Carmen, a computer sales representative, feels that the odds are 13 to 8 that she will clinch the
sale of a mini-computer to a certain company. What is the (subjective) probability that Carmen
will make the sale? (Round your answer to three decimal places.) P(Sale) = 1
Solution
13 (will happen) + 8(won\'t happen) = 21 now, 13/21 = (probability she will make
the sale).
cash flows in the diagrams Parts 1 and 2Book for class is engineer.pdf
1. cash flows in the diagrams Parts 1 and 2
Book for class is engineering economic analysis by Newman The cash flows in the diagrams
below are considered to be equivalent in terms of economic desirability at an interest rate of 6%
compounded annually. Determine the unknown value A. $4000 0 1 2 3 4 5 6 789 10 $200 If the
cash flow diagram below has a present worth (at year 0) of $0 at an interest rate of 8%, calculate
the value of C S520 $440 $360 S280 4 $200 A
Solution
If the cah flows in both the diagram are equivalent in terms of economic desirabilty, it means
there would be equal total present worth of both the alternatives' cash flows.
Total PW of cash flows of Alternative 1 = Total PW of cash flows of Alternative
Lets calculate Total PW of cash flows of Alternative 1 :
Now, Consider Alternative 2:
Total PW = $2968.4 = A(P/F,6%,1) + A(P/F,6%,2) + A(P/F,6%,3) + A(P/F,6%,4) +
A(P/F,6%,5) + A(P/F,6%,6) + A(P/F,6%,7) + A(P/F,6%,8)
= A(0.9434) + A( 0.8900) + A(0.8396) + A( 0.7921) + A(0.7473) + A( 0.7050) + A(0.6651) +
A( 0.6274)
= A (0.9434+0.8900+0.8396+0.7921+ 0.7473 + 0.7050 +0.6651 +0.6274)
=A*6.2099
A = $2968.4 / 6.2099 = $478.0109.YearCash flowsInterest at 6%PW0-2001-
200100.94340200.890300.83960440000.79213168.4Total PW2968.4