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MIT engineering economics
·
Module 2
Financial Mathematics and Cash Flow Modeling
1
Time Value of Money in Project Evaluation
Explain the time value of money and its implications for project evaluation.
Cash Flow Diagram Fundamentals
Construct cash flow diagrams for engineering projects, identifying inflows, outflows, and timing.
Simple and Compound Interest Calculations
Calculate simple and compound interest for various time periods and principal amounts.
4
Nominal vs. Effective Interest Rates: Understanding Compounding
Convert between nominal and effective annual interest rates to account for compounding frequency.
5
Understanding MARR: Your Project Acceptance Threshold
Define the Minimum Acceptable Rate of Return (MARR) and explain its role in project acceptance.
6
Present Value of a Single Future Cash Flow
Calculate the present value of a single future cash flow.
7
Future Value of a Lump Sum
Calculate the future value of a single present cash flow.
8
Estimating Doubling Time with the Rule of 72
Apply the rule of 72 to estimate the doubling time for an investment.
Previous module
Economic Foundations for Engineering Decisions
Next module
Evaluating Cash Flow Series