Mechanical Engineering Problems and Solutions, 6th Edition
With this guide, you'll hone your problem-solving skills as well as your understanding of both fundamental and more difficult topics for the Professional Engineering exam.
TABLE OF CONTENTS Mechanical Engineering Problems and Solutions, 6th Edition
CASH FLOW
A cash flow table shows the "money consequences" of a situation and its timing. For example, a simple problem might be to list the year-by-year consequences of purchasing and owning a used car:
This same cash flow may be represented graphically, as shown in Fig. A.1. The upwar arrow represents a receipt of money, and the downward arrows represent disbursements. The horizontal axis represents the passage of time.
Figure A-1
Example 1
In January, 1993 a firm purchased a used typewriter for $500. Repairs cost nothing in 1993 or 1994. Repairs are $85 in 1995, $130 in 1996, and $140 in 1997. The machine is sold in 1997 for $300. Compute the cash flow table.
Solution
Unless otherwise stated, the customary assumption is a beginning-of-year purchase, followed by end-of-year receipts or disbursement, and an end-of-year resale or salvage value. Thus the typewriter repairs and the typewriter sale are assumed to occur at the end of the year. Letting a minus sign represent a disbursement of money, and a plus sign a receipt of money, we are able to set up the cash flow table:
| Year | Cash Flow |
|---|---|
| Beginning of 1993 | ?$500 |
| End of 1993 | 0 |
| End of 1994 | 0 |
| End of 1995 | ?85 |
| End of 1996 | ?130 |
| End of 1997 | +160 |
Notice that at the end of 1997 the cash flow table shows +160 which is the net sum of ?140 and +300. If we define Year 0 as the beginning of 1993, the...
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