Question 4Concrete incorporated owns a concrete block factory and is considering adding a new productionline which costs $200,000 (including the installation costs) and has a useful life of 15 years, theline has a salvage value of $40,000. Concrete incorporated estimates that this expansion wouldlead to an increase in revenues of $44,000 starting at the end of first year and decreasing at rateof 2% per year due to decrease in the machine's productive capacity while the O & M would cost$10,000 per year increasing at rate of 5% per year. Assume that the production line would beinstalled and functional on the purchase day and the company's MARR is 12%, should thecompany undertake this expansion? And why?Hint: use geometric gradient formula1-1+g" * 1+i-where i+gP= A*i-gNP= A wherei=g1+i

Answered: Question 4 Concrete incorporated owns a…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Describe the process of determining the equivalent annual worth of the project and the unit profit per production?
ENGINEERING ECONOMY RATE WILL BE GIVEN. WRITE THE COMPLETE SOLUTIONS/EXPLANATION LEGIBLY OR TYPEWRITTEN. GIVE STRAIGHT TO THE POINT EXPLANATION. Your company presently uses a crew of its own employees for all major maintenance. On average, 44 major repairs are performed each year at 20 lost production hours per repair. Keeping the crew costs $1,300,000 per year plus any lost production cost. Lost production costs are estimated at $2,500 per hour. Your company is considering replacing its in-house maintenance work with an outside company (Ajax) working under an annual maintenance contract. This proposal will pay Ajax $2,180,000 per year but your company will still have to pay for all lost production time. Ajax claims that the time per repair will decrease because of the contractors’ substantial maintenance experience. Assuming the number of major repairs and the cost of lost production time remain the same, how much time per repair is the maximum allowable for Ajax to be the…
Mary, a project manager for ABC Ic., is reviewing a product quality improvement project. She has determined that the project's Annual Worth of $3,396. for a period of 8 years. She now has to calculate the IRR for the project but unfortunately she has lost some information about the cash flows. She knows only that the project has: a 8-year project life with an initial cost of $400,000. a set of equal revenue cash flows occurred at the end of each year for 8 years, and • MARR used for calculation the Annual Worth was 8%. Find the annual revenue first and then calculate the IRR for the project = ? O 14% < IRR (i*) < 15% O 13% < IRR (i*) < 14% O 10% < IRR (i*) < 11% O 9% < IRR (i*) < 10% O 8% < IRR (i*) < 9%
A steam generation system at a biomass-fueled power plant uses an electrostaticprecipitator (ESP) to clean its gaseous effluents. The power plant has consistently made use ofthe same type of ESP over the past several years. The installed cost of a new ESP has beenrelatively constant at $100,000. Records of operation and maintenance expenses indicate thefollowing average expenses per year as a function of the age of the ESP. The MVs of the ESP arealso reasonably well known as a function of age. Data graph in image attached. Determine the best time to replace the ESP if the MARR is 15% per year.
An integrated, combined cycle power plant produces 280 MW of electricity by gasifying coal. The capital investment for the plant is $690 million, spread evenly over two years. The operating life of the plant is expected to be 17 years. Additionally, the plant will operate at full capacity 78% of the time (downtime is 22% of any given year). The MARR is 5% per year. a. If this plant will make a profit of three cents per kilowatt-hour of electricity sold to the power grid, what is the simple payback period of the plant? Is it a low-risk venture? b. What is the IRR for the plant? Is it profitable? O
17) A professional photographer who specializes in wedding-related activities paid $24,800 for equipment that has a $2,000 estimated salvage value after five years. He estimates that his operating costs associated with hosting an event amount to $50 per day. If he charges $300 per day for his services, how many days (rounded up to the next integer) per year must he be employed in order to break even at an interest rate of 10% per year? (*
Ans is $ 7.322 please correct me
H3
2.55 HGT Oil expects receipts from a fracked well to decline according to an arithmetic gradient of $50,000 per year. If this year's receipts are ex- pected to be $280,000 (i.e., end of year 1) and the company expects the useful life of the well to be 5 years, (a) what is the amount of the cash flow in year 3, and (b) what is the equivalent uniform an- nual worth in years 1 through 5 of the income from the well at an interest rate of 12% per year? 56. For the cash flow rewve nues shown hal Si
If the profit function for selling smart phone screen magnifier is -4500p2 + 561500p – 11898000, what is the maximum profit that can be expected from selling smart phone screen magnifiers? Question 1 options: $ 0, no profit $ 5,617,681 $ 1,717,764 -$ 8,004,171
3) Find the rate of return (IRR-Ch16.3) on a project that will cost $100,000 today and $400,000 in 3 years from today, BUT will return $50,000 at the end of every year for 11 years (4)
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