Value Engineering Homework #3 This document is provided for your convenience only. Please complete the quiz on Blackboard so that your grade is recorded. 1. (10pts) Calculate the Present Value of $1000 paid to you 5 years in the future, assuming an interest rate of 7%. a. $650 b. $713 c. $1,065 d. $1,403 2. (10pts) Calculate the Present Value of an annuity of $5,000/year for 15 years assuming an interest rate of 4%. a. $55,592 b. $63,295 c. $84,533 d. $100,118 3. (10pts) You plan to invest $5000 per year for the next 30 years in an IRA that you expect to return an average of 6% interest. How much money will you have in the account at the end of 30 years? a. $68,824 b. $218,256 c. $395,290 d. $415,367 4. (10pts) What is the Present Value of the amount you calculated in question 3? a. $68,824 b. $218,256 c. $395,290 d. $415,367 Refer to the following for Problems 5 and 6: Perform a life cycle cost analysis to select an exterior wall system on a two-story office building with a 40 year economic life, assuming a discount (interest) rate of 10%. Two alternatives are to be considered: EIFS and brick/block wall. Financing costs are not considered in this analysis. The estimated initial cost of an EIFS wall system is $390,000. This system would require major restoration work after 20 years at a cost of $100,000. With this option it is estimated that the energy costs to heat and cool the building will be $8,000/yr. The estimated initial cost of a brick veneer with CMU backup would be $425,000. Because the brick is more durable, it would only require minor restoration estimated at $10,000 after 20 1 years. Further, the increased thermal resistance would reduce energy costs to an estimated $5,000/yr. 5. (30pts) What is the estimated LCC, in present worth, for the EIFS system? a. $468,291 b. $475,382 c. $483,097 d. $489,128 6. (30pts) What is the estimated LCC, in present worth, for the brick & block system? a. $468,291 b. $475,382 c. $483,097 d. $489,128 Helpful Formulas: P= F=P ( 1+i ) n F1 ( 1+i )n A( 1+i )n1 F= i A= Fi ( 1+i )n1 P= A( 1+i ) 1 n i ( 1+i ) n A= Pi ( 1+i ) n n ( 1+i ) 1 2