Chapter 3

Question 1

Types of cash flows?

Answer 1

1- single cash flow.
2- uniform series.
3- linear gradient series.
4- geometric gradient series.
5- irregular series.

Question 2

1- single cash flow?

Answer 2

The simplest case involves the equivalence of a single present amount and its future worth.
Deal with only two amounts: single present amount and its equivalent future worth.

Question 3

2- equal, uniform series?

Answer 3

Includes transactions arranged as a series of equal cash flows at regular intervals, known as an equal payment series or uniform series.
Deals with p,f,a
A is the constant amount of the cash flows in the series.

Question 4

3- linear gradient series?

Answer 4

A common pattern of variation occurs when each cash flow in a series increases or decreases by a fixed amount.
It’s called linear gradient because its cash flow diagram produces an ascending or descending straight line.
P,F, A, and G

Question 5

4- Geometric gradient series?

Answer 5

Series in the cash flow is determined not by fixed amount but by fixed rate expressed as a percentage.
Curving gradient in the diagram.
A,P,F, and g

Question 6

5- irregular mixed series?

Answer 6

Doesn’t exhibit a regular pattern

Question 7

Single payment factors

Answer 7

F,n,p,i
Single payment compound amount factor (SPCAF) is F/P which means find F given P.
Single payment present worth (SPPWF) is P/F means find P given F.

Question 8

Equal payment uniform series

Answer 8

Uniform series present worth factor (USPWF) its P/A which means find present given annual or A/P means find annual given present
We can solve using superposition theory which means each value return to present alone an dthen add them together but its harder way.

Question 9

Uniform series compound amount

Answer 9

Sinking fund factor A/F find annual given future or the opposite F/A find future given annual.

Question 10

Arithmetic gradient series

Answer 10

Cash flow series that either increases or decreases by a constant amount.
Income, receipts, +
Outcome, disbursement -
The amount of increase or decrease is the gradient G
Base amount is the first amount without adding or subtracting from it.

Question 11

Strict linear gradient series

Answer 11

Has the origin at the end of the first period with a zero value
Year 1 = zero dollars.
Year 2= G
Year 3= 2G
G>0 increasing
G<0 decreasing

Question 12

Arithmetic linear gradient series analysis
Three factors will be considered in arithmetic gradient strict series?

Answer 12

• P/G factor, find present given gradient: Colbert gradient without the base amount
  احنا بنقسمه قسمين لنوجد p، قسم p gradient وقسم p annual وبنجمعها مع بعض
• A/G factor, find annual given gradient. Uniform
  We find p first then A from P
• F/G factor, find future given gradient.
  We find p or A then F

Question 13

Geometric gradient series?

Answer 13

Cash flow increases or decreases from period to period by a constant percentage. %
Uniform rate of change defines a geometric gradient series of cash flows.
g is the constant rate of change by which amounts increase or decrease from one period to the next.
P = A1 (p/A,g,i,n)
There are two equations one if I=g and one if I doesn’t equal g
Inc or decrease in a curve not straight line.