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Advanced engineering and economics

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Assignment3.docx Download Attachment;Industrial Economics/Advanced Engineering and Corporate Economics;Fall 2014;IEOR E4003/E4403;Prof. Soulaymane Kachani & Cyrus Mohebbi;Problem Set 3;(Due Date: December 1);1. Compute the present value of a cash flow that follows the pattern below, with 10%;interest compounded continuously.;2. Suppose a cash flow increases continuously according to the function below, from year 0;to year 20. Find the present value of this cash flow stream under continuous;compounding at r = 10%.;1;Industrial Economics/Advanced Engineering and Corporate Economics;Fall 2014;IEOR E4003/E4403;Prof. Soulaymane Kachani & Cyrus Mohebbi;3. Consider the following project balance profiles for proposed investment projects. [Note;The project balance represents the net equivalent amount of dollars committed to the;project at each point in time over the life of the project.];Project Balance (End of Year);Project;A;B;C;D;E;F;PB(i)0;PB(i)2;PB(i)3;PB(i)4;PB(i)5;-$1,000;-$1,000;-$1,000;-$1,000;-$1,000;-$1,000;i;10%;15%;12.9%;0%;20%;18%;PB(i)1;-1,000;-650;-530;-800;-1,200;-680;-900;-348;-99;-600;-1,440;-302;-690;-100;-211;-400;-1,328;-57;-359;85;-89;-200;-1,194;233;105;198;0;0;-1,000;575;Project balance figures are rounded to dollars.;a. Compute the PV of each investment.;b. Determine the cash flows for each project.;c. Identify the FV of each project.;d. What would the IRR be for projects C and D?;4. Consider the following set of investment projects.;Project;1;2;3;4;5;n: 0;-70;-200;-1,000;-260;-350;a.;b.;c.;d.;e.;1;80;100;500;1,020;-100;After-Tax Cash Flow;2;3;-50;300;150;-100;500;-1,800;1,100;800;-60;5;500;-100;1,500;-400;Compute the PV for each project. (i = 11%).;Classify each project as either simple or non-simple.;Compute the IRR for each project.;Classify each project as either pure or mixed investment.;Assuming that MARR = i = j = 11%, determine the acceptability of each project;based on the generalized IRR criterion.;5. Consider the following set of investment projects.;Project;1;2;4;After-Tax Cash Flow;n: 0;1;2;-1,000;500;840;Industrial Economics/Advanced Engineering and Corporate Economics;Fall 2014;IEOR E4003/E4403;Prof. Soulaymane Kachani & Cyrus Mohebbi;2;3;-2,000;-1,000;1,560;1,400;944;-100;Assume MARR = j = 12% in the following questions.;a. Compute the IRR for each project. If there is more than one IRR, identify all of;them.;b. Determine acceptability of each project based on the generalized IRR criterion.;3;View Full Attachment;Additional Requirements;Min Pages: 3;Level of Detail: Show all work

 

Paper#18224 | Written in 18-Jul-2015

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