EMSE 4410Survey of Finance & EngineeringEconomyEvaluating a Single Project 1September 22, 2014Survey of Finance & Engineering EconomyToday’s Goals Review of some HW problems Nominal and Effective Interest Rates The Minimum Attractive Rate of Return The Present Worth Method Bond Value Capitalized-Worth Method Future and Annual Worth Methods Capital Recovery====== HW3: C
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EMSE 4410
Survey of Finance & Engineering
Economy
Evaluating a Single Project 1
September 22, 2014
Survey of Finance & Engineering Economy
Today’s Goals
Review of some HW problems
Nominal and Effective Interest Rates
The Minimum Attractive Rate of Return
The Present Worth Method
Bond Value
Capitalized-Worth Method
Future and Annual Worth Methods
Capital Recovery
======
HW3: C5 – 6, 11, 20, 24, 25, 41, 49, 60
Due: October 6, 2014
Midterm test: October 6, 2014
Survey of Finance & Engineering Economy
Review of HW1 – P13
A large company in the communication and
publish industry has quantified the relationship
between the price of one of its products and the
demand for this product as
Price=150-0.01xDemand
The fixed cost per year is $50,000 and the
variable cost per unit is $40
What is the maximum profit that can be achieved if the
maximum expected demand is 6,000 units per year?
What is the unit price at this point of optimal demand?
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