Engineering Economy (16th Edition) - Standalone book
Engineering Economy (16th Edition) - Standalone book
16th Edition
ISBN: 9780133439274
Author: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher: PEARSON
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Chapter 11, Problem 4P
To determine

Calculate the time periodt.

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A company is about to invest in a joint venture research and development project with another company. The project is expected to last nine years, but yearly payments the company makes will begin immediately (a payment is made today, and the last payment is nine years from today). Salaries will account for $50,000 of each payment. The reminder of each payment will cover equipment costs and facility overhead. The initial (immediate) equipment and facility cost is $50,000. Each subsequent year this figure will drop by $5000 until a cost of $25000 is reached, after which the costs will remain constant until the end of the project. a) Draw a cash flow diagram to illustrate the cash flows for this project. b) At an interest rate of 10%, what is the total future worth of all project payments at the end of the nine years?
Solve with complete solution and draw the cash flow diagram You purchased a building five years ago for $200,000. Its annual maintenance expense has been $15,000 per year. At the end of three years, you spent $55,000 on roof repairs. At the end of five years (now), you sell the building for $250,000. During the period of ownership, you rented out the building for $60,000 per year paid at the beginning of each year. If your MARR is 8% per year. a) Use the PW and AW methods to evaluate this investment. PW = $____ and AW = $____ b) Calculate IRR and ERR(( Ԑ=MARR).  IRR = Blank ____% and ERR = Blank ____% Note: For equivalent worth, round off the final answer to whole number. For Rate of Return, round off to two decimal places (in percentage)
Construction on your custom home is complete and now the yard must be landscaped. The landscape contractor has estimated that 8 cubic yards of dirt and 3 cubic yards of sand will be required to level the yard and provide proper drainage. Dirt is priced at $35 per cubic yard and sand is priced at $27 per cubic yard. She has measured the yard and calculated the area needing sod to be 3600 ft2. Sod is sold in rolls that measure 90 ft? at a cost of $10 each per roll. Shrubbery installation will cost an additional $2500. Estimate the cost of the landscaping.
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