Engineering Economy, Student Value Edition (17th Edition)
17th Edition
ISBN: 9780134838137
Author: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 10, Problem 31FE
To determine
Calculated the Incremental benefit cost ratio.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
Q#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.
A gold mining area in Lanao contains on average, 1 ounce of gold per
ton. Two methods of processing are available; method A costs P1.5M
per ton and recovers 90% of gold; method B costs P1.3M per ton and
recovers 80% of the gold. If gold can be sold for P2.4M per ounce , which
method is better and by how much?
Could you please tell me answer to this question, a circled or highlighted answer would be appreciated, thank you.
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
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Similar questions
- The 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_forwardKen Allen, capital budgeting analyst for Bally Gears, Inc., has been asked to evaluate a proposal. The manager of the automotive division believes that replacing therobotics used on the heavy truck gear line will produce total benefits of $516,000 (in today's dollars) over the next 5 years. The existing robotics would produce benefits of $387,000 (also in today's dollars) over that same timeperiod. An initial cash investment of $206,400 would be required to install the new equipment. The manager estimates that the existing robotics can be sold for $72,000. Show how Ken will apply marginal cost-benefit analysistechniques to determine the following:a. The marginal benefits of the proposed new robotics.b. The marginal cost of the proposed new roboticsc. The net benefit of the proposed new robotics.arrow_forwardQ4 (i) State the salient features of the Pakistan Environmental Protection Act (PEPA) 1997.arrow_forward
- As supervisor of a facilities engineering department, you consider mobile cranes to be critical equipment. The purchase of a new, medium-sized truck-mounted crane is being evaluated. The economic estimates for the two best alternatives are shown in the following table. MARR is at 15% per year. You can use the assumption of repeatability in this case. Show that the same selection is made for the following methods:a. RORAI method b. AWC method c. PW methodarrow_forwardA construction company is evaluating the purchase of a new concrete mixer with hydraulic hopper and automatic controller. The mixer will have a first cost of BD 12,000, a life of 9 years, and no salvage value. It will require 2 operators at a cost of BD 4.500 per hour each. A total of one cubic meter of concrete can be poured each hour by the mixer. Alternatively, if human labor is used, 5 workers, each earning BD 4 per hour, are required to one cubic meter per hour. The estimated cost of the material is BD 21 per cubic meter and the MARR is 7% per year (clearly show the S.N., numeric answer, and final decision). a) Determine the minimum cubic meters per year to justify the purchase of the automatic mixer. b) The company expects to produce 140 cubic meters per year, which option should they select? Why?arrow_forwardA 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%!arrow_forward
- Alternative Annualized first cost. $/year Annual M&O cost. $/year Annual benefits, $/year Annual disbenefits, $/year Life, years Multiple Choice O O fund both X and Y fund neither fund Y fund X 60,000 90.000 45,000 35,000 110.000 150.000 20,000 45,000 Show Transcribed Text for the two independent projects shown determine which if any should be funded i=10% per year using B/C ratio method.arrow_forwardKen Allen, capital budgeting analyst for Bally Gears, Inc., has been asked to evaluate a proposal. The manager of the automotive division believes that replacing the robotics used on the heavy truck gear line will produce total benefits of $560,000 (in today's dollars) over the next 5 years. The existing robotics would produce benefits of $400,000 (also in today's dollars) over that same time period. An initial cash investment of $220,000 would be required to install the new equipment. The manager estimates that the existing robotics can be sold for $70,000. Show how Ken will apply marginal cost-benefit analysis techniques to determine the following: The marginal (added) benefits of the proposed new robotics is $______________ The marginal (added) cost of the proposed new robotics is $__________________ The net benefit of the proposed new robotics isarrow_forwardEvaluate a combined cycle power plant on the basis of the PW method when the MARR is 18% per year. Pertinent cost data are as follows: Investment cost Useful life Market value (EOY 15) Annual operating expenses Annual expenses Overhaul cost-end of 5th year Overhaul cost-end of 10th year Power Plant (thousands of Php) Php 1,100,000 15 years Php 500,000 Php 50,000 Php 290,000 Php 12,500 Php 25,000arrow_forward
- 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 Falsearrow_forward! Required information An airport Baggage Handing Department has evaluated two proposals for baggage delivery conveyor systems. A present worth analysis at i = 15% per year of estimated revenues and costs resulted in PWA = $460,000 and PWB = $395,000. In addition to this economic measure, three more attributes were independently assigned a relative importance score from 0 to 100 by the department manager and a senior team supervisor. Importance Scores Manager 45 Attribute Economics Durability Safety Maintainability 35 30 20 Attribute Economics Durability Safety Maintainability Separately, you have used the four attributes to value rate the two proposals on a scale of 0 to 1.0 as shown in the following table. (The economic attribute was rated using the PW values.) Value Rating Proposal A 1.00 0.35 1.00 0.25 Importance Scores Supervisor 40 35 Select the better proposal using the following method. Weighted evaluation of the department manager's method. The value of R; for A is The value…arrow_forwardEvaluate a combined cycle power plant on the basis of the FW method when the MARR is 18% per year. Pertinent cost data are as follows: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:PEARSONEngineering 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 LearningManagerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage LearningManagerial 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
Valuation Analysis in Project Finance Models - DCF & IRR; Author: Financial modeling;https://www.youtube.com/watch?v=xDlQPJaFtCw;License: Standard Youtube License