Basics Of Engineering Economy
2nd Edition
ISBN: 9780073376356
Author: Leland Blank, Anthony Tarquin
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Question
Chapter 5, Problem 34APQ
To determine
Capital recovery.
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Bennington Health purchased three dialysis systems each at an installed cost of $100,000 for different locations in the city. The AOC
over 2 years varied as shown. (All values are costs.) The load factor in terms of percentage of clients at each location is shown in
decimal form. Find the expected AW of costs for each location at /= 15% per year.
Location
Load
Year
0
1
2
North (N)
0.50
100,000
20,000
11,000
South (S)
0.35
AOC, $ per year
100,000
15,000
12,000
The expected AW of costs for each location is $
West (W)
0.15
100,000
12,000
8,000
Company C manufactures electric motors. The variable costs are $5,000 per month, the average selling price of the motor is $800 per motor. Fixed costs of the company amount to $80,000 per month, which includes all taxes. Determine the number of motors that must be produced per month to breakeven.
A manufacturing company needs to know whether to produce components for a Bird
Feeder in-house or buy the components from a fabricator. To make the components
in-house, the company needs to buy an injection molding machine, which costs
$9,000. The company expects to produce 10,000 units per year. The following
estimates have been made:
Fixed cost per year
Variable cost per part
Make
$9,000
$6.45
Buy.
$0
$7.20
a. What is the break-even point?
b. If the number of units produced is 10,000, which option is cheaper: Make or Buy?
Explain why.
b. If the number of units produced is increased to 12,500, which option is cheaper:
Make or Buy? Explain why.
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
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