The city of St. John's is intalling a new swimming pool in the east end recreation centre. One design being considered is a reinforced concrete pool that will cost $5,400,000 to install. Thereafter, the inner surface of the pool will need to be refinished and painted every 5 years at a cost of $440,000 per refinishing. Assuming that the pool will have essentially an infinite life, what is the present worth of the costs associated with the pool design? The city uses a MARR of 10%. If the installation costs, refinishing costs, and MARR are subject to 5% or 10% increases or decreases, how is the present worth affected? (NOTE: Text answers are case sensitive and every field in this question is worth equal value) All calculations are performed using 4 significant figures. (a) Complete the table below:

The city of St. John's is intalling a new swimming pool in the east end recreation centre. One design being considered is a reinforced concrete pool that will cost $5,400,000 to install. Thereafter, the inner surface of the pool will need to be refinished and painted every 5 years at a cost of $440,000 per refinishing. Assuming that the pool will have essentially an infinite life, what is the present worth of the costs associated with the pool design? The city uses a MARR of 10%. If the installation costs, refinishing costs, and MARR are subject to 5% or 10% increases or decreases, how is the present worth affected? (NOTE: Text answers are case sensitive and every field in this question is worth equal value) All calculations are performed using 4 significant figures. (a) Complete the table below:

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

The city of St. John's is intalling a new swimming pool in the east end recreation centre. One design being considered is a
reinforced concrete pool that will cost $5,400,000 to install. Thereafter, the inner surface of the pool will need to be refinished
and painted every 5 years at a cost of $440,000 per refinishing. Assuming that the pool will have essentially an infinite life, what
is the present worth of the costs associated with the pool design? The city uses a MARR of 10%. If the installation costs,
refinishing costs, and MARR are subject to 5% or 10% increases or decreases, how is the present worth affected? (NOTE: Text
answers are case sensitive and every field in this question is worth equal value)
All calculations are performed using 4 significant figures.
(a) Complete the table below:
Sensitivity Analysis Calculated Values
Parameter
Construction
Costs
Refinishing
Costs
MARR [%]
-10%
-5%
Base
Case
5,400,000
440,000
10
+5%
+10%

Present
worth of
Costs
Changes to
Construction
Costs
Changes to
Refinishing
Costs
Changes to
MARR
-10%
-5%
0%
6.121E6
6.121E6
6.121E6
+5%
+10%
(b) To which parameter (Construction Costs [CC], Refinishing Costs [RC], or MARR is the present worth of the project most
sensitive? {Enter either 'CC', 'RC', or 'MARR' and the answer is case sensitive}:
[1/25]

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