Tutorial 2 Time Value of Money SEEM 2510 Management Principles for Engineering Managers II SEEM 2510 Management Principles for Engineering Managers II Tutorial 2

SEEM 2510 Management Principles for Engineering Managers II Tutorial 2 Economic Equivalence Each cash flow can be converted to any equivalent value at any point of time Judge on any project value by turning all cash flow at a common point in time SEEM 2510 Management Principles for Engineering Managers II Tutorial 2

SEEM 2510 Management Principles for Engineering Managers II Tutorial 2 Interest Formulas SEEM 2510 Management Principles for Engineering Managers II Tutorial 2

SEEM 2510 Management Principles for Engineering Managers II Tutorial 2 Cash flow diagrams 1. Identify the problem carefully 2. Draw a cash flow diagram 3. Decompose the cash flow diagram such that it can be solved by some of the previous equations SEEM 2510 Management Principles for Engineering Managers II Tutorial 2

SEEM 2510 Management Principles for Engineering Managers II Tutorial 2

SEEM 2510 Management Principles for Engineering Managers II Tutorial 2

SEEM 2510 Management Principles for Engineering Managers II Tutorial 2

SEEM 2510 Management Principles for Engineering Managers II Tutorial 2 Reference Chan S. Park, Fundamentals of Engineering Economics. 2nd Edition. Prentice Hall, 2008 SEEM 2510 Management Principles for Engineering Managers II Tutorial 2