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 61P
To determine
Calculate the present worth.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
What is FW of Design A, Design B, and Design C. Which alternative should be chosen. Do not round off in the solution.
Based on the incremental return shown and the
company's MARR of 16% per year, the alternative
that should be selected is _____
The project initial costs are such that A < C < B.
Comparison Rate of Return, %
(A-DN)
(B-DN)
(C-DN)
(B-A)
(C-A)
(B-C)
Alternative C
Do nothing
Alternative B
Alternative A
Cannot be determined.
17
25
19
14
18
12
Dexcon Technologies, Inc. is evaluating two alternatives to produce its new plastic filament with tribological (i.e., low friction) properties for creating custom bearings for 3-D printers. The estimates associated with each alternative are shown below. Using a MARR of 20% per year, which alternative has the lower present worth? Method DDM LS First cost, $ −164,000 −370,000 M&O cost, $/year −55,000 −21,000 Salvage value, $ 0 30,000 Life, years 2 4
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
- Two methods can be used for producing expansion anchors. Method A costs $80,000 initially and will have a $15,000 salvage value after 3 years. The operating cost with this method will be $30,000 per year. Method B will have a first cost of $120,000, an operating cost of $8000 per year, and a $40,000 salvage value after its 3-year life. At the MARR of 12% per year, which method should be used on the basis of a present worth analysis?arrow_forwardYou have been asked to evaluate two alternatives, X and Y, that may increase plant capacity for manufacturing high-pressure hydraulic hoses. The parameters associated with each alternative have been estimated. Which one should be selected on the basis of a present worth comparison at an interest rate of 12% per year? Why is yours the correct choice? Alternative X Y First cost, $ −45,000 −58,000 Maintenance cost, $/year −8,000 −4,000 Salvage value, $ 2,000 12,000 Life, years 5 5arrow_forwardHand written solutions are strictly prohibitedarrow_forward
- For 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_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_forwardDexcon Technologies, Inc., is evaluating two alternatives to produce its new plastic filament with low friction properties for creating custom bearings for 3-D printers. The estimates associated with each alternative are shown below. Using a MARR of 16% per year, which alternative has the better present worth and what is that value (select the closest value)? Method First Cost AOC, per Year Salvage Value Life DDM $170,000 $65,000 $4,000 2 years LS $350,000 $40,000 $29,000 4 years DDM with a PW--$473,000 LS with a PW --$445,900 LS with a PW --$222,055 DDM with a PW--$109,300arrow_forward
- Answer please and take likearrow_forwardThe price of a car you want is $42,000 today. Its price is expected to increase by $1000 each year. You now have $25,000 in an investment account, which is earning 10% per year. How many years will it be before you have enough to buy the car without borrowing any money? Solve by (a) trial and error, and (b) by spreadsheet.arrow_forwardAssume you have a total of $200,000 to invest in two corporate stocks identified as Z1 and Z2. The overall rate of return you require on the $200,000 is 26% per year. (a) If $40,000 is invested in Z2 with an estimated i * Z2 of 14% per year, what value must i * Z1 exceed to realize at least 26% per year? (b) If the best return expected from the Z1 stock is 27%, determine the threshold level of investment in Z2 to maintain an overall ROR of 26% per year. Solve by hand or using Goal Seek, as instructed.arrow_forward
- Five mutually exclusive cost alternatives that have infinite lives are under consideration for decreasing the fruit-bruising rates of a thin skin-fruit grading and packing operation (peaches, pears, apricots, etc.). The initial costs and cash flows of each alternative are available. If the MARR is 15% per year, the one alternative to select is: Alternative A B C D E Initial cost, $ −11,000 −12,000 −9,000 −14,000 −15,000 Cash flow, $ per year −1000 −900 −1400 −700 −300 (a) A (b) B (c) D (d) Earrow_forwardAn automobile leasing company has a contract with a new car dealer to do major repairs for $720 per car. The leasing company estimates that for $400,000, it could buy equipment to service their own cars at a cost of $300 per car. If the equipment will have a salvage value of 10% of its first cost after 15 years, the minimum number of cars that must require major servicing each year to justify the equipment at a MARR of 10% per year is closest to: (a) 88 (b) 122 (c) 128 (d) 143arrow_forwardAlternative R has a first cost of $73,000, annual M&O costs of $52,000, and a $20,000 salvage value after 5 years. Alternative S has a first cost of $175,000 and a $43,000 salvage value after 5 years, but its annual M&O costs are not known. Determine the M&O costs for alternative S that would yield a required incremental rate of return of 29%. The M&O cost for alternative S is $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:PEARSON
Engineering 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 Learning
Managerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage Learning
Managerial 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