ENGINEERING ECONOMY DIGITAL ACCESS
ENGINEERING ECONOMY DIGITAL ACCESS
8th Edition
ISBN: 2810022611683
Author: Blank
Publisher: MCG
Question
Book Icon
Chapter 3, Problem 45P

(a):

To determine

Calculate the value x.

(a):

Expert Solution
Check Mark

Explanation of Solution

The cash flow is given in Table 1 as follows:

Year12345678
CF2,0002,200X2x2,8003,0003,2003,400

.

The equivalent annual value (A) of the cash flow is $30,000. Interest rate (i) is 10%. The time period (n) is 8 years.

The missed value of x can be calculated as follows:

A=(CF1(1+i)1+CF2(1+i)2+CF3(1+i)3+CF4(1+i)4+CF5(1+i)5+CF6(1+i)6CF7(1+i)7+CF8(1+i)8)(i(1+i)n(1+i)n1)30,000=(2,000(1+0.1)1+2,200(1+0.1)2+x(1+0.1)3+2x(1+0.1)4+2,800(1+0.1)5+3,000(1+0.1)6+3,200(1+0.1)7+3,400(1+0.1)8)(0.1(1+0.1)8(1+0.1)81)30,000=(2,0001.1+2,2001.21+x1.331+2x1.4641+2,8001.6105+3,0001.7716+3,2001.9487+3,4002.1436)(0.1(2.14359)2.143591)30,000=(1,818.1818+1,818.1818+0.75131x+1.36603x+1,738.5905+1,693.3845+1,642.1204+1,586.1168)(0.214361.14359)30,000=(10,296.5758+2.1173x)(0.187478)30,0000.187444=(10,296.5758+2.1173x)

160,047.8009=(10,296.5758+2.1173x)2.1173x=160,047.800910,296.5758x=149,751.22512.1173=70,727.45

The value of x is $70,727.45.

(b):

To determine

Calculate the value of x through spreadsheet.

(b):

Expert Solution
Check Mark

Explanation of Solution

ENGINEERING ECONOMY DIGITAL ACCESS, Chapter 3, Problem 45P

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!
Students have asked these similar questions
Please answer questions D-H, I have already answered A , B,C but it may help you to still solve them yourself. Thank you!
2. A firm’s production function is given by:Q = 10KLThe unit capital and labour costs are 2 and 1 pounds respectively. The firm is contracted to produce2000 units.(a) Write out the optimisation problem of the firm. (b) Express this problem using a Lagrangian function. (c) Find values of K and L which fulfil the contract with minimal cost to the firm. (d) Calculate the total cost to the firm.
3. Consider the following estimated regression equation, estimated using a sample of firms, where RDis total firm spending on research and development in USD ($), Revenue is total firm revenuein USD ($), and W ages is the firms’ total spending on wages in USD ($) (standard errors inparentheses):RDd = 1000(600)+ 0.5(0.1)Revenue + 1.5(0.5)W ages,(a) Interpret the coefficients on each of the explanatory variables. (b) Which of the three coefficients are statistically significant at the 5% level of significance? Howdo you know? A researcher runs a two-sided statistical test of the null hypothesis that both the coefficients onthe explanatory variables above are jointly equal to 0.25 (mathematically, that β1 = β2 = 0.25),and reports a p-value of 0.045.(c) What does this p-value mean for the outcome of the test? (d) What would an appropriate two-sided alternative hypothesis look like?
Knowledge Booster
Background pattern image
Similar questions
SEE MORE QUESTIONS
Recommended textbooks for you
Text book image
ENGR.ECONOMIC ANALYSIS
Economics
ISBN:9780190931919
Author:NEWNAN
Publisher:Oxford University Press
Text book image
Principles of Economics (12th Edition)
Economics
ISBN:9780134078779
Author:Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:PEARSON
Text book image
Engineering Economy (17th Edition)
Economics
ISBN:9780134870069
Author:William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:PEARSON
Text book image
Principles of Economics (MindTap Course List)
Economics
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Text book image
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
Text book image
Managerial Economics & Business Strategy (Mcgraw-...
Economics
ISBN:9781259290619
Author:Michael Baye, Jeff Prince
Publisher:McGraw-Hill Education