Shifted Series & Random Single Amounts

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Shifted Series & Random Single Amounts These cash flows require the use of multiple factors A=10,000 i=12% 0 1 2 3 4 5 6 7 6000 Example: The equivalent annual worth in yrs 1-7 for the cash flow shown below at i=12% per year is: (a) $8790 (b) $9530 (c) $10,330 (d) $11,780 Solution: The annual worth in yrs 1-7 can be found using either the A/P or A/F factors For A/P factor, find P in yr 0, then annualize with (A/P,12%,7) For A/F factor, find F in yr 7, then annualize with (A/F,12%7) Using A/F: A=[10,000(F/A,12%,6) + 6,000(F/P,12%,2)](A/F,12%,7) =[10,000(8.1152) + 6,000(1.2544)](0.09912) =$8,789.80 Answer is (a)