Engineering Economy
Engineering Economy
16th Edition
ISBN: 9780133582819
Author: Sullivan
Publisher: DGTL BNCOM
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Chapter 11, Problem 18P
To determine

Calculate the breakeven value.

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In certain cases, experience will indicate the best time to perform certain operations to maintain equipment at the highest level of efficiency. A machine used for cutting materials in a factory has the ff outputs per hour at various speeds and requires periodic tool regrinding at the intervals cited. Speed Output per Hour Tool Regrinding A 200pcs Every 8 hrs B 250pcs Every 7 hrs C 280pcs Every 5 hrs A set of tools costs P1,800 and can be ground twenty times. Each regrinding costs P18 and the time needed to regrind and change tools is 1 hour. The machine operator is paid P28 per hour, including the time the tool is changed. The tool grinder who also sets the tools to the machine is paid P25 per hour. The hourly rate chargeable against the machine is P54, regardless of machine speed. What is the total cost of Speed B.
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A steam boiler is required as part of the design of a new plant. The types of fuel that can be used to ignite the boiler are natural gas, fuel oil, and coal. The cost of installation including all required controls is $40,000 for natural gas, $50,000 for fuel oil, and $120,000 for coal. In addition, the annual cost of fuel oil is $8,000 less than the annual cost of natural gas and $12,000 more than the annual cost of coal. The boiler is to be utilized for 20 years and interest rate is 8%. Using the most suitable approach, determine the best alternative. Is there any other consideration for the obtained result? As one way, please solve using either Cash Flow Analysis, Present Worth Analysis, or any other similar method. As a second way, use Excel software and include all required command statements require to solve it.
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