part (b) for the figure 2-3

$200 M Figure 2-2 Cash flow diagram for Example 2.2a and b. (a) To find the equivalent investment required in 3 years, apply the F/P factor. Use $1 mil- lion units and the tabulated value for 10% interest (Table 15). F3 = P(F/P,i,n) = 200(F/P,10%,3) = 200(1.3310) = $266.2 ($266,200,000) Now, use the FV function on a spreadsheet to find the same answer, F3 = $266.20 million (Refer to Figure 23, left side.) B D G 1 2 P = $200 i = 10% n = 3 F = $200 i = 10% n = 4 3 The term 4 present year ( for ing for n 5 F3 = ($266.20) + =FV(10%,3.,200) PA= ($136.60) +=PV(10%,4,200) 6 7 Figure 2-3 Spreadsheet functions for Example 2.2. P = ? 0 (b) The year 2016 is 4 years prior to the planned construction date of 2020. To determine the equy lent cost 4 years earlier, consider the $200 M in 2020 (t=0) as the future value F and apply tk P/F factor for n = 4 to find P_4. (Refer to Figure 22.) Table 15 supplies the tabulated value. D Drin-200PF 100 - 20000 6830)