Problem 3. Two methods are under consideration for producing the case for a portable hazardous material photoionization monitor. Aplastic case will require an initial investment of $75,000 and will have an annual operating cost of $27,000 with no salvage after 2 years. An aluminum case will require an investment of $125,000 and will have annual costs of $12,000. Some of the equipment can be sold for $30,000 after its 3-year life. At an interest rate of 10% per year, which case should be used on the basis of a present worth analysis? (Ans. PWplastie =S-305,798; PWaluminum= $-231,702)
Problem 3. Two methods are under consideration for producing the case for a portable hazardous material photoionization monitor. Aplastic case will require an initial investment of $75,000 and will have an annual operating cost of $27,000 with no salvage after 2 years. An aluminum case will require an investment of $125,000 and will have annual costs of $12,000. Some of the equipment can be sold for $30,000 after its 3-year life. At an interest rate of 10% per year, which case should be used on the basis of a present worth analysis? (Ans. PWplastie =S-305,798; PWaluminum= $-231,702)
Chapter2: Loads On Structures
Section: Chapter Questions
Problem 1P
Related questions
Question
Q3a
Problem 1 & 2 are only shown since its a continuation to Problem 3. The answers to Problem 1& 2 are given for reference. Only solve Problem 3.
Please solve by hand using calculations and formulas (Not in Excel)
![Problem 1. A company is considering getting involved in electronic commerce. A modest e-commerce
package is available for $20,000. If the company wants to recover the cost in 2 years, what is the
equivalent amount of new income that must be realized every 6 months, if the interest rate is 3% per
quarter?
(Ans. $5,784)
Problem 2: The expenses of a venture is shown below. If the interest rate is 14.06% per year compounded
monthly, find the following:
Year
Cost, S
Year
Cost, S
(a) Effective annual interest rate
(b) Present worth (at year 0) [Note: you must
consider the existing gradient] (Ans. $27,303.69)
(c) Annual worth (in years 1 to 7) (Ans. $6563)
4,000
4,000
3,000
2,000
4
6,000
8,000
10,000
1
5
7
12,000
Problem 3. Two methods are under consideration for producing the case for a portable hazardous material
photoionization monitor. Aplastic case will require an initial investment of $75,000 and will have an
annual operating cost of $27,000 with no salvage after 2 years. An aluminum case will require an
investment of $125,000 and will have annual costs of $12,000. Some of the equipment can be sold for
$30,000 after its 3-year life. At an interest rate of 10% per year, which case should be used on the basis
of a present worth analysis?
(Ans. PWplastic =$-305,798; PWaluminum= $-231,702)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc5b0b1d1-ba25-488c-9f69-7cd2e60f0957%2F11dcb4fc-aaa7-4564-a9aa-a6074fb46236%2F7ik06lk_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Problem 1. A company is considering getting involved in electronic commerce. A modest e-commerce
package is available for $20,000. If the company wants to recover the cost in 2 years, what is the
equivalent amount of new income that must be realized every 6 months, if the interest rate is 3% per
quarter?
(Ans. $5,784)
Problem 2: The expenses of a venture is shown below. If the interest rate is 14.06% per year compounded
monthly, find the following:
Year
Cost, S
Year
Cost, S
(a) Effective annual interest rate
(b) Present worth (at year 0) [Note: you must
consider the existing gradient] (Ans. $27,303.69)
(c) Annual worth (in years 1 to 7) (Ans. $6563)
4,000
4,000
3,000
2,000
4
6,000
8,000
10,000
1
5
7
12,000
Problem 3. Two methods are under consideration for producing the case for a portable hazardous material
photoionization monitor. Aplastic case will require an initial investment of $75,000 and will have an
annual operating cost of $27,000 with no salvage after 2 years. An aluminum case will require an
investment of $125,000 and will have annual costs of $12,000. Some of the equipment can be sold for
$30,000 after its 3-year life. At an interest rate of 10% per year, which case should be used on the basis
of a present worth analysis?
(Ans. PWplastic =$-305,798; PWaluminum= $-231,702)
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