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5. It has been decided that whole body scanning technology will be used for airport security purposes. Two types of devices are being considered at a certain airport (only one will be selected): back scatter (B) and millimeter wave (W). The selected scanning equipment is to be used for six years. The economic decision criterion at this airport is to meet or exceed a 15% annual return on its investment. Based on the data found in Table P6-48, which scanner should be selected? Use the PW method of analysis. Which rule, Section 6.2.2, did you use in your analysis? Table for Problem 6-48 Factor Capital investment Useful life (years) Annual expenses Market value (end of useful life) $210,000 6 $31,000 in the first year and increasing $2,000 per year thereafter $21,000 W $264,000 10 $19,000 in the first year and increasing 5.7% per year thereafter $38,000

5. It has been decided that whole body scanning technology will be used for airport security purposes. Two types of devices are being considered at a certain airport (only one will be selected): back scatter (B) and millimeter wave (W). The selected scanning equipment is to be used for six years. The economic decision criterion at this airport is to meet or exceed a 15% annual return on its investment. Based on the data found in Table P6-48, which scanner should be selected? Use the PW method of analysis. Which rule, Section 6.2.2, did you use in your analysis? Table for Problem 6-48 Factor Capital investment Useful life (years) Annual expenses Market value (end of useful life) $210,000 6 $31,000 in the first year and increasing $2,000 per year thereafter $21,000 W $264,000 10 $19,000 in the first year and increasing 5.7% per year thereafter $38,000

Introductory Circuit Analysis (13th Edition)
Introductory Circuit Analysis (13th Edition)
13th Edition
ISBN:9780133923605
Author:Robert L. Boylestad
Publisher:Robert L. Boylestad
Chapter1: Introduction
Section: Chapter Questions
Problem 1P: Visit your local library (at school or home) and describe the extent to which it provides literature...
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**Problem 5: Decision Analysis for Airport Security Technology** It has been decided that whole-body scanning technology will be used for airport security purposes. Two types of devices are being considered at a certain airport (only one will be selected): back scatter (B) and millimeter wave (W). The selected scanning equipment is to be used for six years. The economic decision criterion at this airport is to meet or exceed a 15% annual return on its investment. Based on the data found in Table P6-48, which scanner should be selected? Use the Present Worth (PW) method of analysis. Which rule, Section 6.2.2, did you use in your analysis? **Table for Problem 6-48** | Factor | B | W | |---------------------------------------|----------------|----------------| | Capital investment | $210,000 | $264,000 | | Useful life (years) | 6 | 10 | | Annual expenses | $31,000 in the first year and increasing $2,000 per year thereafter | $19,000 in the first year and increasing 5.7% per year thereafter | | Market value (end of useful life) | $21,000 | $38,000 | **Explanation of the Table:** - **Capital Investment:** Initial amount required to purchase each type of scanner. - **Useful life:** The duration over which the scanner can be used. - **Annual Expenses:** Ongoing operational costs for each scanner. For scanner B, expenses increase by a fixed amount each year. For scanner W, expenses increase by a percentage each year. - **Market Value:** The estimated resale value of the scanner at the end of its useful life. To determine which scanner should be selected, analyze the data using the Present Worth (PW) method. Consider factors including initial costs, annual expenses, and resale value, ensuring the decision meets or exceeds the required 15% annual return on investment.
Transcribed Image Text:**Problem 5: Decision Analysis for Airport Security Technology** It has been decided that whole-body scanning technology will be used for airport security purposes. Two types of devices are being considered at a certain airport (only one will be selected): back scatter (B) and millimeter wave (W). The selected scanning equipment is to be used for six years. The economic decision criterion at this airport is to meet or exceed a 15% annual return on its investment. Based on the data found in Table P6-48, which scanner should be selected? Use the Present Worth (PW) method of analysis. Which rule, Section 6.2.2, did you use in your analysis? **Table for Problem 6-48** | Factor | B | W | |---------------------------------------|----------------|----------------| | Capital investment | $210,000 | $264,000 | | Useful life (years) | 6 | 10 | | Annual expenses | $31,000 in the first year and increasing $2,000 per year thereafter | $19,000 in the first year and increasing 5.7% per year thereafter | | Market value (end of useful life) | $21,000 | $38,000 | **Explanation of the Table:** - **Capital Investment:** Initial amount required to purchase each type of scanner. - **Useful life:** The duration over which the scanner can be used. - **Annual Expenses:** Ongoing operational costs for each scanner. For scanner B, expenses increase by a fixed amount each year. For scanner W, expenses increase by a percentage each year. - **Market Value:** The estimated resale value of the scanner at the end of its useful life. To determine which scanner should be selected, analyze the data using the Present Worth (PW) method. Consider factors including initial costs, annual expenses, and resale value, ensuring the decision meets or exceeds the required 15% annual return on investment.
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