Energy Project Financing : Resources and Strategies for Success

208 Energy Project Financing: Resources and Strategies for Success described as a decrease in the purchasing power of money. The ...

Appendix A 209 Table A-4. The mathematics of simple interest Year Amount At Interest Earned Amount At End Beginning Of During Ye ...

210 Energy Project Financing: Resources and Strategies for Success For Simple Interest Fn = P (1+n*i) Example 3 Determine the ba ...

Appendix A 211 Table A-5. The Mathematics of Compound Interest ——————————————————————————————————————— Year Amount At Interest E ...

212 Energy Project Financing: Resources and Strategies for Success lars ([$100+$8]*0.08 = $8.64). The balance at the end of year ...

Appendix A 213 amount, i is an interest rate (expressed as a percentage amount), and n de- notes a number of years. The factor ( ...

214 Energy Project Financing: Resources and Strategies for Success P = Fn * (1 + i)–n P = F 5 * (P|F,i,n) P = 1000 * (P|F,8%,5) ...

Appendix A 215 For the $500 deposit n = 4, for the $600 deposit n = 8 P = 500 (P|F,6%,4) + 600 (P|F,6%,8) P = 500 (0.7921) + ...

216 Energy Project Financing: Resources and Strategies for Success a uniform series of cash flows. When dealing with uniform ser ...

Appendix A 217 A = $1811.70 Factors are also available for the relationships between a future worth (accumulated amount) and a u ...

218 Energy Project Financing: Resources and Strategies for Success Figure A-4. Combined uniform series and gradient series cash ...

Appendix A 219 uniform series of the same length. Equivalence in this context means that the present value (P) calculated from t ...

220 Energy Project Financing: Resources and Strategies for Success Table A-6 Summary of discrete compounding time value of money ...

Appendix A 221 Question: Are the following two cash flows equivalent at 15%/yr? Cash Flow 1: Receive $1,322.50 two years from to ...

222 Energy Project Financing: Resources and Strategies for Success The concept of equivalence can be used to break a large, comp ...

Appendix A 223 Figure A-6 An investment opportunity A.7 PROJECT MEASURES OF WORTH A.7.1 Introduction In this section measures of ...

224 Energy Project Financing: Resources and Strategies for Success What value would you expect if we calculated the present wort ...

Appendix A 225 Decision Rule: If PW ≥0, then the investment is attractive. Example 13 Installing thermal windows on a small offi ...

226 Energy Project Financing: Resources and Strategies for Success Decision: PW≥0 ($1530.07≥0.0); therefore, the window investme ...

Appendix A 227 ence of the decision maker. The concept of annual worth as a measure of investment worth can be generalized as fo ...