Engineering Economy
16th Edition
ISBN: 9780133582819
Author: Sullivan
Publisher: DGTL BNCOM
expand_more
expand_more
format_list_bulleted
Question
Chapter 12, Problem 4P
(a):
To determine
Calculate the present worth.
(b):
To determine
Calculate the new present worth.
(c):
To determine
Calculate the present worth sensitivity with production change.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
=
2. The cost of operating a jet-powered commercial (passenger-
carrying) airplane varies as the three-halves (3/2) power of its
velocity; specifically, Co kny3/2, where n is the trip length in
miles, k is a constant of proportionality, and vis velocity in miles
per hour. It is known that at 400 miles per hour, the average cost of
operation is $300 per mile. The company that owns the aircraft
wants to minimize the cost of operation, but that cost must be
balanced against the cost of the passengers' time (CC), which has
been set at $300,000 per hour. At what velocity should the trip be
planned to minimize the total cost, which is the sum of the cost of
operating the airplane and the cost of passengers' time?
You get a discount on items when you order
500. The price of the item is $10 if you order
less than 100 and $9 if you order 100 or
more. The holding cost of the item is $2 per
year. The setup cost is $20. The demand for
the item is 2000 per year. Compute the
optimal EOQ.
Given the following information, how many units must be sold to achieve a profit of $25,000? [Note that the units sold must account for total production costs (direct and overhead) plus desired profit.]
Chapter 12 Solutions
Engineering Economy
Ch. 12 - Prob. 1PCh. 12 - Prob. 2PCh. 12 - A new snow making machine utilizes technology that...Ch. 12 - Prob. 4PCh. 12 - Prob. 5PCh. 12 - Prob. 6PCh. 12 - Prob. 7PCh. 12 - Prob. 8PCh. 12 - Prob. 9PCh. 12 - Prob. 10P
Ch. 12 - Prob. 11PCh. 12 - Prob. 12PCh. 12 - Prob. 13PCh. 12 - Prob. 14PCh. 12 - Prob. 15PCh. 12 - Prob. 16PCh. 12 - Prob. 17PCh. 12 - Prob. 18PCh. 12 - Prob. 19PCh. 12 - Prob. 20PCh. 12 - Prob. 21PCh. 12 - Prob. 22PCh. 12 - If the interest rate is 8% per year, what decision...Ch. 12 - Prob. 24PCh. 12 - Prob. 25PCh. 12 - Prob. 26SE
Knowledge Booster
Similar questions
- If a 5,000 gallon metal tank to hold hazardous materials cost $250,000. What would be the expected cost of constructing a 10,000 gallon tank for the same purpose given the power-sizing exponent of 0.5 Group of answer choices $375,000 $353,553 $477,561 .$500,000arrow_forwardIf company A manufactures t-shirts and sells them to retailers for US$9.80 each. It has fixed costs of $2625 related to the production of the t-shirts, and the production cost per unit is US$2.30. Company B also manufactures t-shirts and selll them directly to consumers.The demand for its product is p = 15 −x 125, its production cost per unit is US$5.00 and its fixed cost are the same as for company A . (i) Derive the total revenue function, R(x) for company A. (ii) Derive the total cost function, C(x) for company A. (iii) Derive the profit function, Π(x) for company A. (iv) Using a spreadsheet, create a table for showing x, R(x)?, C(x) for company A in the domain x = 50, 100, 150, 200, 250, 300, 350, 400, 450.(v) Graph the functions from (d) above on the same axes. (vi) From your graph, determine the break-even level of output for company A. (vii) Derive the total revenue function, R(x) for company B. (viii) Derive the profit…arrow_forwardLast year, 18,00018,000 people died from a newly discovered disease. Pollution is one of the contributing factors. However, even if the level of pollution is reduced, it is estimated that about 5,5005,500 people will die annually from the disease. The estimated cost of a pollution-reduction project is $33.75$33.75 billion; before investing, the government wants to verify the project's value.Calculate the average cost of a life saved. Enter your answer in U.S. dollars in the box below and round to the nearest whole number if necessary.arrow_forward
- The cost of producing per piece of an AVR is P23.00 for labor and P37.00 for direct materials. Another variable cost is P1.00 per unit AVR to be produced. The fixed costs is P100,000.00 per month. The AVR can be sold for P75.00 each. a. determine the number of units to be produced per month to break even. b. how many units are needed to earn an amount of P200,000/month?arrow_forwardThe Ozzie Chocolate Company is preparing to offer a new product in its candy offerings, the Minty Dark Chocolate Bite bar. Material costs per new candy bar are $0.25 for chocolate, $0.02 for sugar, and $0.03 for mint flavoring. Labor costs of the new product are approximately $0.15 per bar. Adding a production line devoted to the new candy will cost $250,000 per year. (a) If the sales price is $1.40 per candy bar, how many must the company make per year in order to break even? Assume that each bar made is sold at full price. (b) What is the company’s profit or loss if they make and sell 270,000 candy bars at the $1.40 price in the first year? (c) About 20% of the food consumed in the U.S. is imported. Production in many industries has been offshored. What ethical issues do companies face when presented with the decision to move operations?arrow_forwardA firm hasi nitial value V and has an investment opportunity costing 400 that will yield it an endpoint value of V +500 but it has to issue new shares to raise the required 400. Initially its owners own 10 shares that are currently selling at a market price of 80 per share. Note that this price may not necessarily reflect the true value per share– only the firm itself knows this. If it is indifferent between issuing and not issuing at the market price of 80, what is the initial true value of the firm V?arrow_forward
- Given problem: The ore of a gold mine in the Mountain Province contains, on average, 0.5 grams of gold per ton. One method of processing costs $1,650 per ton and recovers 93% of the gold, while another method costs only $1,500 per ton and recovers 81% of the gold. If gold can be sold at $8,500 per gram, which method is better, and by how much? Consider the income and cost per ton of ore. Solve for the net receipt of each method. *Round off answer in 2 decimal places. Thank youarrow_forwardA certain masonry dam requires 200,000 cu m of gravel for its construction. The contractor found two possible sources of gravel with the following data: Average distance gravel pit to dam site Gravel cost /cu.m at pit Purchase price of pit Road construction necessary Overbuden to be removed at P4.20 cu.m Hauling cost per cu.m per km Which of the two sites will give lesser cost? Source A 3.0 km P800,000.00 P350,000.00 P5.00 Source B 1.2 km P10.00 80,000 cu.m P5.00arrow_forwardA strawberry growing company is deciding its production and sale plan for the national and international markets.The sale price for each ton of strawberry depends on the quantity offered in the market. If x1 tons is offered for the domestic market, the sale price will be (30 - x1) CU / ton, while if x2 tons is offered for the international market, the sale price will be (40 - x2) CU / ton.The cost for each ton of strawberry for the domestic market is 10 MU, while for the international market it is 15 MU.The company has the capacity to produce up to 10 tons of strawberries for sale and according to SAG restrictions, it must dedicate at least 10% of production to the international market.For technical production reasons, the company must additionally satisfy the following restriction: x12 + x22 ≤64.d) There is the option of buying new machinery to increase the production capacity of the company. In what range should the new machine increase production capacity to suit the company? How…arrow_forward
- A strawberry growing company is deciding its production and sale plan for the national and international markets.The sale price for each ton of strawberry depends on the quantity offered in the market. If x1 tons is offered for the domestic market, the sale price will be (30 - x1) CU / ton, while if x2 tons is offered for the international market, the sale price will be (40 - x2) CU / ton.The cost for each ton of strawberry for the domestic market is 10 MUs, while for the international market it is 15 MUs.The company has the capacity to produce up to 10 tons of strawberries for sale and, according to SAG restrictions, it must dedicate at least 10% of its production to the international market.For technical production reasons, the company must additionally satisfy the following restriction: x12 + x22 ≤64.a) Raise the NLP model that allows maximizing the net profit for the companyb) State the KKT conditions for the problem and indicate whether they are necessary and / or sufficient.c)…arrow_forwardQ2. A company is producing 2200 plates per day. The direct material cost for producing 1200 plates is AED 5300/- Direct labor cost per day is AED 3200.00 and factory over head is AED 4200.00 . If the selling cost is 28 % of the factory cost , what must be the selling price of each plate to release a profit of 20 % of the selling price ?arrow_forwardA manufacturing plant has a potential production capacity of 1,000 units per month(capacity can be increased by 10 percent if subcontractors are employed). The plantis normally operated at about 80 percent of capacity. Operating the plant above this level significantly increases variable costs per unit because of the need to pay theskilled workers higher overtime wage rates. For output levels up to 80 percent ofcapacity, variable cost per unit is $100. Above 80 percent and up to 90 percent, variable costs on this additional output increase by 10 percent. When output is above90 percent and up to 100 percent of capacity, the additional units cost an additional25 percent over the unit variable costs for outputs up to 80 percent of capacity. Forproduction above 100 percent and up to 110 percent of capacity, extensive subcontracting work is used and the unit variable costs of these additional units are 50 percent above those at output levels up to 80 percent of capacity. At 80 percent…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Managerial Economics: Applications, Strategies an...EconomicsISBN:9781305506381Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. HarrisPublisher:Cengage Learning
Managerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage Learning
Managerial Economics: Applications, Strategies an...
Economics
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
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