A highway bridge is being considered for replacement. The new bridge would cost $X and would last for 20 years. Annual maintenance costs for the new bridge are estimated to be $27,000. People will be charged a toll of $0.23 per car to use the new bridge. Annual car traffic is estimated at 360,000 cars. The cost of collecting the toll consists of annual salaries for five collectors at $9,000 per collector. The existing bridge can be refurbished for $1,900,000 and would need to be replaced in 20 years. There would be additional refurbishing costs of $70,000 every five years and regular annual maintenance costs of $17,000 for the existing bridge. There would be no toll to use the refurbished bridge. If MARR is 10% per year, what is the maximum acceptable cost (X) of the new bridge? E Click the icon to view the interest and annuity table for discrete compounding when the MARR is 10% per year. ... Choose the correct answer below. O A. The maximum acceptable cost of the new bridge is $1,518,958. O B. The maximum acceptable cost of the new bridge is $2,223,884. OC. The maximum acceptable cost of the new bridge is $2,606,996.

A highway bridge is being considered for replacement. The new bridge would cost $X and would last for 20 years. Annual maintenance costs for the new bridge are estimated to be $27,000. People will be charged a toll of $0.23 per car to use the new bridge. Annual car traffic is estimated at 360,000 cars. The cost of collecting the toll consists of annual salaries for five collectors at $9,000 per collector. The existing bridge can be refurbished for $1,900,000 and would need to be replaced in 20 years. There would be additional refurbishing costs of $70,000 every five years and regular annual maintenance costs of $17,000 for the existing bridge. There would be no toll to use the refurbished bridge. If MARR is 10% per year, what is the maximum acceptable cost (X) of the new bridge? E Click the icon to view the interest and annuity table for discrete compounding when the MARR is 10% per year. ... Choose the correct answer below. O A. The maximum acceptable cost of the new bridge is $1,518,958. O B. The maximum acceptable cost of the new bridge is $2,223,884. OC. The maximum acceptable cost of the new bridge is $2,606,996.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The Industrial Engineering at Shocker Communications has devised one alternative method involving new tooling for a job being machined in the shop. Data on the present and proposed method are shown in the table below. What production quantity would be required for the alternative method to be more economical? Assume the base pay rate is $10.0 per hour. The estimated production quantity is 15040 per year. The fixtures are capitalized and depreciated in 4 years. Round your answer to the closest integer. Method Standard Time (min) Fixture Cost Tool Cost Average Tool Life Present 10,000 0.856 0 $6 Method pieces 32845 Alternative 0.791 $930 $20 pieces
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The following data applies for example problems 8.1 through 8.3. A company is considering the purchase of either machine A or machine B. machine A machine B initial cost $80,000 20 years $20,000 $18,000 per year $100,000 25 years $25,000 $15,000 per year for the first 15 years $20,000 per year for the next 10 years estimated life salvage value other costs The interest rate is 10%, and all cash flows may be treated as end-of-year cash flows. Assume that equivalent annual cost is the value of the constant annuity equal to the total cost of a project. The equivalent annual cost of machine B is most nearly (A) $21,000 (B) $21,500 (C) $23,000 (D) $26,500
Question 4 Consider a proposal to enhance production of tortillas en a taqueria. The new machine is estimated to cost $30 million and will incur an additional $1 million per year in maintenance costs. The machine will produce annual savings of $6 million each year. The Minimum acceptable rate of return (MARR) is 11% per year, and the study period is five years at which time the machine will be obsolete (worthless). What is the maximum (minimum) value of maintenance cost that reverse your decision? Write 4 decimals
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A man is considering putting up his own enterprise, where an investment of 800,000 will be required and will take 15 years to recoup. He estimates his annual sales at 800,000 along with the following operating costs. Materials =160,000/ yearLabor = 280,000/ yearOverhead = (40,000 + 10% of sales)/ yearSelling Expense = 60,000/ yearThe man will give up his regular job paying 216,000 Php per year and devote all his time to the operation of his business, this will result in decreasing his labor cost by 40,000 per year, material cost by 28,000 per year and overhead cost by 32,000 per year. If the man expects to earn at least 20% of his capital, should he invest? Solve using a) Rate of return method b) annual worth method c)present worth method d)equivalent uniform annual cost method
The city of Oakmont is interested in developing some lake front property into a sports park (picnic facilities, boat docks, swimming area, etc.). A consultant has estimated that the city would need to invest $3 million in this project. In return, the developed property would return $500,000 per year to the city through increased tax revenues and recreational benefits to the public. What would the life of this project need to be in order to be cost-beneficial to the city? The interest rate on municipal bonds is 4% per year. E Click the icon to view the interest and annuity table for discrete compounding when i= 4% per year. The life of the project needs to be at least years in order to be cost-beneficial to the city. (Round up to the nearest whole number.)
Question 3 Consider a proposal to enhance production of tortillas en a taqueria. The new machine is estimated to cost $33 million and will incur an additional $1.5 million per year in maintenance costs. The machine will produce annual savings of $4.5 million each year. The Minimum acceptable rate of return (MARR) is 8.5% per year, and the study period is five years at which time the machine will be obsolete (worthless). What is the maximum (minimum) percentage of initial investmet change that reverse your decision?