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 16P
To determine
Sensitivity analysis with
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Carlisle Company has been cited and must invest in equipment to reduce stack emissions or face EPA fines of $20,500 per year. An
emission reduction filter will cost $75,000 and have an expected life of 5 years. Carlisle's MARR is 10%/year.
Part a
What is the future worth of this investment? $
Carry all interim calculations to 5 decimal places and then round your final answer to the nearest dollar. The tolerance is £10.
Don't answer by pen paper and don't use Excel
Wall’s Pharmacy will have to sell a new product that has an estimated revenue of $5,100 per month and costs of $1,000 per month with an initial purchase of $28,000.
How long will Wall's Pharmacy have to sell a new product if the MARR is 3% per month?
Wall's Pharmacy will have to sell a new product for __ months.
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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- M4arrow_forwardThree independent alternatives are given below. If MARR is 18%, what is your decision? A B C Initial Cost $4.50 $1.90 $1.20 Annual Revenues $4.00 $2.50 $3.00 Salvage Value $0.50 $0.90 $0.00 Annual Operating & Maintenance Costs $1.20 $1.90 $2.70 Estimated life, in years 3 Infinitearrow_forwardThe Gigadigit Manufacturing Inc. is considering to produce a new product. The following data have been provided to management: Sales price S17.50/unit Equipment cost S250,000 Incremental overhead cost |550,000/year Sales and marketing cost $150,000/year Operating and maintenance cost $25/operating hour Production time/1,000 units 100 hours Packaging and shipping cost s0.50/unit Planning horizon Minimum attractive rate of return 15% 5 years The managers would like to know the viability of this product and how it would roll out in sales. (a) To give them basis and insight what is the break-even value of units that must be sold annually to keep the product viable? (b) If the target revenue is from 30,000 units sold, what is the expected profit? (C) If the profit drops by 13% due to equipment replacement, how much must have been the cost of the alternative equipment? (d) Provide graph for (a)arrow_forward
- A manager is considering installation of one of the following two machines in his factory 24 Panther $30,000 Cheeler More Info 1 $90,000 $20,000 $30,000 4 6 None None Initial Cost Annual Costs Service life (years) Salvage value Since the machines have different service lives, his economic analysis will assume repeatability and use an analysis period of 12 years. Given a MARR of 10% per year, calculate the following two parameters Click the icon to view the interest and annuity table for discrete compounding when /-10% per month. The EUAC of the Cheeter over the analysis period is (select the closest value) OA. $9,335 OB. $50,665 OC. $43,209 OD. $101,330 OE. $56,417 The PW of the Cheeter over the analysis period is (select the closest value). OA. $441,318 OB. $384,408 OC. $345,216 The of " wie OA BI O . Ос OR H " 0 0 " 15 ожи кли Derm TOW 5 6 B 9 0 T Y U 1 O Parrow_forwardAn electronics firm is planning to manufacture a new handheld gaming device for the preteen market. The data have been estimated for the product. Assuming a negligible market (salvage) value for the equipment at the end of five years, determine the breakeven annual sales volume for this product.arrow_forwardPLEASE SOLVE USING EXCELarrow_forward
- Hospital is evaluating the purchase of new office equipment from three vendors. Assume MARR=15% and 4 year useful life on all equipment. Select best vendor. What is the best vendor?arrow_forwardA design change being considered by Mayberry, Inc., will cost $6,000 and will result in an annual savings of $1,000 per year for the 6-year life of the project. A cost of $2,000 will be avoided at the end of the project as a result of the change. MARR is 8%/yr. Solve, a. What is the internal rate of return of this investment? b. What is the decision rule for judging the attractiveness of investments based on internal rate of return? c. Should Mayberry implement the design change?arrow_forwardGinger has agreed to a lawsuit settlement of $700,000 with a certain pharmaceutical company. The company has offered options to pay her the awarded money. After discussing the terms with the company, she expects that the company should be able to pay her back within 3-5 years Ginger has developed the following estimates Option A B-Pessimistic CMost likely D.Optimistic Delay period 5 years 4 years 3years Cash Flow Estimates, S $700.000 now $151.000 per year for every year the payment is delayed $173.200 per year for every year the payment is delayed $234.500 per year for every year the payment is delayed If her personal MARR is 15% per year, what is the present worth of each of her options? Option A-PW: Option B- PW: Option C- PW: Option D PW: 2. With respect to her personal MARR, which option should she select?arrow_forward
- If you have the present worth of an alternative with a 5-year life, you can obtain its annual worth by:a. multiplying the PW by i.b. multiplying the PW by (A/F,i,5).c. multiplying the PW by (P/A,i,5).d. multiplying the PW by (A/P,i,5).arrow_forwardEngineering Economyarrow_forwardCurrent Attempt in Progress Mandy is considering investing in an opportunity that would require an upfront cost of $ 520 but would pay $ 150 per year for each of the next 6 years. If Mandy chooses to invest in this opportunity, what would be the IRR? Click here to access the TVM Factor Table calculator. Carry all interim calculations to 5 decimal places and then round your final answer to 1 decimal place. The tolerance is ±0.5. Should Mandy invest in this opportunity if her personal MARR is 20%?arrow_forward
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