Engineering Economy
16th Edition
ISBN: 9780133582819
Author: Sullivan
Publisher: DGTL BNCOM
expand_more
expand_more
format_list_bulleted
Question
Chapter 12, Problem 6P
To determine
Calculate the expected annual cost.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
St. John's Brewery (SJB) is getting ready for a busy tourist season. SJB wants to either increase production or produce the same
amount as last year, depending on the demand level for the coming season. SJB estimates the probabilities for high, medium
and low demands as 0.2, 0.3, and 0.5 respectively, on the basis of the number of tourists forecasted by the local recreational
bureau. If SJB increases production, the expected profits corresponding to high, medium and low demands are $750,000,
$325,000 and $100,000 respectively. If SJB does not increase production, the expected profits are $450,000, $325,000 and
$150,000 respectively. (NOTE: Text answers are case sensitive and the value of different parts of this question is indicated in
square brackets [*/*])
Construct a decision tree for SJB. On the basis of the EV, what should SJB do?
What is the expected value of increasing production?
What is the expected value of not increasing production?
Should SJB increase production (enter…
Question 16
The probability of an 60 year-old male living to 70 years old is equal to
in 2019. (Art_13_07_B)
78.2%
85.3%
70.2%
087.2%
Suppose that a certain state has 794,000 people. Let the gross income for the ith person be denoted by Gį, the taxes for
the ith person be denoted Ti, and the disposable income for the ith person be denoted D₁.
Suppose that the mean gross income per year is $50,000, and the average taxes per year is $7500.
(a) If the individual disposable income is the gross income minus taxes, write down the equation for D₁.
(b) Find the average disposable income per year for the entire state.
(c) Find the total taxes per year for the entire state, and the total gross income for year for the entire state.
(d) Find the total disposable income per year for the entire state.
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
- Question 5 A machine that produces a certain piece must be turned off by the operator after each piece is completed. The machine "coasts" for 15 seconds after it is turned off, thus preventing the operator from removing the piece quickly before producing the next piece. An engineer has suggested installing a brake that would reduce the coasting time to 3 seconds. The machine produces 50,000 pieces a year. The time to produce one piece is 1 minute 45 seconds, excluding coastint time. The operator earns $8 an hour and direct costs for operation are $5 an hour. The direct costs are incurred whenever the operator has to work. The brake will require servicing every 520 hours of operation. It will take the operator 30 minutes to perform the necessary maintenance and will require $42 in parts and material. The brake is expected to last 7,500 hours of operation (with proper maintenance) and will have no salvage value. How much could be spent for the brake if the Minimum Attractive Rate of…arrow_forwardLandberg Inc. is considering a project which would require a $1.85 million after-tax investment today (t = 0). The after-tax cash flows the factory generates will depend on whether the state imposes a new property tax. There is a 45% probability that the tax will pass. If the tax passes, the factory will produce after-tax cash flows of $40,000 at the end of each of the next 5 years. There is a 55% probability that the tax will not pass. If the tax does not pass, the factory will produce after-tax cash flows of $800,000 for the next 5 years. The project has a WACC of 10%. If the factory is unsuccessful, the firm will have the option to abandon the project 1 year from now if the tax passes. If the factory project is abandoned, the firm will receive the expected $40,000 cash flow at t = 1, and the property will be sold netting $900,000 (after taxes are considered) at t = 1. Once the project is abandoned, the company would no longer receive any cash inflows from it. What is the project's…arrow_forwardSelected members of a national organization of mathematics teachers were asked to decide on a location for its annual convention. Their votes are tallied below, Find the total number of votes of the winner using the approval voting. 30 10 15 20 15 5 5 Iloilo X X X X Baguio X X X X X Palawan X X X X Batangas X X Xarrow_forward
- Three alternative insulations are being considered for installation on a machine part. After the initial installation, if the insulation fails in any future year, it is replaced by an identical one at a cost lower than the initial cost. The costs and probabilities of failure in any year are given in the table below. Insulation thickness 2 inches 3 inches 6 inches Initial installation cost $900 $1,200 $1,800 Probability of failure in any given year 26.7% 14.4% 6.32% Replacement cost anytime insulation fails in future $600 $800 $1,200 If the analysis period is infinte (i.e, N = infinity), calculate the expected EUAC of the 2-inch insulation. The MARR is 11% per year. OA. $414 O B. $259 O C. $104 O D. $155arrow_forwardA buyer for an electrical component is searching for a supplier who has the best combination of low price, low order cycle time and low order cycle variability.Current uage for the component is 100 units per day. the buyer received data on four potineital suppliers (table) Based on the order cycle time, variability and unit price data provided in the table, which supplier should be awarded the component business?arrow_forwardAn investor purchases a share of Synovous Bank stock this morning for $2.80. The investor believes the economy will take one of three conditions in the coming year, and each condition will have an impact on the selling price of the stock. The investor's beliefs about the economy are shown below: OUTCOME: Probability Bad for Banks Moderate for Banks Good for Banks 0.37 Submit 0.38 0.25 What is the standard deviation for Synovous returns (based on the investor's returns)? Synovous Price in One Year $2.60 $2.96 $3.46 Answer format: Percentage Round to: 2 decimal places (Example: 9.24%, % sign required. Will accept decimal format rounded to 4 decimal places (ex: 0.0924))arrow_forward
- You may need to use the appropriate appendix table or technology to answer this question. Shoppers enter a mall at an average of 360 per hour. (Round your answers to four decimal places.) (a) What is the probability that exactly 15 shoppers will enter the mall between noon and 12:05 p.m.? 0.0010 (b) What is the probability that at least 70 shoppers will enter the mall between 5:00 and 5:10 p.m.? 0.0985 Xarrow_forwardpls help asap on botharrow_forward5arrow_forward
- Adbir Corporation produces jewelry container for Colmar Jewelry. The company produces their product in their small-scale production plant. The following information relates with standard requirement for each unit of the container. Direct materials Direct labor Variable overhead 2kg @ RM6.00 per kg 5 hours @ RM4.00 per hour 5 hours @ RM3 per hour The production of the product had a budgeted fixed overhead of RM570,000 per annum. Overhead were absorb based on direct labor hours with monthly budgeted production unit of 1,900 units. Actual data for production in March 2021 was recorded as follows: (i) The direct materials recorded and charged to production are 4,900kg at RM6.20 per kg. (ii) Direct labor involved in the production was paid RM4.50 per hour. A total of 9,800 hours was recorded for the job. (iii) Variable overhead incurred was RM29,500 and fixed overhead is RM47,000. (iv) Jewelry container produced are 2,000 units.arrow_forwardDecorators Co. got a 15-year loan from NatWest Bank in 2016 for an amount of £22 million. The loan was taken at an annual interest rate of 12%. After 5 years in 2021, Decorators Co. had managed to pay back £9.5million. Currently owing on the loan is the principal balance plus interest of £800,000. In 2021, the probability that Decorators Co. defaults on the loan is 4.5%, in the same year, if there is a default, NatWest bank expects that it will be able to recover 75% of the loan. Given the information above, you are required to determine: Exposure at default (EAD) Value of Loss given default value (LGD) Expected loss (EL)arrow_forwardA company that manufactures and sells T-shirts for sporting events, is providing shirts for an upcoming tournament. Each shirt will cost $7 to produce and will be sold for $13. Any unsold shirts at the end of the tournament can be sold for $5 apiece in the near future. The company assumes the demand for the shirts will be 1,500,3,000,4,500, or 6,000. The company also estimates that the probabilities of each of these sales levels occurring will be 20%, 25%,25%, and 30%, respectively. Determine the expected monetary value of the project if the company chooses to print 4,500 shirts for the tournament. The expected monetary value is---- (Type a whole number.)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: Applications, Strategies an...
Economics
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:Cengage Learning