5. Summary of Lecture

Try these first

1. 1.

   What is the purpose of the Uniform Series Capital Recovery Factor?

   Hint

   Think about loan payments on equipment.

2. 2.

   What does the Uniform Series Present Worth Factor calculate?

   Hint

   It relates to understanding how much future cash flows are worth today.

3. 3.

   What does the USCRF help you determine?

   • Annual loan repayments
   • Total equipment cost
   • Future cash flow

   Hint

   Focus on the repayment aspect of equipment finance.

4. 4.

   True or False: The USPWF allows you to find the present worth of known cash flows.

   • True
   • False

   Hint

   Think about reversing future cash to present terms.

5. 5.

   Calculate the total annual cost for a piece of equipment valued at $200,000 with a 10% interest rate and a life span of 8 years using the USCRF.

   Hint

   Remember to properly apply the formula and ensure interest is in decimal form.

6. 6.

   Determine how much you ought to invest today to achieve a future goal of $15,000 in 6 years at an interest rate of 5%.

   Hint

   Start from your future value and work backwards to present worth.