An international aerospace contractor has been asked by a municipal police department to estimate and analyze the life cycle costs for a proposed drone surveillance system to monitor traffic patterns and congestion within the central thoroughfares of the city. The list of items

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
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An international aerospace contractor has been asked by a municipal police department to
estimate and analyze the life cycle costs for a proposed drone surveillance system to monitor
traffic patterns and congestion within the central thoroughfares of the city. The list of items
include the following general categories: R&D costs (R&D), nonrecurring investment costs (NRI),
recurring investment costs (RI), scheduled and unscheduled maintenance costs (Maint),
equipment usage costs (Equip), and disposal costs (Disp). The costs (in $ million units) for the
20-year life cycle have been estimated. Calculate the annual LCC at an interest rate of 7% per
year.
Year
0
1
2
3
4
5
6-10
11-20
18-20
R&D NRI RI Maint Equip Disp
5.5
1.1
3.5
2.5
0.5
5.2
1.3 0.6
10.5 3.1 1.4
10.5 4.2
1.6
2.7
3.5
6.5
2.2
1.5
3.6
5.3
7.8
8.5
2.7
Transcribed Image Text:An international aerospace contractor has been asked by a municipal police department to estimate and analyze the life cycle costs for a proposed drone surveillance system to monitor traffic patterns and congestion within the central thoroughfares of the city. The list of items include the following general categories: R&D costs (R&D), nonrecurring investment costs (NRI), recurring investment costs (RI), scheduled and unscheduled maintenance costs (Maint), equipment usage costs (Equip), and disposal costs (Disp). The costs (in $ million units) for the 20-year life cycle have been estimated. Calculate the annual LCC at an interest rate of 7% per year. Year 0 1 2 3 4 5 6-10 11-20 18-20 R&D NRI RI Maint Equip Disp 5.5 1.1 3.5 2.5 0.5 5.2 1.3 0.6 10.5 3.1 1.4 10.5 4.2 1.6 2.7 3.5 6.5 2.2 1.5 3.6 5.3 7.8 8.5 2.7
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