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EEFC: Present Worth of Cash Flows

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The Engineering Economics Finance Company (EEFC) plans to receive $900,000 next year from a certain investment, with increases of 5% per year. If N = 5 years and the interest rate is 12%, determine the present worth of the cash flows. Show calculations.

Please provide in both Word and Excel.

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Solution Summary

This response provides the calculations for determining the present worth of cash flows for the Engineering Economics Finance Company.

Solution Preview

The formula to calculate is:

Amount / (1+i)^n , where

i = interest rate
n = term or period

The ...

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