A company that manufactures amplified pressure transducers is trying to decide be- tween the machines shown below. The company has a MARR of a real 4% per year, and it expects inflation to be 2% per year. Use PW analysis to determine which company the engineer should recommend. Variable Speed First cost, $ -250, 000 Annual operating cost, $/year -231, 000 Overhaul in year 3, $ Overhaul in year 4, $ Salvage value, $ Life, years -140, 000 50,000 3 Dual Speed -224, 000 -235, 000 -26, 000 10,000 6

A company that manufactures amplified pressure transducers is trying to decide be- tween the machines shown below. The company has a MARR of a real 4% per year, and it expects inflation to be 2% per year. Use PW analysis to determine which company the engineer should recommend. Variable Speed First cost, $ -250, 000 Annual operating cost, $/year -231, 000 Overhaul in year 3, $ Overhaul in year 4, $ Salvage value, $ Life, years -140, 000 50,000 3 Dual Speed -224, 000 -235, 000 -26, 000 10,000 6

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

A company that manufactures amplified pressure transducers is trying to decide be-
tween
the machines shown below. The company has a MARR of a real 4% per year, and it
expects
inflation to be 2% per year. Use PW analysis to determine which company the engineer
should
recommend.
Variable
Speed
-250, 000
First cost, $
Annual operating cost, $/year -231,000
Overhaul in year 3, $
Overhaul in year 4, $
Salvage value, $
Life, years
-140, 000
50,000
3
Dual
Speed
-224, 000
-235, 000
-26, 000
10,000
6

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