Required information In order to provide drinking water as part of its 50-year plan, a west coast city is considering constructing a pipeline for importing water from a nearby community that has a plentiful supply of brackish ground water. A full-sized pipeline can be constructed at a cost of $105 million now. Alternatively, a smaller pipeline can be constructed now for $85 million and enlarged 20 years from now for another $90 million. The pumping cost will be $25,000 per year higher for the smaller pipeline during the first 20 years, but it will be approximately the same thereafter. Both pipelines are expected to have the same useful life with no salvage value. At an interest rate of 10% per year, which alternative is more economical? The present worth of the full-sized pipeline is determined to be $[ The small pipeline is the most economical pipeline. and that of the small-sized pipeline is $

Required information In order to provide drinking water as part of its 50-year plan, a west coast city is considering constructing a pipeline for importing water from a nearby community that has a plentiful supply of brackish ground water. A full-sized pipeline can be constructed at a cost of $105 million now. Alternatively, a smaller pipeline can be constructed now for $85 million and enlarged 20 years from now for another $90 million. The pumping cost will be $25,000 per year higher for the smaller pipeline during the first 20 years, but it will be approximately the same thereafter. Both pipelines are expected to have the same useful life with no salvage value. At an interest rate of 10% per year, which alternative is more economical? The present worth of the full-sized pipeline is determined to be $[ The small pipeline is the most economical pipeline. and that of the small-sized pipeline 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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Waller County is planning to construct a Dam some tens of miles away from the Hempstead Recreation center to facilitate fishing in the El Manny River Basin and Power Generation. The first cost for the Dam will amount to $6,500,000. Annual maintenance and repairs will amount to $24,000 for the first four years, to $28,000 for each year in the next eight years, and to $32,000 per year for the next four years. At the end of the 16th year, $25,000 is estimated to be deposited into Waller county account as tax credits earned for its environmental compliance in the construction and operation of the Dam. In addition a major overhaul costing $650,000 will be required at the end of the seventh year. Use an interest rate of 10% and : a) Determine the engineering economy symbols and their value for each option. b) Construct the cash flow diagram c) Calculate the Capital Recovery for the project
Concurris Prototyping is committed to using the newest and finest equipment in its labs. Accordingly, Wilma, a senior engineer, has recommended that a 2-year-old piece of precision measurement equipment be replaced immediately. She believes it can be demonstrated that the proposed equipment is economically advantageous at a 15%-per year return and a planning horizon of 5 years. Perform the replacement analysis using the annual worth method, a 5-year study period, and the estimates below. Was Wilma correct Equipment Current Proposed Original purchase price, $ Current market value, $ -30,000 -42,000 15,000 Remaining life, years 5 15 Estimated value in 5 years, $ 7,000 10,000 5,000 -3,000 Salvage value after 15 years, $ AOC, $ per year The AW of the defender is $- Wilma (Click to select) correct. -14,000 and the AW of the challenger is $-
Please solve the problem and draw a diagram for the problem, Make sure you post pictures of your work instead of writing it. Please! Thank you for your help.
Avian Air Cargo is considering an investment of $10,000,000 with life expectancy of 10 years and annual operating cost of $400,000 in Year 1 with an $50,000 per year starting in Year 2 through the life of the project. Avian Air Cargo anticipates a revenue stream of $2,500,000 per year for 20 years I 12%, what is the rate of return for this project and is it economically justified? It is NOT economically justified because the rate of return is between 14% and 15%. It IS economically justified because the rate of return is between 10% and 11%. It is NOT economically justified because the rate of return is between 10% and 11%. It IS economically justified because the rate of return is between 14% and 15% of MARR
Your firm is thinking about investing $300,000 in the overhaul of a manufacturing cell in a lean environment. Revenues are expected to be $39,000 in year one and then increasing by $13,000 more each year thereafter, Relevant expenses will be $20,000 in year one and will increase by $10,000 per year until the end of the cell's nine-year life. Salvage recovery at the end of year nine is estimated to be $10,000. What is the annual equivalent worth of the manufacturing cell if the MARR is 10% per year? How sensitive is the annual worth to ± 10% changes in the MARR? Are changes in the MARR really a significant consideration in this problem? Click the icon to view the interest and annuity table for discrete compounding when the MARR is 9% per year. E Click the icon to view the interest and annuity table for discrete compounding when the MARR is 10% per year. Click the icon to view the interest and annuity table for discrete compounding when the MARR is 11% per year. Find Annual Equivalent…
Problem 03.013- Annual worth calculations What is the equivalent annual cost in years 1 through 9.00 of a contract that has a first cost of $77,000 in year 0 and annual costs of $17,000 in years 3 through 9.00? Use an interest rate of 15.00% per year. (Round the final answer to three decimal places.) The equivalent annual cost is determined to be $ I
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The city's Public Works Department must decide between two water purification systems. The cost of system 1 is known and is provided in the table. The cost of chemicals for system 2 is unknown. System 2 uses chemicals at a rate of 58400 pounds per year. At what price (dollars per pound) of chemicals for system 2 are the two options equivalent? Interest rate is 6%, and the analysis period is 20 years. Solve using annual cash flow analysis. Initial cost Annual Chemical Cost Lifetime (years) Part 1 System 1 322000 45000 20 Sysetm 2 539000 Unknown 20 At what price (dollars per pound) of chemicals for system 2 are the two options equivalent? number (rtol-0.01, atol=0.02) 27