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 35FE
To determine
Profitability of the project.
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Two projects are independent if the expected costs and the expected benefits of each project do
not depend on whether the other one is chosen.
Select one:
True
False
35
Curtis Party Rentals offers party equipment such as tents, tables, chairs, and so on for outdoor events. The rental fees average $940
per event. Curtis receives a 15 percent deposit two months before the event, 60 percent the month before, and the remainder on the
day the equipment is delivered and set up. Planners at Curtis estimate the following number of events for the last half of the current
year:
July
August
September
October
November
December
Required:
a. What are the expected revenues for Curtis Party Rentals for each month, July through December? Revenues are recorded in the
month of the event.
b. What are the expected cash receipts for each month, July through October?
330
350
400
310
270
300
Complete this question by entering your answers in the tabs below.
Required A Required B
What are the expected revenues for Curtis Party Rentals for each month, July through December? Revenues are recorded in
the month of the event.
July
August
September
October
November
December…
using excel is fine
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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- The tree diagram in figure below describes the uncertain cash flows for an engineering project. The analysis period is two years, and MARR = 12% per year. Based on this information, a. What are the E(PW), V(PW), and SD(PW) of the project? b. What is the probability that PW≥ 0? Click the icon to view the tree diagram. Click the icon to view the interest and annuity table for discrete compounding when the MARR is 12% per year. a. Calculate the E(PW), V(PW), and SD(PW) of the project. E(PW) = $ (Round to the nearest dollar.) More Info 0 -$29,000 0.2 0.6 0.2 Time Period 1 $5,500 $11,000 $17,500 0.1 0.1 0.8 0.1 0.7 0.2 0.2 0.3 0.5 2 $17,200 $20,200 $24,800 $20,100 $24,600 $29.300 $21,900 $28,000 $31,100 C Q - X More Info N 1 2 3 4 5 Discrete Compounding; i = 12% Compound Amount Factor To Find F Given A FIA 1.0000 2.1200 3.3744 4.7793 6.3528 Single Payment Compound Amount Factor To Find F Given P F/P 1.1200 1.2544 1.4049 1.5735 1.7623 Present Worth Factor To Find P Given F P/F 0.8929 0.7972…arrow_forwardFile Preview 2. The cash flows from a contemplated project are assumed to have a Beta distribution with following estimated values: EOY 0 Pessimistic, Yp S-14,000 1 0 2 5,000 3 8,000 Most likely $-12,000 2,000 8,000 12,000 Optimistic, Yo $-10,000 4,000 11,000 16,000 (a) Calculate the means and standard deviations of the cash flow for each year. (b) Assume MARR-15%, find the the mean and standard deviation of the net present value. (Assume the cash flows are completely independent.)arrow_forwardThe wow expert Hand written solution is not allowed.arrow_forward
- Answer All parts show stepsarrow_forwardA new investment is estimated to more likely generate a uniform annual revenue of $560,000 for the next 10 years of service life. However, the investors think that there is a possibility that the annual revenue could be as high as $870,000 or as low $310,000. Calculate the expected annual revenue using the three-point estimation method, OA $570,000 OB. $445,000 OC. $500,000 OD. $725,000 Tarrow_forwardChemitronix Ltd. is a microchips manufacturing company. It was found that the business is at the maturity stage, demanding some change. After rigorous research, management came up with the following decision variables.Expansion: 45% chance of gaining 1,500,00; 55% chance of losing XNew Product: 50% chance of gaining 900,000; 50% chance of losing 539740What must have been the value of expansion loss if expansion and new product will result to the same expected monetary values?arrow_forward
- John wants to invest $1 000 000. He has two options. The first option is to buy government bonds that earn 4% annually. The second option is to buy an apartment building that brings him $100 000 per year in revenues. Compare the two options in terms of their internal rates of return. (Your answer in the answer box should be either 1 or 2). Calculations should be provided.arrow_forward2. Assume that we can estimate a project's cash flows as follows: n 0 1 2 3 4 5 Expected Flow E(An) Estimate of Standard Deviation on $0 $10 $15 $20 $25 $30 -$300 $120 $150 $150 $110 $100 In this case, each annual flow can be represented by a random variable with known mean and variance. Further assume complete independence among the cash flows. (a) Find the expected NPW and the variance of this project at i = 10%. (b) If all cash flows are normally distributed with the given means and variances, what is the probability that the NPW will exceed $200?arrow_forwardSuppose that, for a certain potential investment project, the optimistic, most likely, and pessimistic estimates are as shown in the accompanying table. Optimistic $90,000 11 years $30,000 $36,000 12% Most Likely $100,000 7 years $20,000 $27,000 12% Capital investment Useful life Market value Net annual cash flow MARR (per year) Pessimistic $122,000 5 years $0 $18,000 12% a. What is the AW for each of the three estimation conditions? b. It is thought that the most critical factors are useful life and net annual cash flow. Develop a table showing the net AW for all combinations of the estimates for these two factors, assuming all other factors to be at their most likely values. Click the icon to view the interest and annuity table for discrete compounding when the MARR is 12% per year.arrow_forward
- show your work will like if it makes sense & if correctarrow_forwardConsider the following projects, X and Y where the firm can only choose one. Project X costs $1500 and has cash flows of $678, $652, $347, $111, $54, $16 in each of the next 6 years. Project Y also costs $1500, and generates cash flows of $738, $693, $405 for the next 3 years, respectively. WACC=11%. A) Draw the timelines for both projects: X and Y.arrow_forwardBarney need to choose between two equipment for his project. Equipment A: First cost = 200,000.00, Annual Operating Cost = 32,000.00 , Annual Labor Cost = 50,000.00 , Property taxes = 3%, Payroll taxes = 4%, Estimated life = 10 years. Equipment B: First cost = 300,000.00, Annual Operating Cost = 24,000.00 , Annual Labor Cost = 32,000.00 , Property taxes = 3%, Payroll taxes = 4%, Estimated life = 10 years. If the minimum required rate of return is 15%, what is the equivalent uniform annual cost of Equipment B? a. P126,070 b. P124,030 c. P129,850 d. P130,870arrow_forward
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