Engineering Economy, Student Value Edition (17th Edition)
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 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.

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= 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.]
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