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 5, Problem 29P
To determine
Calculate the annual worth.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
only typed solution
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
%.
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
Knowledge Booster
Similar questions
- 4arrow_forwardFind the attached file.arrow_forwardSince many U.S. Navy aircraft are at or near their usual retirement age of 30 years, military officials want a precise system to assess when aircraft should be taken out of service. A computational method developed at Carnegie Mellon maps in 3-D the microstructure of aircraft materials in their present state so that engineers can test them under different conditions of moisture, salt, dirt, etc. Military officials can then determine if an aircraft is fine, is in need of overhaul, or should be retired. If the 3-D system allows the Navy to use one airplane 2 years longer than it normally would have been used, thereby delaying the purchase of a $20 million aircraft for 2 years, what is the present worth of the assessment system at an interest rate of 8% per year?arrow_forward
- Gelateria Ltd, uses an old family recipe for chocolate ice cream to start up their own ice cream company. They figure out that they can produce and sell this ice cream at a unit cost of 30p per scoop. Luckily, they can strike a deal with the University of Portsmouth to be their exclusive ice cream retailer on campus. 2,000 of the university's students would potentially buy one scoop of ice cream each per day over the summer, 1,000 of whom would be willing to pay up to 80p per scoop of this particular ice cream and 1,000 even £1.2 per scoop. а) What is the optimal uniform price for this chocolate ice cream? How much profit will Gelateria make at this price? In an attempt to further increase their profit, they conduct some market research which yields the result that the students with high willingness to pay would be willing to pay even up to £2 per scoop if they used organic chocolate. However, the other students' willingness to pay for this higher quality would only be slightly higher…arrow_forwardShow your complete solution.arrow_forwardA company that manufactures clear PVC pipes is investigating the production options of batch and continuous processing. Estimated cash flows are: Batch Process First cost ($) 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
- Break-Even Point Hilton Enterprises selis a product for $119 per unit. The variable cost is $68 per unit, while faed costs are $436,968. Determine (a) the break-even point in sales units and (b) the break-even point if the selling price were increased to $124 per unit a. Break-even point in sales units units b. Break-even point if the selling price were increased to 124 per unit units 00arrow_forwardThe CFO of a consulting engineering firm is deciding between purchasing Ford Explorers and Toyota 4Runners for company principals. The purchase price for the Ford Explorer will be $30,750. Annual maintenance costs for the Explorer are expected to be $575 per year more than that of the 4Runner. The purchase price for Toyota 4Runners is 35,250 The trade-in values after 3 years are estimated to be 50% of the first cost for the Explorer and 60% for the 4Runner. (a) What is the incremental ROR between the two vehicles? (b) Provided the firm’s MARR is 15% per year, which vehicle should it buy?arrow_forwardPure gasoline has an energy density of 115,600 BTU per gallon while ethanol has an energy density of 75,670 BTU per gallon. If gasoline costs $3.50 per gallon, (a) what would the cost of pure ethanol have to be in order for the energy costs of the two fuels to break even? (b) What would the price of E85 (85% ethanol, 15% gasoline) have to be for its energy cost to be the same as that of pure gasoline?arrow_forward
- Charlie’s Truck Repair and Service has a new contract that requires him to purchase and maintain new equipment for work on 18-wheeler trucks and heavy road equipment. Two separate vendors have made quotes and estimates for Charlie. Use the estimates and 6% per year return requirement to find the better economic option. One problem is that Charlie does not currently know if the contract will last for 5, 8, or 10 years. He needs a recommendation for all three time periods. Table 1. Economical alternatives offered by Vendorsarrow_forwardA strategy consists of buying a market index product at $430 and taking a position in put option on the index with a strike of $460. If the put premium is $12 and a 6-months interest .rates are 1.86, what is the profit or loss at expiration (in 10 months) if the market index is $440 without using a hedging strategy A( 4.565) B(3.07) c(10.04)arrow_forward4arrow_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