TVM Problem and

Quiz
Module 10
Chapter 3
Contemporary Engineering Economics
Copyright 2010

Contemporary Engineering Economics, 5th edition, 2010

Sample Problem

Problem 3.36: You are considering buying a piece

of industrial equipment to automate a part f your

production process. This automation will save labor
costs by as much as $35,000 per year over 10 years.
The equipment costs $200,000. Should you
purchase the equipment if your interest rate is
12%?

Contemporary Engineering Economics, 5th edition, 2010

Quiz Question

You are interested in buying a piece of real

property that could be worth $300,000 in year 10

years. Assuming that your money is worth 8%, how
much would you be willing to pay for the property?
Show the cash flow diagram, cash flow notation and
answer.

Contemporary Engineering Economics, 5th edition, 2010