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 11, Problem 15P
To determine
Sensitivity analysis with
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Students have asked these similar questions
An industrial machine costing $10,000 will produce net cash
savings of $4,000 per year. The machine has a five-year useful life
but must be returned to the factory for major repairs after three
years of operation. These repairs cost $5,000. The company's
MARR is 10% per year. What IRR will be earned on the purchase
of this machine? Analyze the sensitivity of IRR to ± $2,000
changes in the repair cost.
Perform the sensitivity analysis. Fill-in the table below. (Round to
one decimal place.)
Change in
the repair cost
- $2,000
$0
IRR
21.05%
9.61 %
Is the project
acceptable?
Yes
No
The following data for X and Y are in format [XY]. First cost in $:
[-80,000,-95,000], Annual cost in $: [-20,000, -15,000], Salvage value
in $: [10,000, 30,000], $ Life in years [2,4]. The interest rate is 10% per
year. The equation that will calculate the present worth of
machine X is:
Select one:
a.
b.
O c.
PWX = -80,000 - 20,000(P/A, 10%,2) + 10,000(P/F,10%,2)
PWX = -80,000 - 15,000(P/A, 10%,4) + 30,000[P/F,10%,4)
PWX = -80,000 - 20,000(P/A,10%,4) - 70,000[P/F,10%,2) +
10,000(P/F,10%,4)
O d. PWX = -80,000 - 20,000(P/A, 10%,4) - 80,000(P/F,10%,2) +
10,000 (P/F,10%,4)
To make an item inhouse, equipement costing $245,000 must be purchased. It will
have a life of 4 years, an annual cost of $78,000, and each unit will cost $65 to
manufacture. Buying the item externally will cost $100 per unit. At i = 15% per year,
it is cheaper to make the item inhouse if the number produced per year is above
units.
Chapter 11 Solutions
Engineering Economy, Student Value Edition (17th Edition)
Ch. 11 - Prob. 1PCh. 11 - Refer to Example 11-2. Assuming gasoline costs...Ch. 11 - Prob. 3PCh. 11 - Prob. 4PCh. 11 - Prob. 5PCh. 11 - Prob. 6PCh. 11 - Prob. 7PCh. 11 - Prob. 8PCh. 11 - Prob. 9PCh. 11 - Prob. 10P
Ch. 11 - Prob. 11PCh. 11 - Prob. 12PCh. 11 - Prob. 13PCh. 11 - Prob. 14PCh. 11 - Prob. 15PCh. 11 - Prob. 16PCh. 11 - Prob. 17PCh. 11 - Prob. 18PCh. 11 - Prob. 19PCh. 11 - A bridge is to be constructed now as part of a new...Ch. 11 - An aerodynamic three-wheeled automobile (the Dart)...Ch. 11 - Prob. 23PCh. 11 - Prob. 24SECh. 11 - Prob. 25SECh. 11 - Prob. 26SECh. 11 - Prob. 27SECh. 11 - Prob. 28SECh. 11 - Prob. 29SECh. 11 - Prob. 30FECh. 11 - Prob. 31FECh. 11 - A supermarket chain buys loaves of bread from its...Ch. 11 - A supermarket chain buys loaves of bread from its...Ch. 11 - Prob. 34FECh. 11 - Prob. 35FECh. 11 - Prob. 36FECh. 11 - Prob. 37FECh. 11 - Prob. 38FECh. 11 - Prob. 39FECh. 11 - Prob. 40FECh. 11 - Prob. 41FECh. 11 - Prob. 42FE
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