Practice Uniform Series Sinking Fund Factor - 4.4 | 9. Uniform Series Capital Recovery Factor | Construction Engineering & Management - Vol 1
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4.4 - Uniform Series Sinking Fund Factor

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Learning

Practice Questions

Test your understanding with targeted questions related to the topic.

Question 1

Easy

What is the purpose of the sinking fund factor?

💡 Hint: Think about long-term investments.

Question 2

Easy

Explain 'future value'.

💡 Hint: It's what you wish to have in the future.

Practice 4 more questions and get performance evaluation

Interactive Quizzes

Engage in quick quizzes to reinforce what you've learned and check your comprehension.

Question 1

What is the sinking fund factor primarily used for?

  • To calculate future cash flows
  • To determine annual payments for a future sum
  • To find present value

💡 Hint: Focus on savings and future goals.

Question 2

True or False: Sinking fund factor can help in determining loan repayment schedules.

  • True
  • False

💡 Hint: Think about loan structures.

Solve 1 more question and get performance evaluation

Challenge Problems

Push your limits with challenges.

Question 1

A company plans to purchase a piece of equipment costing $30,000, expecting to sell it for $7,000 after 6 years. If the company earns an interest rate of 7%, determine how much it should save each year into a sinking fund to account for the future expected salvage amount.

💡 Hint: Subtract the salvage value from the original cost before applying calculations.

Question 2

You want to ensure you can buy a new vehicle worth $25,000 in 5 years. Assuming an interest rate of 5%, how much should you contribute annually to reach this aspiration using a sinking fund?

💡 Hint: Always remember to apply the interest rate in the formula.

Challenge and get performance evaluation