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. $10000.00 is Invested Today for a piece of testing equipment
b. $6000.00 is Earned as Annual Income from end of years 4-10 through use of this test equipment
c. $600.00 is the Annual Maintenance Cost of the testing equipment for all 10 years
d. Salvage Value at the end of the 10th year is $1800.00
e. There is an Arithmetic Gradient Income from years 6-10 with a Base Annuity of $400.00 and an Annual Gradient G of +$50.00
What is the Future Value “F” of this Engineering Cash Flow Investment?
I kind of know how to draw throw cash flow diagram for this, but my real issue is how do I start to calculate the future value with a gradient involved? Do I find the future values of each instance and then add them together? If so, then how do I get the future value of the gradient and annuity?