Engineering Finance
Computation
Tools

We provide a variety of stand alone tools for assisting computation in the lessons. Individual tools as well as a toolbox of several tools are presented in a colored field with the hammer or tool icon on the left. Clicking the icon opens a window showing the tool. The toolbox is illustrated below. This sections discusses each of the individual tools.

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Toolbox
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Use the tools provided for calculations on homework exercises. They may not be available for examinations.

Division

Factor Tables

The traditional way to evaluate equivalence factors is through tables. A single table holds the factors for a specified interest rate for a collection of time intervals. The figure below shows an example of the 10% table. To look up a factor value for a given number of periods n, choose the row for that value of n and the column for the desired factor. The factor value is at the intersection of the row and column. For example, the value of (P/F, 0.1, 10) is read as 0.3855.

Click on the tool icon to open a table of interest rates. Clicking on a rate will open a PDF document with table for that interest rate.

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Factor Tables
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Calculator

A standard calculator prepared in Flash was downloaded from the web. The author is shown on the display.

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Calculator
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Factor Calculator

This calculator computes equivalency factors for arbitrary parameters. This calculator is very handy for simple problems. Enter the interest rate and the time interval in the data fields and click on a factor button to perform the computation. The multiplier data field is available for simple problems requiring multiplication of the factor by a constant. The calculator is programmed with Flash and is interactive.

Click on the tool icon to open the factor calculator.

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Factor Calculator
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Cash Flow Calculator

This calculator computes the present worth, uniform worth and future worth for problems that have no more than 10 periods. Individual cash flow amounts must be integers between -99 and +99. Period entries must be positive integers. Enter the cash flow and press the enter button. The calculator is programmed in Flash.

Click on the tool icon to open the cash flow calculator.

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Cash Flow Calculator
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Project Calculator

The inputs to the Project Calculator are the separate components of a complicated cash flow. Components may be single payments, uniform series and gradient series. Up to ten components may be entered. Cash flow amounts are any positive or negative numbers. The project life (duration) is an integer. The MARR is an integer percentage. For a single payment, the start field tells when the payment occurs. For a uniform series payment, the start field indicates when the first payment occurs, and the end field indicates when the last payment occurs. For the gradient series, the start field indicates when the first nonzero payment occurs and the end field indicates when the last payment occurs. Note that this is a little different than the gradient series described in the equivalency lesson.

The calculator is programmed in Flash and it takes a little while to download and open. Click on the tool icon to open the project calculator.

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Project Calculator
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Normal Cumulative

To compute probabilities of random variables with Normal distributions it is useful to have a table of the Standard Normal Cumulative distribution. Click the icon to open a window with a table.

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Standard Normal Cumulative
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Normal Cumulative

To compute a number for which the cumulative distribution has a specific value use the Standard Normal Inverse table.

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Standard Normal Inverse
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Random Numbers

For exercises involving simulation, it is handy to have a Random Number table.

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Random Numbers
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Division

 

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Engineering Finance
by Paul A. Jensen
Copyright 2005 - All rights reserved

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