Future worth

P = present worth of estimated capital cost F = future worth of estimated capital cost... 

After the first year, the future worth F of the capital cost present value P is given by... 

The future worth of the second annual payment after (n - 2) years is... 

The amount of a loan is known as the principal. The longer the period of time for which the principal is loaned, the greater the total amount of interest paid. Thus, the future worth of the money F is greater than its present worth P. The relationship between F and P depends on the type of interest used. 

Let us suppose that 100 is invested at a nominal interest rate of 5 percent. We then compute the future worth of the investment after 2 years and also compute the effective annual interest rate for the following lands of interest (I) simple, (2) annual compound, (3) monthly compound, (4) daily compound, and (5) continuous compound. The following tabulation shows the results of the calculations, along with the appropriate equation to be used ... 

Interest type Equation Future worth F Effective rate % Equation... 

Ck is in excess of Cpc by an amount which, when compounded at an annual interest rate i for n years, will have a future worth of less the salvage or scrap value S. 11 the renewal cost of the equipment remains constant at (Cp S) and the interest rate remains constant at i, then Ck is the amount of capital required to replace the equipment in perpetuity. 

In Figure 6.8 the net cash flow is shown at its value in the year in which it occurred. So the figures on the ordinate show the future worth of the project the cumulative net future worth (NFW). 

Net future worth NFW , Simple. When plotted as cash-flow diagram, shows timing of investment and income Takes no account of the time value of money... 

F Feed flowrate (kg s-1, kg h-1, kmol s-1, kmol h-1), or future worth a sum of money allowing for interest rates ( ), or... 

The symbol Fn is called the future worth of the investment after year n, that is, the future value of a current investment P based on a specific interest rate i. 

The future worth S of a series of n uniform payments each of amount P is... 

F Future value, future worth. TE Total expenses ... 

Future sum Future value Future worth Future amount Principal Present worth Present value Present amount... 

Future worth The expected value of capital in the future according to some predetermined method of computation. 

Future worth = present worth x compound interest factor S = pc or... 

Future worth x discount factor = present worth SF = P... 

The symbols S, P, and R represent discrete lump-sum payments as future worth, present principal (or present worth), and end-of-period (or end-of-year) payments, respectively. A bar above the symbol, such as S, P, or 7 , means that the payments are made continuously throughout the time period under consid-... 

If the plant is ready for operation after one year of construction time and the startup of the plant is designated as zero time, the future worth of the plant construction cost after n years with continuous interest compounding is... 

Compounding factors to give future worths for cash flows which ... 

C, = Compounding factor to give future worth for cash flows which occur in an instant at a point in time before the reference point. 

Compounding factors to give future worths for cash flows which occur uniformly before the reference point. The basis for these factors is a uniform and continuous flow of cash amounting to a total of one dollar during the given time period of T years, such as for construction of a plant. The factor converts this one dollar to the future worth at the reference time and is based on Eq. (23). 

S = future worth-amount of principal or present worth plus interest due... 

The symbol S represents the future worth of the proceeds to the project and must just equal the future worth of the initial investment compounded at an interest rate i corrected for salvage value and working capital. Thus,... 

Land value. The in-an-instant value of the land is 200,000 one year before the zero reference point of plant startup time. The land value at zero time, therefore, is the future worth of this 200,000 after one year with continuous interest compounding. Thus, by Eq. (36) of Chap. 7 or part (e) of Table 3 in Chap. 7. 

Chap. 7 or part (/) of Table 3 in Chap. 7, a future worth (5each year) oft... 

It is quite possible to compare a series of alternative investments by each of the profitability measures outlined in the early part of this chapter and find that different alternatives would be recommended depending on the evaluation technique used. If there is any question as to which method should be used for a final determination, net present worth should be chosen, as this will be the most likely to maximize the future worth of the company. 

The same methods that were explained and applied earlier in this chapter are applicable for replacement analyses. Net-present-worth and discounted-cash-flow methods give the soundest results for maximizing the overall future worth of a concern. However, for the purpose of explaining the basic principles of replacement economic analyses, the simple rate-of-retum-on-investment method of analysis is just as effective as those methods involving the time value of money. Thus, to permit the use of direct illustrations which will not detract from... 

R = end-of-year (or ordinary) annuity amount, dollars/year R = total of all ordinary annuity payments occurring regularly throughout the time period of one year, dollars/year r = nominal continuous interest rate, percent/100 5 = future worth, dollars... 

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