Annual Maintenance Cost of the testing equipment for all 10 years

1. Draw and solve the Cash Flow Diagram for Future Value “F”. This is a 10 year Cash Flow, and interest rate is a compounded 7%).

a. $5000.00 is Invested Today for a piece of testing equipment

b. $2000.00 is Earned as Annual Income from end of years 4-10 through use of this test equipment

c. $400.00 is the Annual Maintenance Cost of the testing equipment for all 10 years

d. Salvage Value at the end of the 10th year is $1500.00

e. There is an Arithmetic Gradient Income from years 6-10 with a Base Annuity of $500.00 and an Annual Gradient G of +$50.00