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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Question
Chapter 12, Problem 5P
To determine
Calculate the present worth.
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There are four estimates made for the anticipated cycle time to produce a subcomponent. The estimates, in seconds, are 10, 20, 30, and 70. If the first two estimates have equal weights, which total 70%, and the last two are weighted equally with the remaining 30%, what is the expected time?
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…
An investment of 1 million dollars per year will avoid 1.5 billion dollars
of damage from global warming in 80 years. At a discount rate of 6%, is
the investment a good idea? (Hint: Assume you make 80 $1 million dollar
investments, with the first one a year from now and the last one in the 80th
year).
Chapter 12 Solutions
Engineering Economy, Student Value Edition (17th Edition)
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
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