Contemporary Engineering Economics (6th Edition)
6th Edition
ISBN: 9780134105598
Author: Chan S. Park
Publisher: PEARSON
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Chapter 16, Problem 14P
To determine
Selection of the alternate.
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A car is needed for three years. Plans A and B for acquiring the car are being evaluated. An effective annual interest rate of 10% is to be used. Which plan is economically superior?
Plan A: Lease the car for $0.25/mile (all inclusive)
Plan B: Purchase the car for $30,000. Keep the car for three years. Sell the car after three years for $7200. Pay $0.14 per mile for oil and gas. Pay other costs of $500 per year.
Using exactly the same information from Problem No. 1 above, calculate the Annual Worth of Project Y at 8% per year interest rate. You can see the data in picture one, answer the problem in the second picture.
The following alternatives are available to accomplish an objective of 12 years
duration:
Metal
$25,000
Metal and Concrete
$50,000
30 years
$0
$2,800
Life cycle
Period before replacement
Salvage value
Annual maintenance
Compare the present worth of the alternatives using an interest rate of 7%.
20 years
$5,000
$5,500
Chapter 16 Solutions
Contemporary Engineering Economics (6th Edition)
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