Basics Of Engineering Economy
2nd Edition
ISBN: 9780073376356
Author: Leland Blank, Anthony Tarquin
Publisher: MCGRAW-HILL HIGHER EDUCATION
expand_more
expand_more
format_list_bulleted
Question
Chapter 4, Problem 57P
To determine
Calculate the capitalized cost.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
A new highway is to be constructed. Design A calls for a concrete pavement costing $90 per foot with a
12-year life; two paved ditches costing $4 per foot each; and two box culverts every mile, each costing
$7,000 and having a 12-year life. Annual maintenance will cost $1,700 per mile; the culverts must be
cleaned every three years at a cost of $550 each per mile.
Design B calls for a bituminous pavement costing $40 per foot with a 6-year life; three sodded ditches
costing $1.50 per foot each; and three pipe culverts every mile, each costing $2,100 and having a 6-year
life. The replacement culverts will cost $2,350 each. Annual maintenance will cost $2,600 per mile; the
culverts must be cleaned yearly at a cost of $230 each per mile; and the annual ditch maintenance will
cost $1.30 per foot per ditch.
Compare the two designs on the basis of equivalent worth per mile for a 12-year period. Find the most
economical design on the basis of AW and PW if the MARR is 6% per year.
Click the…
Find both for design A and B then decide which one is the most economical, thank you.
A new highway is to be constructed. Design A calls for a concrete pavement costing $85 per foot with a 16-year life; three paved ditches costing $4 per foot each; and four box culverts every mile, each costing $8,000 and having a
16-year life. Annual maintenance will cost $1,700 per mile; the culverts must be cleaned every four years at a cost of $400 each per mile.
Design B calls for a bituminous pavement costing $40 per foot with a 8-year I four sodded ditches costing $1.45 per foot each; and two pipe culverts every mile, each costing $2,200 and having a 8-year life. The replacement
culverts will cost $2,500 each. Annual maintenance will cost $2,600 per mile; the culverts must be cleaned yearly at a cost of $220 each per mile; and the annual ditch maintenance will cost $1.65 per foot per ditch.
Compare the two designs on the basis of equivalent worth per mile for a 16-year period. Find the most economical design on the basis of AW and PW if the MARR is 8% per year.
Click the icon to…
Chapter 4 Solutions
Basics Of Engineering Economy
Ch. 4 - State two conditions under which the do-nothing...Ch. 4 - Prob. 2PCh. 4 - Prob. 3PCh. 4 - Prob. 4PCh. 4 - Prob. 5PCh. 4 - Prob. 6PCh. 4 - Prob. 7PCh. 4 - Prob. 8PCh. 4 - Prob. 9PCh. 4 - The costs associated with manufacturing a...
Ch. 4 - Prob. 11PCh. 4 - Prob. 12PCh. 4 - Prob. 13PCh. 4 - Prob. 14PCh. 4 - Prob. 15PCh. 4 - Prob. 16PCh. 4 - Prob. 17PCh. 4 - Prob. 18PCh. 4 - Prob. 19PCh. 4 - Prob. 20PCh. 4 - Prob. 21PCh. 4 - Prob. 22PCh. 4 - Prob. 23PCh. 4 - Prob. 24PCh. 4 - Prob. 25PCh. 4 - Prob. 26PCh. 4 - Prob. 27PCh. 4 - Prob. 28PCh. 4 - Prob. 29PCh. 4 - Prob. 30PCh. 4 - Prob. 31PCh. 4 - Two mutually exclusive projects have the estimated...Ch. 4 - Prob. 33PCh. 4 - Prob. 34PCh. 4 - Prob. 35PCh. 4 - Prob. 36PCh. 4 - Prob. 37PCh. 4 - The manager of engineering at the 900-megawatt...Ch. 4 - Prob. 39PCh. 4 - Prob. 40PCh. 4 - Prob. 41PCh. 4 - Three different plans were presented to the GAO by...Ch. 4 - The U.S. Army received two proposals for a turnkey...Ch. 4 - Prob. 44PCh. 4 - Prob. 45PCh. 4 - Prob. 46PCh. 4 - Prob. 47PCh. 4 - Prob. 48PCh. 4 - Prob. 49PCh. 4 - Prob. 50PCh. 4 - Prob. 51PCh. 4 - Prob. 52PCh. 4 - Prob. 53PCh. 4 - Prob. 54PCh. 4 - Prob. 55PCh. 4 - Prob. 56PCh. 4 - Prob. 57PCh. 4 - Prob. 58PCh. 4 - Prob. 59PCh. 4 - Prob. 60PCh. 4 - Prob. 61PCh. 4 - Prob. 62PCh. 4 - Prob. 63APQCh. 4 - Prob. 64APQCh. 4 - Prob. 65APQCh. 4 - Prob. 66APQCh. 4 - Prob. 67APQCh. 4 - Prob. 68APQCh. 4 - Prob. 69APQCh. 4 - Prob. 70APQCh. 4 - Prob. 71APQ
Knowledge Booster
Similar questions
- Ken Allen, capital budgeting analyst for Bally Gears, Inc., has been asked to evaluate a proposal. The manager of the automotive division believes that replacing therobotics used on the heavy truck gear line will produce total benefits of $516,000 (in today's dollars) over the next 5 years. The existing robotics would produce benefits of $387,000 (also in today's dollars) over that same timeperiod. An initial cash investment of $206,400 would be required to install the new equipment. The manager estimates that the existing robotics can be sold for $72,000. Show how Ken will apply marginal cost-benefit analysistechniques to determine the following:a. The marginal benefits of the proposed new robotics.b. The marginal cost of the proposed new roboticsc. The net benefit of the proposed new robotics.arrow_forwardYour brother, a new college graduate, wants to be his own boss. He wants to open a restaurant in a small strip center or acquire and operate a food truck, an increasingly popular mode of eating, especially in larger cities. The restaurant space can be rented for $2200 per month. Modest furnishings and used equipment will have a first cost of $26,000. Income is expected to be $15,100 per month, with expenses for utilities, labor, taxes, etc. expected to average $3700 per month. Alternatively, a kitchen-ready food truck will cost $17,900 to purchase and $900 per month to operate. Income is expected to be $6300 per month. If the salvage values are assumed to be 10% of the first cost for the restaurant and 35% of the first cost of the truck after a 5-year planning period, which alternative is better on the basis of an AW(per month) comparison at an interest rate of 12% per year, compounded monthly?arrow_forwardKen Allen, capital budgeting analyst for Bally Gears, Inc., has been asked to evaluate a proposal. The manager of the automotive division believes that replacing the robotics used on the heavy truck gear line will produce total benefits of $560,000 (in today's dollars) over the next 5 years. The existing robotics would produce benefits of $400,000 (also in today's dollars) over that same time period. An initial cash investment of $220,000 would be required to install the new equipment. The manager estimates that the existing robotics can be sold for $70,000. Show how Ken will apply marginal cost-benefit analysis techniques to determine the following: The marginal (added) benefits of the proposed new robotics is $______________ The marginal (added) cost of the proposed new robotics is $__________________ The net benefit of the proposed new robotics isarrow_forward
- What is FW of Design A, Design B, and Design C. Which alternative should be chosen. Do not round off in the solution.arrow_forwardYour brother, a new college graduate, wants to be his own boss. He wants to open a restaurant in a small strip center or acquire and operate a food truck, an increasingly popular mode of eating, especially in larger cities. The restaurant space can be rented for $2200 per month. Modest furnishings and used equipment will have a first cost of $26,000. Income is expected to be $14,100 per month, with expenses for utilities, labor, taxes, etc. expected to average $3700 per month. Alternatively, a kitchen-ready food truck will cost $17,900 to purchase and $900 per month to operate. Income is expected to be $6200 per month. If the salvage values are assumed to be 10% of the first cost for the restaurant and 35% of the first cost of the truck after a 5-year planning period, which alternative is better on the basis of an annual worth comparison at an interest rate of 12% per year, compounded monthly? Also, write the spreadsheet functions to find the AW values.arrow_forwardSix sites have been identified for a parking lot in downtown Beirut. Because the sites are plots of land, their salvage value and investment cost are identical. A 10-year study period has been specified, and the MARR is 18% per year. (Figures below are in thousands of dollars). Press A B C D E F Capital Investment $100 $150 $250 $400 $500 $700 Annual Revenues minus Expenses $15 $37.5 $50 $92.5 $112.5 $142.5 If the MARR=18%, Which site should be chosen ? On the same excel spreadsheet use the following methods: a- Present Worth b- Annual Worth C- IRRarrow_forward
- An industrial coal-fired boiler for process steam is equipped with a 10-year-old electrostatic precipitator (ESP). Changes in coal quality have caused stack emissions to be in noncompliance with federal standards for particulates. Two mutually exclusive alternatives have been proposed to rectify this problem (doing nothing is not an option). The MARR is 9% per year. Make a recommendation regarding which alternative to select. 3. An industrial coal-fired boiler for process steam is equipped with a 10-year-old electrostatic precipitator (ESP). Changes in coal quality have caused stack emissions to be in noncompliance with federal standards for particulates. Two mutually exclusive alternatives have been proposed to rectify this problem (doing nothing is not an option). Capital investment Annual operating expenses Useful Life New Baghouse $1,140,000 $115,500 10 years New ESP $992,500 $73,200 10 years The MARR is 9% per year. Make a recommendation regarding which alternative to select.arrow_forwardFor the two alternatives, demonstrate that the sum of the incremental cash flow series (Z − X) over the LCM is equal to the difference in the sums of the individual cash flow series for X and Z. System X Z First cost, $ −40,000 −95,000 AOC, $ per year −12,000 −5,000 Salvage value, $ 6,000 14,000 Life, years 3 6arrow_forwardA former student of an engineering department wishes to donate to the department's scholarship fund. Three options are available: Plan A: $60,000 now Plan B: $15,000 per year for 8 years beginning year 1 from now Plan C: $50,000 three years from now and another $80,000, five years from now. From the department's perspective, it wants to select the plan that maximizes the buying power of the dollars received. The department head asked the engineering professor evaluating the plans to account for inflation in the calculations. If the donation earns a real 10% per year and the inflation rate is expected to average 3% per year, which plan should be accepted? O Barrow_forward
- BREAK-EVEN ANALYSIS Consider a hybrid vehicle with a price of $30,000. This vehicle will average 30 miles per gallon of gasoline. A comparably equipped gasoline-only vehicle will cost $28,000 and will average 25 miles per gallon of gasoline. Assuming an interest rate of 3% per year and a study period of five years, find the breakeven cost of gasoline ($/gal) if the vehicle will be driven 18,000 miles each year.arrow_forwardDon't answer by pen paper and don't use Excelarrow_forwardCtrl 24 Calculate the perpetual equivalent annual cost (years 1 through infinity) of $5 million in year 0, $2 million in year 10, and $100,000 in years 11 through infinity. Use an interest rate of 10% per year. 27 A new bridge across the Allegheny River in Pittsburgh is expected to be permanent and will have an initial cost of $30 million. This bridge must be resurfaced every 5 years at a cost of $1 million.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Principles of Economics (12th Edition)EconomicsISBN:9780134078779Author:Karl E. Case, Ray C. Fair, Sharon E. OsterPublisher:PEARSONEngineering Economy (17th Edition)EconomicsISBN:9780134870069Author:William G. Sullivan, Elin M. Wicks, C. Patrick KoellingPublisher:PEARSON
- Principles of Economics (MindTap Course List)EconomicsISBN:9781305585126Author:N. Gregory MankiwPublisher:Cengage LearningManagerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage LearningManagerial Economics & Business Strategy (Mcgraw-...EconomicsISBN:9781259290619Author:Michael Baye, Jeff PrincePublisher:McGraw-Hill Education
Principles of Economics (12th Edition)
Economics
ISBN:9780134078779
Author:Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:9780134870069
Author:William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-...
Economics
ISBN:9781259290619
Author:Michael Baye, Jeff Prince
Publisher:McGraw-Hill Education