Engineering Economy
16th Edition
ISBN: 9780133582819
Author: Sullivan
Publisher: DGTL BNCOM
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Chapter 10, Problem 4P
A retrofitted space-heating system is being considered for a small office building. The system can be purchased and installed for $120,000, and it will save an estimated 300,000 kilowatt-hours (kWh) of electric power each year over a six-year period. A kilowatt-hour of electricity costs $0.10, and the company uses a MARR of 15% per year in its economic evaluations of refurbished systems. The market value of the system will be $8,000 at the end of six years, and additional annual operating and maintenance expenses are negligible. Use the benefit-cost method to make a recommendation.
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The International Parcel Service has installed a new radio frequency identification system to help reduce the number of packages that
are incorrectly delivered. The capital investment in the system is $101,193 and the projected annual savings are estimated to start at
$15,000 at EOY 1 and grow by 20% each year thereafter. The system's market value at the EOY 10 is $10,000, and the MARR is 18%
per year, compounded weekly. What year will the FC be recovered?
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A retrofitted space-heating system is being considered for a small office building. The
system can be purchased and installed for $95,000, and it will save an estimated
150,000 kilowatt-hours (kWh) of electric power each year over a seven-year period.
A kilowatt-hour of electricity costs $0.12, and the company uses a MARR of 12% per
year in its economic evaluations of refurbished systems. The market value of the system
will be $19,000 at the end of seven years, and additional operating and maintenance
expenses are $10,500 per year. Use the benefit-cost method to make a
recommendation.
Click the icon to view the interest and annuity table for discrete compounding when
the MARR is 12per year.
The conventional B-C ratio of the system is 1.48. (Round to two decimal places.)
This B-C ratio indicates that the project is not acceptable.
A retrofitted space-heating system is being considered for a small office building. The system can be purchased and
installed for $86,000, and it will save an estimated 170,000 kilowatt-hours (kWh) of electric power each year over a
five-year period. A kilowatt-hour of electricity costs $0.14, and the company uses a MARR of 12% per year in its
economic evaluations of refurbished systems. The market value of the system will be $17,200 at the end of five years,
and additional operating and maintenance expenses are $9,500 per year. Use the benefit-cost method to make a
recommendation.
Click the icon to view the interest and annuity table for discrete compounding when the MARR is 12% per year.
The conventional B-C ratio of the system is
This B-C ratio indicates that the project is
(Round to two decimal places.)
Chapter 10 Solutions
Engineering Economy
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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