Engineering Economy
16th Edition
ISBN: 9780133582819
Author: Sullivan
Publisher: DGTL BNCOM
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Chapter 3, Problem 2P
To determine
Write the cost and revenue types.
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Solve with complete solution and draw the cash flow diagram
You purchased a building five years ago for $200,000. Its annual maintenance expense has been $15,000 per year. At the end of three years, you spent $55,000 on roof repairs. At the end of five years (now), you sell the building for $250,000. During the period of ownership, you rented out the building for $60,000 per year paid at the beginning of each year. If your MARR is 8% per year.
a) Use the PW and AW methods to evaluate this investment. PW = $____ and AW = $____
b) Calculate IRR and ERR(( Ԑ=MARR). IRR = Blank ____% and ERR = Blank ____%
Note: For equivalent worth, round off the final answer to whole number. For Rate of Return, round off to two decimal places (in percentage)
Please don't use excel and show equations used.
A computer hardware firm sells both laptop computers and printers. It has a large inventory of
laptops and printers that it wants to sell, so it has not variable production cost. The firm has
determined that there are three type of consumers for its products
Laptop
Printer
Bundle (Laptop + printer)
Customer type A
$800
S100
$900
Customer type B
S1,000
$50
$1,050
Customer type C
S600
$150
$750
To simplify the analysis, you may assume that there is one customer of each type.
(a) If the firm were to charge only individual prices and not the bundle price, what price should it
charge for its laptops and what price should it charge for its printers in order to maximize
revenue? Assume that the firm has one customer of each type. Please explain.
(b) If the laptop and printer are bundled together, what price will the firm charge for the bundle
in order to maximize revenue? Assume that only the bundle is sold and the laptop and printer are
not available separately. Please explain.
(c) Assume…
Chapter 3 Solutions
Engineering Economy
Ch. 3 - Prob. 1PCh. 3 - Prob. 2PCh. 3 - Prob. 3PCh. 3 - Prob. 4PCh. 3 - Prob. 5PCh. 3 - Prob. 6PCh. 3 - Prob. 7PCh. 3 - Prepare a composite (weighted) index for housing...Ch. 3 - Prepare a composite (weighted) index for housing...Ch. 3 - Prob. 10P
Ch. 3 - Prob. 11PCh. 3 - Prob. 12PCh. 3 - Prob. 13PCh. 3 - Prob. 14PCh. 3 - Prob. 15PCh. 3 - A biotech firm is considering abandoning its old...Ch. 3 - Prob. 17PCh. 3 - Prob. 18PCh. 3 - Prob. 19PCh. 3 - Prob. 20PCh. 3 - Prob. 21PCh. 3 - Prob. 22PCh. 3 - Prob. 23PCh. 3 - Prob. 24PCh. 3 - Prob. 25PCh. 3 - Prob. 26PCh. 3 - Prob. 28SECh. 3 - Prob. 31CSCh. 3 - Prob. 32CSCh. 3 - Prob. 36FECh. 3 - Prob. 37FECh. 3 - Prob. 38FECh. 3 - Prob. 39FECh. 3 - Prob. 40FECh. 3 - Prob. 41FE
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