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
Videos
Textbook Question
Chapter 5, Problem 19P
Estimates have been presented to Holly Farms, which is considering two environmental chambers for a project that will detail laboratory confirmations of on-line bacteria tests in chicken meat for the presence of E. coli 0157:H7 and Listeriamono-cytogenes. (a) If the project will last for 6 years and i = 10% per year, perform an AW evaluation to determine which chamber is more economical. (b) Chamber D103 can be purchased with different options and, therefore, at different installed costs. They range from $300,000 to $500,000. Will the selection change if one of these other models is installed? (c) Use single-cell spreadsheet functions to solve part (b).
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Please help.
A large textile company is trying to decide among three alternatives of sludge dewatering g, processes. The costs
associated with these alternatives are shown below. Alternative Y will need an upgrade of $9700 at the end of year 2. At
the end of year 2, alternative Z would be replaced with another alternative Z having the same installed and operating
costs. If the MARR is 14% per year, which alternative should be chosen? \table[[Alternative,x,Y,Z
6) A large textile company is trying to decide among three alternatives of sludge dewatering
processes. The costs associated with these alternatives are shown below. Alternative Y
will need an upgrade of $9700 at the end of year 2. At the end of year 2, alternative Z
would be replaced with another alternative Z having the same installed and operating
costs. If the MARR is 14% per year, which alternative should be chosen?
Alternative
X
Y
Z
Installed costs
$68,500
$48,500 $33,500
Annual operating costs.
$6000
$4000
$5000
Overhaul cost in year 2…
A construction company is planning to invest for the purchase of a heavy construction
equipment which will be used at a construction site. There are three feasible alternatives
and the detailed cash flow of all the alternatives are presented in the table. Each
alternative has the useful life of 8 years. If the company's MARR is 12% per year, use an
appropriate rate of return method to determine which alternative, if any, the company
should choose.
Alternatives
1
2
3
Initial investment
($)
2 700 000
3 200 000
2 400 000
Annual saving Salvage value Useful life
(Years)
($)
525 000
640 000
415 000
($)
710 000
860 000
590 000
8
8
8
Chapter 5 Solutions
Basics Of Engineering Economy
Ch. 5 - Prob. 1PCh. 5 - Prob. 2PCh. 5 - Prob. 3PCh. 5 - Prob. 4PCh. 5 - Prob. 5PCh. 5 - Prob. 6PCh. 5 - Prob. 7PCh. 5 - Prob. 8PCh. 5 - Prob. 9PCh. 5 - Prob. 10P
Ch. 5 - Two machines with the following cost estimates are...Ch. 5 - Prob. 12PCh. 5 - Prob. 13PCh. 5 - Prob. 14PCh. 5 - Prob. 15PCh. 5 - Prob. 16PCh. 5 - Prob. 17PCh. 5 - Prob. 18PCh. 5 - Estimates have been presented to Holly Farms,...Ch. 5 - Prob. 20PCh. 5 - Prob. 21PCh. 5 - Prob. 22PCh. 5 - Prob. 23PCh. 5 - Prob. 24PCh. 5 - Prob. 25PCh. 5 - Prob. 26PCh. 5 - A major repair on the suspension system of Janes...Ch. 5 - Prob. 28PCh. 5 - Prob. 29PCh. 5 - Prob. 30PCh. 5 - Prob. 31PCh. 5 - Prob. 32APQCh. 5 - Prob. 33APQCh. 5 - Prob. 34APQCh. 5 - Prob. 35APQCh. 5 - Prob. 36APQCh. 5 - The AW values of three revenue alternatives are ...Ch. 5 - Prob. 38APQCh. 5 - Prob. 39APQCh. 5 - Use an interest rate of 10% per year. The...Ch. 5 - Prob. 41APQCh. 5 - Prob. 42APQ
Additional Business Textbook Solutions
Find more solutions based on key concepts
Consider the cash flows from an investment project. (a) Compute the net present worth of the project at i = 10%...
Contemporary Engineering Economics (6th Edition)
Using the midpoint formula, calculate elasticity for each of the following changes in demand.
Principles of Economics (12th Edition)
If a 3-percent increase in the price of corn flakes causes a 6-percent decline in the quantity demanded, what i...
Microeconomics (9th Edition) (Pearson Series in Economics)
Drought cuts the quantity of wheat grown by 2 percent. If the price elasticity of demand for wheat is 0.5, by h...
Foundations of Economics (8th Edition)
Assume the United States is an importer of televisions and there are no trade restrictions. US consumers buy 1 ...
Principles of Microeconomics (MindTap Course List)
Explain how to derive a total expenditures (TE) curve.
Macroeconomics (Book Only)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Similar questions
- QUESTION: To improve package tracking at a UPS transfer facility, conveyor equipment was upgraded with RFID sensors at a cost of $300 and has a useful life of 3 years. The operating cost is expected to be $150 per year. The salvage value of the equipment is expected to be $140 for the first 2 years, but due to obsolescence, it won't have a significant value after that. At an interest rate of 10% per year, (a) The economic service life of the equipment and associated annual worth (b) The percentage increase in the AW of cost if the equipment is retained 1 years longer than the ESL determinearrow_forwardThree years ago Chicago's O'Hare Airport purchased a new fire truck. Because of flight in- creases, new fire-fighting capacity is needed once again. An additional truck of the same capac- ity can be purchased now, or a double-capacity truck can replace the current fire truck. Esti- mates are presented below. Compare the options at 12% per year using (a) a 12-year study period and (b) a 9-year study period. Presently owned First cost P, S AOC, S Market value, S Salvage value, $ Life, years -151,000 (3 years ago) -1,500 70,000 10% of P 12 New Purchase -175,000 -1,500 12% of P 12 Double Capacity - 190,000 -2,500 10% of P 12arrow_forwardConcurris Prototyping is committed to using the newest and finest equipment in its labs. Accordingly, Wilma, a senior engineer, has recommended that a 2-year-old piece of precision measurement equipment be replaced immediately. She believes it can be demonstrated that the proposed equipment is economically advantageous at a 15% per year return and a planning horizon of 5 years Perform the replacement analysis using the annual worth method. a 5-year study period, and the estimates below. Was Wilma correct? Equipment Proposed 42,000 Original purchase price. S Current market value, S Remaining life, years stimated value in 5 years, S Salvage value after 15 years. S AOCES per year The AW of the defender a $- Wilma Click to select correct Current -30,000 15.000 5 2000 -13.000 15 30.000 5.000 -3,000 and the AW of the challenger is $-arrow_forward
- 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 17.00% per year, which alternative has the lower present worth? (Include a minus sign if necessary.) Method First Cost DDM $-220000 LS $-420000 M&O Cost, per Year Salvage Value $-50000 $6000 Life 2 years The present worth for the DDM method is $ The present worth for the LS method is $ The (Click to select) method is selected. (Click to select) DDM LS $-15000 $25000 4 yearsarrow_forwardDexcon 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 15% per year, which alternative has the lower present worth? Method First Cost M&O Cost, per Year Salvage Value Life DDM $-240,000 $-30,000 $2,000 2 years LS $-480,000 $-15,000 $23,000 4 years The present worth for the DDM method is $ The present worth for the LS method is $ The (Click to select) v method is selected.arrow_forwardA company that manufactures clear PVC pipes is investigating the production options of batch and continuous processing. Estimated cash flows are: Batch Process First cost ($) Annual cost ($ per year) Salvage value, any year, Continuous -69,000 -48,000 -140,000 -31,000 20,000 25,000 Life (years) 3-10 The chief operating officer (COO) has asked you to determine if the batch option, using an interest rate of 15% per year, would ever have an annual worth lower than that of the continuous flow system. The continuous flow process was previously determined to have Its lowest cost over a 5-year life cycle, but the batch process can be used from 3 to 10 years. If selecting the batch process is sensitive to its useful life, what is the minimum life that makes It more attractive? The batch system will be less expensive than the continuous flow if it lasts over years.arrow_forward
- oncurris Prototyping is committed to using the newest and finest equipment in its labs. Accordingly, Wilma, a senior engineer, has recommended that a 2 -year-old piece of precision measurement equipment be replaced immediately. She believes it can be demonstrated that the proposed equipment is economically advantageous at a 15%-per year return and a planning horizon of 5 years. Perform the replacement analysis using the annual worth method, a 5 -year study period, and the estimates below. Was Wilma correct? \table[[Equipment,Current,Proposed],[Original purchase price, $,-30,000,-42,000arrow_forwardCompare three alternatives on the basis of their capitalized costs at i= 8.00% per year and select the best alternative. (Include a minus sign if necessary.) Alternative E First Cost $-75000 AOC, per Year $-70000 Salvage Value $16000 Life, Years 2 The capitalized cost of alternative E is $-214212.68 X 9 and alternative G is $ -971460.48 9 F $-420000 $-14000 $66000 4 The best alternative is G G $-920000 $-5000 $750000 ∞ alternative F is $-515145.86 Xarrow_forwardVirgin Galactic is considering two materials for certain parts in a re-useable space vehicle: carbon fiber reinforced plastic (CFRP) and fiber reinforced ceramic (FRC). The costs are shown below. Which should be selected on the basis of a present worth comparison at an interest rate of 10% per year? Solve using (a) tabulated factors, and (b) single-cell spreadsheet functions.arrow_forward
- A 50m2 apartment is for sale for $50,000 down payment plus $100,000 at the end of 1 year. The seller even offers the cash payment opportunity for which he asks for $124,000. If the market interest rate is 2.5% per month, what is the best alternative?arrow_forwardA company that manufactures magnetic flow meters expects to undertake a project that will have the cash flows estimated. First cost, $ −900,000 Equipment replacement cost in year 2, $ −300,000 Annual operating cost, $/year −950,000 Salvage value, $ 250,000 Life, years 4 At an interest rate of 10% per year, what is the equivalent annual cost of the project? Find the AW value using tabulated factors. The equivalent annual cost of the project is $− . Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.arrow_forwardAn assembly operation at a software company now requires $100,000 per year in labor costs. A robot can be purchased and installed to automate this operation. The robot will cost $200,000. Maintenance and operation expenses of the robot are estimated to be $64,000 per year for the first 2 years and $10,000 thereafter. Replacement of minimal parts will cost $5000 every 3 years. Invested capital must earn at least 12% per year. What is the capitalized cost? (Draw cash flow diagram and show complete solution)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
Difference between Renewable and Nonrenewable Resources; Author: MooMooMath and Science;https://www.youtube.com/watch?v=PLBK1ux5b7U;License: Standard Youtube License