CEE 5110 Lecture Notes - Lecture 8: Cash Flow, Real Interest Rate, United States Dollar

• School: Temple University
• Department: Civil Engineering
• Course: CEE 5110
• Professor: Dr.Mille

Document Summary

Lecture 8: price changes and exchange rates: the objective of chapter 8 is to present how inflation/deflation is dealt with in engineering economy studies, our assumption of constant prices for goods and services is generally not the case. The rate of change can be found, in either case, from the formula below: the oil refinery business has been in the news a lot. 8-1): it is important to use the correct dollar-type/interest-type combination. 8-7: foreign exchange rates can alter purchasing power, and should be considered in analyses of multiple world economies with varying economic circumstances. As exchange rates vary, the value of goods in a particular currency will fluctuate. The rate is analogous to changes in the general inflation rate: the currency of the country of albatross, the grickle, is devalued against the u. s. dollar by 8% per year. The rate of return on an investment relative to the grickle in albatross is 12%.