one-off amounts, i.e. Capital sums. • This is known as discounting • We can also discount revenue streams using similar methods.
- 5. Amount of £1 per annum • Pay a lump sum into an account and let it earn interest • Use Amount of £1 or Future Value (1+i)n • What if we pay, say, £1,000 every year into an account and earn interest @, say 8%? • Use the Amount of £1 per annum or Future Value of 1 per period or Annuity Factor • Formula (1+i)n-1 i
- 6. Examples of Using the Amount of £1 pa or FV 1 per period or Annuity Factor • If I save £1,000 every year into an account giving me 5% interest; how much will I have after 10 years? • (1+i)n-1 or (Amt of £1 -1)/i i = (1+.05)10-1 = 1.62889 -1 = .62889 = 12.5778 .05 .05 .05 £1,000 * 12.5778 = £12,577.80
- 7. Present Value of £1 per annum • The reciprocal, of course, is the Present Value of £1 pa, or Year’s Purchase or Present Worth • Formula • 1 – (1/(1+i)n-1) i
- 8. The Formulae • If you are not mathematically minded, don’t worry about the formulae. • The figures have all been calculated for you on a spreadsheet available on the website. • Enter the appropriate rate per cent (the discounting rate) then look up the figure from the table
- 9. Financial Tables COMPOUND INTEREST TABLES 7PER CENT Yrs Amt of £1 (Amount to which a capital sum will accrue) PV of £1 (Present Value of a Capital Sum) Amt of £1 pa (Amount to which an income stream will accrue at a given rate) PV of £1 pa (Present Value of a income or expenditure stream) Annual Sinking Fund 1 1.070000 0.934579 1.000000 0.934579 1.000000 2 1.144900 0.873439 2.070000 1.808018 0.483092 3 1.225043 0.816298 3.214900 2.624316 0.311052 4 1.310796 0.762895 4.439943 3.387211 0.225228 5 1.402552 0.712986 5.750739 4.100197 0.173891 6 1.500730 0.666342 7.153291 4.766540 0.139796
- 10. When to use the Amount of £1 pa/Year’s Purchase/Future Worth • We can rent out that spare office floor for 5 years, until we need it again. That will give us an income of £20,000 pa. • What’s that worth as a capital sum, assume a rate of 7%? • £20,000 * PV £1pa for 5 years @ 7% • From the tables = £20,000 * 4.100197 • = £82,000 Capital Value
- 11. Annual Sinking Fund • Can calculate how much to put aside for a given number of years to meet a known future expenditure. • This is known as an Annual Sinking Fund • We are sinking money away every year for some known eventuality
- 12. ASF Example • This lift (elevator) is nearing the end of its life. It will have to be replaced in the next 10 years at a cost of £12,000. How much should we put aside every year to meet that cost when it arises? Let’s assume a return of 4% • From tables • ASF 10 years @ 4% = 0.083291 • £12,000 * 0.083291 = £999.49, • Say £1,000 per year. • NB For simplicity for these exercises, ignore the impact of tax on any interest
- 13. RECAP • For Capital Items • Present Value: What is the value today of a future sum of money? • Amount of £1: How much will a sum of money amount to after a given number of years? • For Revenue Items • Present Value of £1 pa: What is the value today of a future revenue stream? • Amount of £1 pa: If I put away so much per year for a given number of years, how much will that be worth? • Annual Sinking Fund: How much do I need to put away each year to amount to a given sum?
- 14. Thank you for your attention