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Industrial Engineering
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Feb 20, 2024
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ENGINEERING ECONOMIC ANALYSIS EGR 3713 Assignment 3, Due on Thursday 3-2-2023
DRAW ALL CASH FLOW DIAGRAMS
Interest rate for all questions below is 5% per year
1.
Compare the following 2 altrernatives using the Net Equivalent Uniform Annual Worth method (variable input – variable output problem). Alt.
Construction cost $
Benefits $/yr
Service Life (yrs)
A
1,450,000
480,000
9
B
1,600,000
510,000
11
Net means (Benefits –Costs) 2.
Compare the following 2 altrernatives using the of Equivalent Uniform Annual Worth metod (fixed output problem)
Alt.
Cost $
Service Life (yrs)
A
34,000,000
40 B
38,000,000
Infinite 3.
Compare the following 2 altrernatives using the Benefit/Cost Ratio method in terms of
either
the Net
Equivalent Uniform Annual Worth metod or the present worth method
. Note: for the present worth method, the analysis period must be the same for both alternatives (i.e., 14 yrs).
4.
Solve problem 3 above using the of Benefit/Cost Ratio method in terms of Equivalent Uniform Annual
benefits and costs. 5.
Compare the following 3 altrernatives using the Incremental Benefit/Cost Ratio method
Alt. Construction cost $
Benefit ($/yr)
Service Life (yrs)
Alt.
Construction cost $
Benefits $/yr
Salvage $
Service Life (yrs)
A
1,450,000
580,000
100,000
7
B
1,600,000
610,000
200,000
14
A
365,000
100,000
8
B
400,000
120,000
9
C
800,000
140,000
10
6.
Compare the following 3 altrernatives using the Incremental Benefit/Cost Ratio method. Consider the salvage value as a cost (i.e., put in denominator). Alt. Construction cost $
Bnefit ($/yr)
Salvage $
Service Life (yrs)
A
365,000
100,000
45,000
7
B
400,000
120,000
-23,500
7
C
800,000
140,000
75,000
8
7.
Find the present worth (t=0) of the following stream of payements using Excel: Year
Payment $
1
235,540
2
123,000
3
0
4
-25,000
5
255,600
6
312,457
7
-218,678
8
312,456
9
134,435
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