Engineering Economy (16th Edition) - Standalone book
16th Edition
ISBN: 9780133439274
Author: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher: PEARSON
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Chapter 10, Problem 23P
You have been requested to recommend one of the mutually exclusive industrial sanitation
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The following estimates (in $1000 units) have
been developed for a new security system at
Chicago's O'Hare Airport.
First cost, S
13,000
AW of benefits, $/year
FW (in year 20) of disbenefits, $
M&O costs, $/year
3,800
6,750
400
Life of project, years
20
a. Calculate the conventional B/C ratio at a dis-
count rate of 10% per year.
b. Determine the minimum first cost necessary to
make the project economically unjustified.
The federal government is considering three sites in the National Wildlife Preserve for mineralextraction. The cash flows (in millions) associated with each site are given below. Use the B/Cmethod to determine which site, if any, is best, if the extraction period is limited to 5 years andthe interest rate is 10% per year.
A proposal to reduce traffic congestion on Jounieh Highway has a B/C
ratio of 1.4. The annual worth of benefits minus disbenefits is $560,000.
What is the first cost of the project if the interest rate is 5% per year and
the project is expected to be perpetual?*
4,000,000
4,588,208
8,000,000
6,666,667
Chapter 10 Solutions
Engineering Economy (16th Edition) - Standalone book
Ch. 10 - The Adams Construction Company is bidding on a...Ch. 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 - A flood control project with a life of 16 years...Ch. 10 - Prob. 30FECh. 10 - Prob. 31FE
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- Two methods to control newly discovered poisonous weeds in bar-ditches on the sides of county roads in New Farmendale are under consideration. Method A involves use of a 20-year life lining at an initial cost of $14,000 and an annual maintenance cost of $3 per kilometer (km). Method B involves spraying a chemical that costs $40 per liter. One liter will treat 8 km, but the treatment must be applied four times per year. In determining the number of km per year that would result in breakeven, the variable cost for method B is closest to: (a) $5 per km (b) $15 per km (c) $20 per km (d) $40 per kmarrow_forwardQ#1) Select the most economical among the following mutually exclusive alternatives using PW and AW methods of analysis at interest rate of 10% per year: First cost ($) Annual Operating Cost ($/year) Major repair ($) Life (years) Salvage ($) Machine A 20,000 5,000 for the first year and increases by 1,000 each year none 10 2,000 Machine B 50,000 2,000 per year up to year 10 and 5,000 per year thereafter 5,000 every 5 years including at year 40 40 5,000 Q#2) Find the Rate of Return for machines A and B in question #1 if the annual revenues for each machine is estimated at $20,000 per year.arrow_forwardLocations under consideration for a border patrol station have their costs estimated by the federal government. Use the B/C ratio method at an Interest rate of 9.00% per year to determine which location to select, if any. (Round the final answer to three decimal places.) Location Initial Cost, $ Annual Cost, $ per Year Disbenefits, $ per Year Life, Years The AB/C ratio is -928888.889 ✪ Select location. N North N 1,360,000 480,000 70,000 South S 2,900,000 400,000 45,000 0arrow_forward
- The two alternatives shown are under consideration for improving security at a county jail in Travis County, New York. Determine which one, if either, should be selected based on a B/C analysis, an interest rate of 7% per year, and a 10-year study period. Extra Cameras (EC) New Sensors (NS) 38,000 87,000 49,000 84,000 100,000 87,000 16,000 First cost, $ Annual M&O. $ per year Benefits, $ per year Disbenefits, $ per year The B/C ratio is Select alternative (Click to select)arrow_forwardCould you please tell me answer to this question, a circled or highlighted answer would be appreciated, thank you.arrow_forwardIn order to safeguard the public health, environment, public beaches, water quality, and economy of south San Diego County, California, and Tijuana, Mexico, federal agencies in the United States and Mexico developed four alternatives for treating wastewater prior to discharge into the ocean. The project will minimize untreated wastewater flows that have caused chronic and substantial pollution in the Tijuana River valley, Tijuana River National Estuarine Research Reserve, coastal areas used for agriculture and public recreation, and areas designated as critical habitat for federal and state-listed endangered species. If the costs and benefits are as shown, which alternative should be selected on the basis of a B/C analysis at 6% per year and a 40-year project period? All monetary amounts are in $ million units.arrow_forward
- Six sites have been identified for a parking lot in downtown Blacksburg. Because the sites are plots of land, their salvage value and investment cost are identical. A 10-year study period has been specified, and the MARR is 19% per year. Which site should be chosen based on the IRR criterion? Click the icon to view the alternatives description.arrow_forwardFeng Seawater Desalination Systems has established a capital investment limit of $800,000 for next year for projects that target improved recovery of highly brackish groundwater. All projects have a 4-year life and the MARR is 10% per year. (a) Select any or all of the projects. (b) Project Z is a favorite of Mr. Feng. Determine the minimum NCF necessary to make Z the economically best project. (c) Use a spreadsheet to answer the two parts above. Initial Net Cash Salvage Project Investment, $ Flow, $/Year Value, $ X −250,000 50,000 45,000 Y −300,000 90,000 −10,000 Z −550,000 150,000 100,000arrow_forwardYou have been requested to compare four mutually exclusive alternatives using the B/C method and the results are shown. Which alternative, if any, do you recommend? Alternative X Z Q Equivalent Total Cost, $ Million 20 30 50 90 Direct B/C Ratio 0.75 1.07 1.20 1.11 AB/C Ratio When Compared with Alternative 1.70 1.50 1.21 1.40 1.13 Z 1.00arrow_forward
- If the B/C value is exactly 1.0 or very near 1.0, non-economic factors can assist make the decision for the best alternative. Select one: True Falsearrow_forwardSome of the formal evaluation techniques used by engineers is Economic analysis. Such analyses attempt to compare the public benefits from such projects with the costs of providing them. Economic studies may be used to (give three uses):arrow_forwardThe following estimates (in $1000 units) have been developed for a new cybersecurity system at Chicago's O'Hare Airport. Calculate the conventional B/C ratio at a discount rate of 10% per year. First cost, $ AW of benefits, $ per year FW (in year 20) of disbenefits, $ M&O costs, $ per year Expected life, years O 1.21 <1.15 1.52 O 1.91 DOCUMENT.pdf 13,000 3,800 6,750 400 20arrow_forward
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