Engineering Economy (17th Edition)
17th Edition
ISBN: 9780134870069
Author: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher: PEARSON
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Chapter 12, Problem 9P
To determine
Calculate the standard deviation.
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Suppose you are considering an investment
project that requires $800.000, has a six-year life,
and has a salvage value of $100,000. Sales volume
is projected to be 65,000 units per year. Price per
unit is $63, variable cost per unit is $42, and fixed
costs are $532,000 per year. The depreciation
method is a five-year SL and assume MARR 10%.
(a) Determine the break-even sales volume. (b)
Calculate the cash flows of the base case over six
years and its NPW. (c) lf the sales price per unit
increases to $400, what is the required break-even
volume? (d) Suppose the projections given for
price, sales volume, variable costs, and fixed costs
are all accurate to within + 15%. What would be
the NPW figures of the best-case and worst-case
scenarios?
Peachtree Construction Company, a highway contractor, is considering the purchase of a new trench excavator that costs 300000 and can dig a 3-foot-wide trench at the rate of 16 feet per hour. The contractor gets paid according to the usage of the equipment, 100 per hour. The expected average annual usage is 500 hours, and maintenance and operating costs will be 10 per hour. The contractor will depreciate the equipment by using a five-year MACRS, units-of-production method. At the end of five years, the excavator will be sold for 100000. Assuming the contractor’s marginal tax rate is 25% per year, determine the annual after-tax cash flow. In excel.
has a cost of $53,600, lasts 9 years with no salvage value, and costs $150,000 per year in operating expenses. It is in the 3-year property class. Investment B has a cost of $84,500.00, lasts 9 years with no salvage value, and costs $125,000 per year. Investment B, however, is in the 7-year property class. The company marginal tax rate is 25%, and MARR is an after-tax 10%.
Based upon the use of MACRS-GDS depreciation, compare the AW of each alternative.AWA = $enter a dollar amount AWB = $enter a dollar amount Which should be selected?
What must be Investment B's cost of operating expenses for these two investments to be equivalent? $enter a dollar amount
Chapter 12 Solutions
Engineering Economy (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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