Contemporary Engineering Economics (6th Edition)
6th Edition
ISBN: 9780134105598
Author: Chan S. Park
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 10, Problem 14P
(a):
To determine
Calculate the present wroth.
(b):
To determine
Calculate the
(c):
To determine
Acceptability of the project.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
A specialty concrete mixer used in construction was purchased for $300,000 7 years ago. Its annual O&M costs are $105,000. At the end of the 8-year planning horizon, the mixer will have a salvage value of $5,000. If the mixer is replaced, a new mixer will require an initial investment of $375,000 and at the end of the 8-year planning horizon, the new mixer will have a salvage value of $45,000. Its annual O&M cost will be only $40,000 due to newer technology. Use an EUAC measure and a MARR of 15% to see if the concrete mixer should be replaced if the old mixer is sold for its market value of $65,000. Solve, a. Use the cash flow approach (insider’s viewpoint approach). b. Use the opportunity cost approach (outsider’s view point approach).
Two types
of
power converters are under consideration for a specific application. An
economic comparison is to be made using a MARR of 20% and the following cost
estimates: Please Show your work
Description
Service life
First cost
Alt1 (Alpha)
Alt2. (Beta)
7
11
$12,000
$22,000
0
$7,000
Annual operating cost
$2,500
$1,200
Salvage value
(a) Compute the equivalent annual costs of each alternative and recommend the
economically superior alternative.
(b) Determine a salvage value for the Beta system such that the Beta system will have an
equivalent uniform annual cost equal to the Alpha system.
Evaluate to total present worth of all the cash-flow of machine ABC for an interest rate of 10% per year. Relevant costs are as follows
investment cost = $18,000
useful life = 20 years
Market value = $5000
Annual operating expenses =$250
Overhead cost end of the 7th year = $500
Overhead cost end of the 14th year = $800
Chapter 10 Solutions
Contemporary Engineering Economics (6th Edition)
Ch. 10 - Prob. 1PCh. 10 - Prob. 2PCh. 10 - Prob. 3PCh. 10 - Prob. 4PCh. 10 - Prob. 5PCh. 10 - Prob. 6PCh. 10 - Prob. 7PCh. 10 - Prob. 8PCh. 10 - Prob. 9PCh. 10 - Prob. 10P
Ch. 10 - Prob. 11PCh. 10 - Prob. 12PCh. 10 - Prob. 13PCh. 10 - Prob. 14PCh. 10 - Prob. 15PCh. 10 - Prob. 16PCh. 10 - Prob. 17PCh. 10 - Prob. 18PCh. 10 - Prob. 19PCh. 10 - Prob. 20PCh. 10 - Prob. 21PCh. 10 - Prob. 22PCh. 10 - Prob. 23PCh. 10 - Prob. 24PCh. 10 - Prob. 25PCh. 10 - Prob. 26PCh. 10 - Prob. 27PCh. 10 - Prob. 28PCh. 10 - Prob. 29PCh. 10 - Prob. 30PCh. 10 - Prob. 31PCh. 10 - Prob. 32PCh. 10 - Prob. 33PCh. 10 - Prob. 34PCh. 10 - Prob. 35PCh. 10 - Prob. 36PCh. 10 - Prob. 37PCh. 10 - Prob. 1STCh. 10 - Prob. 2STCh. 10 - Prob. 3STCh. 10 - Prob. 4STCh. 10 - Prob. 5ST
Knowledge Booster
Similar questions
- help please answer in text form with proper workings and explanation for each and every part and steps with concept and introduction no AI no copy paste remember answer must be in proper format with all workingarrow_forwardThe AW values for retaining a presently owned machine for additional years are shown in the table. Note that the values represent the AW amount for each of the n years that the asset is kept, i.e., if it is kept 5 more years, the annual worth is $-95,000 for each of the 5 years. Assume that future costs remain as estimated for the replacement study and that used machines like the one presently owned will always be available. (a) What is the ESL and associated AW of the defender at a MARR of 12% per year? (b) A challenger with an ESL of 7 years and an AWC = $-87,000 per year has been identified. Which AW will be less for the respective ESL periods? Retention Period, Years AW Value, $ per Year 1 -80,000 -93,000 3. -82,000 4 -92,000 -95,000 a) The ESL of the defender is year(s) with the lowest AW of S b) The defender has the lower AW at S for n equal toarrow_forwardIf we think the investment is sensitive to annual revenues, what is its breakeven point for the project?arrow_forward
- Ima Good-Student enrolls in ENGR 3202. She had considered purchasing a new vehicle but decides that she can buy a good used vehicle and invest the difference in the stock market. Ima sells her current vehicle for $5000 and buys a low-mileage vehicle for $15000 in cash, no financing needed. She also realizes that she needs to account for maintenance and operation costs. Those costs are estimated to be $2000 per year and increase by $100 per year. She will keep the vehicle for years and sell it for an estimated $3000. If her MARR is 8%, what is the present value of this cash flow? O a. $-23000 O b. $-23400 O c. $-18000 O d. -$18400arrow_forwardProblem 8 A colleague has completed the following set of estimated costs and salvage values for a proposed machine with an initial cost of $15,000. However, he doesn't know how to find the most economic useful life. To demonstrate, you compute the equivalent uniform annual cost (EUAC) for year eight (EUAC) using a MARR of 15% Useful Estimated Estimated Life End-of- Salvage (years) Year MX Value 1 $0 $10,000 2 $0 $9000 3 $300 $8000 4 $300 $7000 5 $800 $6000 6 $1300 $5000 7 $1800 $4000 8 $2300 $3000 9 $2800 $2000 10 $3300 $1000arrow_forwardThe First cost of a passenger bus is ₽800,000. Its estimated life is 4 years with no salvage value. The operating cost per year of 300 days of operation are as follows: Tires, ₽24,000; gasoline, 60 liters per day at ₽15 per liter; Oil,₽80 per day; maintenance and repair, ₽40,000; labor ₽800 per day; miscellaneous expense, ₽18,000; depreciation, sinking fund at 10%. If the average passenger fare is ₽3.50 for each passenger one way and expected profit or return is 15% determine the minimum average number of passengers that should be transported each day. Use the AW method and Future worth method.arrow_forward
- ASAP PLZ An industrial plant bought a generator set for P125,000. Other expenses including instalment amounted to P35.000. The generator set is to have a life of 17 years with a salvage value at the end of life of P4,000. In what year did the book value of the generator set equal or almost equal to half of the cost of the equipment, use SYD method. (ENGINEERING ECONOMY)arrow_forwardThe Briggs and Stratton Commercial Division designs and manufacturers small engines for golf turf maintenance equipment. A robotics-based testing system with support equipment will ensure that their new signature guarantee program entitled "Always Insta-Start" does indeed work for every engine produced. First cost of equipment AOC per Year Salvage Value Estimated Life Pull System $-1,800,000 $-620,000 $90,000 8 years Push System $-2,500,000 $-640,000 $130,000 8 years Determine the salvage value for the push system that will make the company indifferent to the two systems. Also, MARR = 13% per year. The salvage value for the push system is determined to be $ in $1000 units.arrow_forwardSolve it correctly please. I need correct answer. Iarrow_forward
- Subject - account Please help me. Thankyou.arrow_forwardI NEED THE ANSWER NOW. THANK YOUarrow_forwardAn industrial firm is considering purchasing a new machine for $25000. if the machine's capital recovery cost is calculated to be $3500 over its 5-year service life and the firm's MARR is 10% answer the following questions. a) Draw the cash flow diagram and load all the values appropriately. b) What salvage value has the firm assumed in calculating the machine capital recovery costs?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Principles of Economics (12th Edition)EconomicsISBN:9780134078779Author:Karl E. Case, Ray C. Fair, Sharon E. OsterPublisher:PEARSON
Engineering Economy (17th Edition)EconomicsISBN:9780134870069Author:William G. Sullivan, Elin M. Wicks, C. Patrick KoellingPublisher:PEARSON
Principles of Economics (MindTap Course List)EconomicsISBN:9781305585126Author:N. Gregory MankiwPublisher:Cengage Learning
Managerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-...EconomicsISBN:9781259290619Author:Michael Baye, Jeff PrincePublisher:McGraw-Hill Education
Principles of Economics (12th Edition)
Economics
ISBN:9780134078779
Author:Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:9780134870069
Author:William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-...
Economics
ISBN:9781259290619
Author:Michael Baye, Jeff Prince
Publisher:McGraw-Hill Education