Basics Of Engineering Economy
Basics Of Engineering Economy
2nd Edition
ISBN: 9780073376356
Author: Leland Blank, Anthony Tarquin
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Chapter 5, Problem 29P
To determine

Calculate the annual worth.

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The owner of the AnJ Theater is considering two proposals for upgrading the parking ramps. The first proposal involves asphalt paving of the entire parking area. The initial cost of this proposal would be $ 35000, and it would require annual maintenance of $250 beginning 3 years after installation. The owner expects to have to resurface the theater in 10 years. Resurfacing will cost only $8000, since grading and surface preparation are not necessary, but the $250 annual maintenance cost will continue. Alternatively, gravel can be purchased and spread in the drive areas and grass planted in the parking areas. The owner estimates that 29 metric tons of gravel will be needed per year starting 1 year from now at a cost of $90 per metric ton. In addition, a riding lawn mower, which will cost $2500 and have a life of 10 years, will be needed now. The cost of  labor for spreading gravel, cutting grass, etc., is expected to be $900 the first year, $950 the second year and will increase by $50…
Poly-Chem Plastics is considering two types of Injection molding machines: hydraulic and electric. The hydraulic press (HP) will have a first cost of $630,000, annual costs of $200,000, and a salvage value of $70,000 after 5 years. Electric machine technology (EMT) will have a first cost of $800,000, annual costs of $132,000, and a salvage value of $130,000 after 5 years. NOTE: This is a multi-part question. Once an answer is submitted, you wll be unable to return to this part. Use an AW-based equation to determine the ROR on the extra investment required for the EMT alternative. The ROR on the extra investment for the EMT alternative is %.
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