Question 5 Costs for maintenance of buildings at an industrial complex are expected to be $1,000 in year three, $1,200 in year four and amounts increasing by $200 per year thereafter through year nine. At an interest rate of 10% per year, what is the present worth of the cash flow?   Question 6 You wish to make an investment of $3,000 today, which will become $5,000 at an interest rate if 12%

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A:

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Cash Flow in Engineering Economics (Interest and Equivalence)

The cash flows of a firm are of two categories such as cash inflows and cash outflows. Cash inflow is the money or income entering a firm during a specific period whereas cash outflow is the money exiting a firm during a specific period in the form of the expenses incurred by the firm. In other words, we can say that cash flow is a series of expenses and credits that run over the project over the lifetime it existed whereas cash inflows are all the income and gains the company earns as a result of its operations.