Engineering Economy
16th Edition
ISBN: 9780133582819
Author: Sullivan
Publisher: DGTL BNCOM
expand_more
expand_more
format_list_bulleted
Question
Chapter 11, Problem 6P
(a):
To determine
Calculate the breakeven operating hour.
(b):
To determine
Calculate the breakeven efficiency.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
Current 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%?
An integrated, combined cycle power plant produces 280 MW of electricity by gasifying coal. The capital investment for
the plant is $460 million, spread evenly over two years. The operating life of the plant is expected to be 25
years. Additionally, the plant will operate at full capacity 77% of the time (downtime is 23% of any given year). The
MARR is 8% per year.
a. If this plant will make a profit of two cents per kilowatt-hour of electricity sold to the power grid, what is the simple
payback period of the plant? Is it a low-risk venture?
b. What is the IRR for the plant? Is it profitable?
a. The simple payback period of the plant is years. (Round up to one decimal place.)
It's a
venture.
b. The IRR for the plant is %. (Round to one decimal place.)
The plant is
An integrated, combined cycle power plant produces 280 MW of electricity by gasifying coal. The capital investment for the plant is $690 million, spread evenly over two
years. The operating life of the plant is expected to be 17 years. Additionally, the plant will operate at full capacity 78% of the time (downtime is 22% of any given year). The
MARR is 5% per year.
a. If this plant will make a profit of three cents per kilowatt-hour of electricity sold to the power grid, what is the simple payback period of the plant? Is it a low-risk venture?
b. What is the IRR for the plant? Is it profitable?
O
Chapter 11 Solutions
Engineering Economy
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 - You have decided to purchase a new automobile with...Ch. 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
Knowledge Booster
Similar questions
- An area can be irrigated by pumping water from a nearby river. Two competing installations are being considered. The MARR is 12% per year and electric power for the pumps costs $0.06 per kWh. Recall that 1 horsepower (hp) equals 0.746 kilowatts. (11.2, 11.3) a. At what level of operation (hours per year) would you be indifferent between the two pumping systems? If the pumping system is expected to operate 2,000 hours per year, which system should be recommended? b. Perform a sensitivity analysis on the efficiency of Pump A. Over what range of pumping efficiency is Pump A preferred to Pump B? Assume 2,000 hours of operation per year, and draw a graph to illustrate your answer.arrow_forwardAn integrated, combined cycle power plant produces 285 MW of electricity by gasifying coal. The capital investment for the plant is $700 million, spread evenly over two years. The operating life of the plant is expected to be 15 years. Additionally, the plant will operate at full capacity 77% of the time (downtime is 23% of any given year). The MARR is 7% per year. a. If this plant will make a profit of three cents per kilowatt-hour of electricity sold to the power grid, what is the simple payback period of the plant?.arrow_forwardAn integrated, combined cycle power plant produces 295 MW of electricity by gasifying coal. The capital investment for the plant is $450 million, spread evenly over two years. The operating life of the plant is expected to be 15 years. Additionally, the plant will operate at full capacity 72% of the time (downtime is 28% of any given year). The MARR is 8% per year. a. If this plant will make a profit of two cents per kilowatt-hour of electricity sold to the power grid, what is the simple payback period of the plant? Is it a low-risk venture? b. What is the IRR for the plant? Is it profitable? a. The simple payback period of the plant is 12.1 years. (Round up to one decimal place.) It's a high-risk venture. b. The IRR for the plant is %. (Round to one decimal place.)arrow_forward
- A hand tool cost $200 and requires $1.21 labor cost per unit. A machine tool costs $3600 and reduces labor to $0.75. What is the break-even point (in years) at 5% for an annual production of 4000 units?arrow_forwardPlease answerarrow_forwardAn integrated, combined cycle power plant produces 285 MW of electricity by gasifying coal. The capital investment for the plant is $530 million, spread evenly over two years. The operating life of the plant is expected to be 18 years. Additionally, the plant will operate at full capacity 76% of the time (downtime is 24% of any given year). The MARR is 7% per year. a. If this plant will make a profit of two cents per kilowatt-hour of electricity sold to the power grid, what is the simple payback period of the plant? Is it a low-risk venture? b. What is the IRR for the plant? Is it profitable? a. The simple payback period of the plant is 14 years. (Round up to one decimal place.) It's a high-risk venture. b. The IRR for the plant is %. (Round to one decimal place.) CHEarrow_forward
- SHOW COMPLETE SOLUTIONS. SHOW CASHFLOW DIAGAM. DO NOT USE EXCEL. UNIFORM ARITHMETIC GRADIENT A parcel of land in a downtown area, suitable for parking lot, can be leased for a period of 10 years. Initial development costs for clearing, paving and constructing a small office shed on the lot is estimated to be P150,000. If the net annual revenue for the first year is P22,000 and increases by 10% per year thereafter until the tenth year, and the improvements revert to the owner of the land at the end of 10 years, what is the rate of return on the investment?arrow_forwardData for two 50-hr motors are follows: Honda Motor Kawasaki Motor Original Cost Annual Maintenance Life, years Efficiency Taxes and Insurance The cost of electricity per kilowatt-hour is two dollars. If money has a value of 20%, how many hours per year must the motors run at full load to be equally economical? Which motor is more affordable if the predicted number of operating hours per year is more than the break-even point? a. Calculate the power consumption of Honda Motors in terms of X. b. Calculate the power consumption of Kawasaki Motors in terms of X. c. Solve for the break-even point. 37,500 48,000 750 1,500 10 10 87% 3% 92% 3%arrow_forwardA4 Please complete the things I have not filled out. I believe the best way to complete this is using excel. Also make sure to do the part that says to perform the incremental IRR analysis for the remaning alternatives (The part that has The IRR delta (C - A = ?? %). Thank You!arrow_forward
- Shao Airlines is considering the purchase of two alternative planes. Plane A has an expected life of 5 years, will cost $100 million, and will produce net cash flows of $30 million per year. Plane B has a life of 10 years, will cost $132 million, and will produce net cash flows of $25 million per year. Shao plans to serve the route for only 10 years. Inflation in operating costs, airplane costs, and fares are expected to be zero, and the company's cost of capital is 12%. By how much would the value of the company increase if it accepted the better project (plane)? Do not round intermediate calculations. Enter your answer in millions. For example, an answer of $1.234 million should be entered as 1.234, not 1,234,000. Round your answer to three decimal places. What is the equivalent annual annuity for each plane? Do not round intermediate calculations. Enter your answers in millions. For example, an answer of $1.234 million should be entered as 1.234, not 1,234,000. Round your answers to…arrow_forwardi need helparrow_forwardShow full work, no excel pleasearrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Principles of Economics (12th Edition)EconomicsISBN:9780134078779Author:Karl E. Case, Ray C. Fair, Sharon E. OsterPublisher:PEARSONEngineering Economy (17th Edition)EconomicsISBN:9780134870069Author:William G. Sullivan, Elin M. Wicks, C. Patrick KoellingPublisher:PEARSON
- Principles of Economics (MindTap Course List)EconomicsISBN:9781305585126Author:N. Gregory MankiwPublisher:Cengage LearningManagerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage LearningManagerial Economics & Business Strategy (Mcgraw-...EconomicsISBN:9781259290619Author:Michael Baye, Jeff PrincePublisher:McGraw-Hill Education
Principles of Economics (12th Edition)
Economics
ISBN:9780134078779
Author:Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:9780134870069
Author:William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-...
Economics
ISBN:9781259290619
Author:Michael Baye, Jeff Prince
Publisher:McGraw-Hill Education