Engineering Economy, Student Value Edition (17th Edition)
17th Edition
ISBN: 9780134838137
Author: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher: PEARSON
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Chapter 10, Problem 15P
To determine
Calculate the capitalized worth.
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A PAM partner company won a tender to provide clean water distribution facilities in an area that is being developed as a tourist area. There are 2 alternatives that can be taken in implementing the project.
The first alternative requires construction and installation costs of IDR 10 million per kilometer with maintenance costs of IDR 0.35 million per kilometer per year. The remaining value is estimated at IDR 1 million per kilometer at the end of the 20th year.
The second alternative requires construction and installation costs of IDR 7 million per kilometer with maintenance costs of IDR 0.40 million per kilometer per year. The remaining value is estimated at IDR 1.2 million per kilometer at the end of the 20th year.
If the company chooses the first alternative, the length of the pipe that must be installed is 10 kilometers, and if the second alternative the length of the cable is 16 kilometers.
Determine which alternative is more efficient using MARR = 11%!
Engineering Economics (Ilustrative Problem):
A tunnel through a mountain is being considered as a replacement for an existing stretch of highway in southern Mindanao. The existing road is a steep, narrow, winding two-lane highway that has been the site of numerous fatal accidents. The accidents average to 2.05 fatalities and 3.35 “serious injuries” per year. It has been projected that the tunnel will significantly reduce the frequency of accidents, with estimates of not more than 0.15 fatalities and 0.35 “serious injuries” per year. Initial capital investment requirements, including land acquisition, tunnel excavation, lighting, roadbed, and preparation, are estimated to be Php45 M. Annual upkeep costs for the tunnel will be significantly less than for the existing highway, resulting in an annual savings of Php85,000. For purposes of this analysis, a “value per life saved” of Php1 M will be applied, along with an estimate of Php750,000 per “serious injury” for medical costs.
Apply the…
Consider the following assumptions, field
size 640 acres, non-cropped area 5 acres,
2600' total length center pivot cost of
30,000 with a life expectancy of 15 years,
corn selling price of $3.75 per bushel,
expected grain yield of 160 bushels per
acre. If SDI irrigation costs $675 per acre
installed with a life expectancy of 25 years,
expected yield of 160 bushels per acre, you
would be money ahead to install SDI.
True
False
Chapter 10 Solutions
Engineering Economy, Student Value Edition (17th Edition)
Ch. 10 - Prob. 1PCh. 10 - Prob. 2PCh. 10 - Prob. 3PCh. 10 - A retrofitted space-heating system is being...Ch. 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 - Four mutually exclusive projects are being...Ch. 10 - Two municipal cell tower designs are being...Ch. 10 - Prob. 19PCh. 10 - Prob. 20PCh. 10 - Prob. 21PCh. 10 - Prob. 22PCh. 10 - You have been requested to recommend one of the...Ch. 10 - Prob. 24PCh. 10 - Prob. 25PCh. 10 - Prob. 26FECh. 10 - Prob. 27FECh. 10 - Prob. 28FECh. 10 - Prob. 29FECh. 10 - Prob. 30FECh. 10 - Prob. 31FE
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