Engineering Economy (17th Edition)
17th Edition
ISBN: 9780134870069
Author: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher: PEARSON
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Question
Chapter 1, Problem 13P
a.
To determine
Two forumulations for MR’s problem.
b.
To determine
The feasible solutions for every problem formulation.
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Consider this situation faced by a first-semester senior in civil engineering who is exhausted from extensive job interviewing and penniless from excessive partying. Mary’s impulse is to accept immediately a highly attractive job offer to work in her brother’s successful manufacturing company. She would then be able to relax for a year or two, save some money, and then return to college to complete her senior year and graduate. Mary is cautious about this impulsive desire, because it may lead to no college degree at all!
a. Develop at least two formulations for Mary’s problem.
b. Identify feasible solutions for each problem formulation in Part (a). Be creative!
Consider this situation faced by a first-semester senior in mechanical engineering who is
exhausted from extensive job interviewing and penniless from excessive partying. Mary’s
impulse is to accept immediately a highly attractive job offer to work in her brother’s
successful manufacturing company. She would then be able to relax for a year or two, save
some money, and then return to college to complete her senior year and graduate. Mary is
cautious about this impulsive desire, because it may lead to no college degree at all.
Develop at least two formulations for Mary’s problem.
Identify feasible solutions for each problem formulation in (a).
After graduation, you face a choice. You can work for a multinational consulting firm and earn a starting salary (including benefits) of
$45,000, or you can start your own consulting firm using $6,000 of your own savings. If you keep your money in a savings account,
you can earn an interest rate of 5 percent. You choose to start your own consulting firm. At the end of the first year, you add up all of
your expenses and revenues. Your expenses include $14,000 for rent, $1,600 for office supplies, $22,000 for labor, and $4,900 for
telephone expenses. After operating your consulting firm for a year, your total revenues are $102,000.
Instructions: Enter your answers as a whole number.
a. What is your accounting profit?
$ 44,500 8
b. What is your economic profit?
$ 4,150
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