Engineering Economy, Student Value Edition (17th Edition)
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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Chapter 3, Problem 40FE
To determine

Maximum acceptable price.

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A car rental agency is considering a modification in its oil change procedure. Currently, it uses a Type X filter, which costs $4.75 and must be changed every 9,000 miles along with the oil (5 quarts). Between each oil change, one quart of oil must be added after each 500 miles. The proposed filter (Type Y) has to be replaced every 6,000 miles (along with 5 quarts of oil) but does not require any additional oil between filter changes. If the oil costs $1.19 per quart, what is the maximum acceptable price for the Type Y filter? Choose the correct answer below. A. The maximum acceptable price for the Type Y filter is $29.34. B. The maximum acceptable price for the Type Y filter is $14.67. C. The maximum acceptable price for the Type Y filter is $40.45. OD. The maximum acceptable price for the Type Y filter is $22.01.
A company produces and sells a consumer product and is ableto control the demand by varying the selling price. The approximate relationship between price and demand is p = 38+ (2,700/D) - (5000/D²) for D>1 The company is seeking to maximize its profit. The fixed cost is $1,000 and the variable cost is $ 40 per unit. What is the number of units that should be produced and sold each month to maximize profit? A 71 B 60 с 50 D 25
Jenny Tanaka wants to buy a new car, and the annual gasoline expense is a major consideration. Her present car gets 25 miles per gallon (mpg), and she is considering purchasing a new car that gets 40 mpg. Jenny now drives about 12,000 miles per year and pays $3.25 per gallon of gasoline. She therefore calculates an annual gasoline consumption of 480 gallons for her 25 mpg car (12,000 miles/25 mpg) compared to 300 gallons consumed per year for the 40 mpg car (12,000 miles/40 mpg). Since driving the higher- mileage car would use 180 gallons less per year, Jenny estimates the new car will save her $585 in gasoline expense per year (180 gallons 3 $3.25 per gallon). Suppose Jenny buys the 40 mpg car. According to economic theory, Jenny's actual annual savings on gasoline will be 7 1 C 1 U C VI 10 V K W S TACAZEC 10 GUNS TOMBER 2 than her initial estimate of $585.
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