2. Uniform Series Present Worth Factor

Try these first

1. 1.

   What is the purpose of the Uniform Series Present Worth Factor?

   Hint

   Think about cash flows over time.

2. 2.

   Define the USPW Factor in one sentence.

   Hint

   Recall the cash flow nature!

3. 3.

   What does the USPW Factor calculate?

   • Future value
   • Present value
   • Loan amount

   Hint

   Think about the purpose of the factor.

4. 4.

   True or False: The USPW Factor can be used to find loan repayment schedules?

   • True
   • False

   Hint

   Recall the applications we discussed.

5. 5.

   You have a uniform payment of $20,000 every year for 6 years. If the interest rate is 6%, calculate the present worth of these cash flows.

   Hint

   Use the 6% as your rate in the USPW formula.

6. 6.

   If you plan to replace equipment costing $150,000 in 5 years and expect to make annual contributions of$30,000 towards that goal, calculate how this relates to the USPW Factor.

   Hint

   Focus on using the future cash flows in the USPW context.