Contemporary Engineering Economics (6th Edition)
Contemporary Engineering Economics (6th Edition)
6th Edition
ISBN: 9780134105598
Author: Chan S. Park
Publisher: PEARSON
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Chapter 10, Problem 15P

(a):

To determine

Calculate the present wroth.

(b):

To determine

Calculate the internal rate of return.

(c):

To determine

Calculate the equivalent annual value.

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The Allianz Company produces a specialty wood furniture​ product, and has the following information available concerning its inventory​ items:   Relevant ordering costs per purchase order ​$520 Relevant carrying costs per year for each​ product:        Required annual return on investment ​16%      Required other costs per year ​$9   Annual demand is​ 32,000 prroducts per year. The purchase price per product is​ $51.What is the economic order​ quantity?
Parts D, E and F.
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…
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