A new antitheft system incorporating MEMS technology is being separately evaluated economically by three engineers at Dragon Technologies. The first cost of the equipment will be $89,000, and the life is estimated at 6 years with a salvage value of $9000. The engineers made different estimates of the net savings that the equipment might generate. Jacob made an estimate of $10,000 per year. Susan states that this is too low and estimates $14,000, while Tyler estimates $25,000 per year before tax. If the MARR is 8% per year, use PW to determine if these different estimates will change the decision to purchase the equipment. The present worth of the pessimistic estimate is $ The present worth of the most likely estimate is $ The present worth of the optimistic estimate is $

A new antitheft system incorporating MEMS technology is being separately evaluated economically by three engineers at Dragon Technologies. The first cost of the equipment will be $89,000, and the life is estimated at 6 years with a salvage value of $9000. The engineers made different estimates of the net savings that the equipment might generate. Jacob made an estimate of $10,000 per year. Susan states that this is too low and estimates $14,000, while Tyler estimates $25,000 per year before tax. If the MARR is 8% per year, use PW to determine if these different estimates will change the decision to purchase the equipment. The present worth of the pessimistic estimate is $ The present worth of the most likely estimate is $ The present worth of the optimistic estimate is $

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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A new antitheft system incorporating MEMS technology is being separately evaluated economically by three engineers at Dragon Technologies. The first cost of the equipment will be $90,000, and the life is estimated at 6 years with a salvage value of $9000. The engineers made different estimates of the net savings that the equipment might generate. Jacob made an estimate of $9,000 per year. Susan states that this is too low and estimates $18,000, while Tyler estimates $21,000 per year before tax. If the MARR is 8% per year, use PW to determine if these different estimates will change the decision to purchase the equipment. The present worth of the pessimistic estimate is $ The present worth of the most likely estimate is $ The present worth of the optimistic estimate is $ The equipment purchase by the pessimistic estimate is not justified The equipment purchase by the most likely estimate is not justified The equipment purchase by the optimistic estimate is justified
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