How To Draw Cash Flow Diagrams

Technology Costs and Toll Estimating

Cash Flow Diagrams

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Cash menstruum diagrams visually stand for income and expenses over some time interval. The diagram consists of a horizontal line with markers at a series of time intervals. At appropriate times, expenses and costs are shown.

Note that it is customary to take cash flows during a year at the end of the year, or EOY (end-of-yr). At that place are certain cash flows for which this is not appropriate and must exist handled differently. The most common would exist rent, which is ordinarily taken at the beginning of a greenbacks catamenia. In that location are other pre-paid flows which are handled similarly.

For example, consider a truck that is going to be purchased for $55,000. Information technology will cost $nine,500 each year to operate including fuel and maintenance. Information technology will demand to accept its engine rebuilt in 6 years for a cost of $22,000 and it volition be sold at yr nine for $6,000. Here is the cash flow diagram:

Note that the initial cost, the buy cost, is recorded at the beginning of Year i, sometimes referred to as terminate-of-yr 0, or EOY 0. Also, operating and maintenance costs actually volition occur during a year, but they are recorded at EOY, and then forth.

Engineering Costs and Price Estimating

Cash Flow Diagrams

Question 1

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Question ane.

Given the cash catamenia diagram beneath, answer the questions by clicking on the correct reply. Notation that at that place are several questions; as you correctly respond each, you go to the adjacent question. (Note that these questions will take more time than previous questions did.)

1.What is the initial cost of this new motorcar?

1.A $122,000

i.B $19,500

i.C $175,000

1.D $36,000

two.What is the rebuild cost of the machine?

2.A $122,000

2.B $nineteen,500

ii.C $175,000

ii.D $36,000

3.What is the salvage value for the auto?

three.A $122,000

3.B $nineteen,500

3.C $175,000

3.D $36,000

four.In what single year is the full combined value of the automobile positive?

4.A 2

iv.B 4

4.C 6

4.D 9

Choose an selection beneath.

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