3.4. Inverse Factors

Try these first

1. 1.

   What does the uniform series capital recovery factor help calculate?

   Hint

   Think about what a loan repayment entails.

2. 2.

   What is the purpose of the uniform series present worth factor?

   Hint

   Consider how we reverse calculations for future payments.

3. 3.

   What does the uniform series capital recovery factor help determine?

   • Future value of an investment
   • Annual loan repayment amount
   • Current financing cost

   Hint

   It relates to managing loans and repayments.

4. 4.

   True or False: The uniform series present worth factor calculates the amount needed for future cash flows.

   • True
   • False

   Hint

   Think about reversing future goals!

5. 5.

   A company plans to receive $50,000 at the end of each year for 5 years. Calculate how much needs to be invested now at an interest rate of 7%.

   Hint

   Apply the interest rate over 5 years.

6. 6.

   An equipment cost is $150,000 and it has a useful life of 10 years with an interest rate of 8%. Determine the annual payment using the USCRF.

   Hint

   Focus on extracting the annual payment from the known equipment cost.