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 36APQ
To determine
Calculate the annual worth.
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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
determine
The operating cost for a machine is $40,000 for
year 1 and then it increases by $5,000per year
through year 10. The equivalent uniform annual
cost for the machine (years 1-10) at an interest
rate of 9% per year is calculated as:
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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- A coal-fired plant has upgraded an emission control valve. The modification costs only $8000 and is expected to last 6 years with a $200 salvage value. The maintenance cost is expected to be high at $1700 the first year, increasing by 11% per year thereafter. Determine the present worth of the modification and maintenance cost both by hand calculation using formula and by spreadsheet at an interest rate of 8% per year.arrow_forwardA bulk materials hauler purchased a used dump truck for %50,000. The operating cost was %5,000 per year, with average revenues of %7,500 per year. After 24 years, the truck was sold for %11,000. The rate of return was closest to; Your answer: 6.6% per year 2.6% per year 4.6% per year 7.6% per yeararrow_forwardThe Sundance Detective Agency has purchased new surveillance equipment with the following estimates. The year index is k= 1, 2, 3, ... First cost = $1200 Annual maintenance cost = $75 + 5k Extra annual revenue = $250 + 50k Salvage value = $750 for all years Calculate the payback period to make a return of 10% per year. The payback period to make a return of 10% per year is years.arrow_forward
- A company that manufactures brushes blowers invested $650,000 in an automated quality controlsystem for blower housings. The resultant savings was $160,000 per year for 5 years. If the equipmenthad a salvage value of $50,000, what rate of return per year did the company make? (Initial guess i = 5%)arrow_forwarda machine costs 80,000 and the salvage value after 20 years is 20,000. find the equivalent annual worth cost if the annual operating cost is 18,000 and money is worth 10% per year.arrow_forwardA large textile company is trying to decide which sludge dewatering process it should use ahead of its sludge drying operation. The costs associated with centrifuge and belt press systems are shown. Compare them on the basis of their annual worths using an interest rate of 10% per year. System Centrifuge Belt Press First cost, $ −235,000 −150,000 AOC, $/year −48,000 −41,000 Overhaul in year 2, $ -- −26,000 Salvage value, $ 40,000 10,000 Life, years 6 4 The annual worth of the centrifuge system is $− , and the annual worth of the belt press system is $− . The system selected on the basis of the annual worth analysis is the (Click to select) belt press centrifuge system.arrow_forward
- Accusoft Systems is offering small business owners a software package that keeps track of many accounting functions from bank transactions to sales invoices. The site license will cost $55,000 to install and will require a fee of $2500 every 3 months. If your company can save $13,500 every quarter and have the security of managing its books in-house, how long will it take for you to recover the investment at an interest rate of 8% per quarter? The time taken to recover the investment is determined to be _______ quarters.arrow_forwardHandheld fiber-optic meters with white light polarization interferometry are useful for measuring temperature, pressure, and strain in electrically noisy environments. The fixed costs associated with manufacturing are $800,000 per year. If a base unit sells for $2950 and its variable cost is $2075, (a ) how many units must be sold each year for breakeven? (b ) what will the profit be for sales of 3000 units per year?arrow_forwardThe alternatives shown are to be compared on the basis of their present worth values. At an interest rate of 10% per year, the values of n that you should use in the uniform series factors to make a correct comparison by the present worth method are: (a) n = 3 years for A andn = 3 years for B (b) n = 3 years for A andn = 6 years for B (c) n = 6 years for A andn = 6 years for B (d) None of the above Alternative A Alternative B First cost, $ -50,000 -90,000 - 10,000 Annual operating cost, $ per year Salvage value, $ Life, years -4000 13,000 15,000 3 a b C d.arrow_forward
- A coal-fired power plant has upgraded an emission control valve. The modification costs only $10,000 and is expected to last 8 years. The maintenance cost is expected to be high at $1000 the first year, increasing by 12% per year thereafter. Determine the equivalent present worth of the modification and maintenance cost by hand at 12% per year. Answer: POTotal = $ Blank 1arrow_forwardA company that manufactures magnetic flow meters expects to undertake a project that will have the cash flows estimated. First cost, $ −840,000 Equipment replacement cost in year 2, $ −300,000 Annual operating cost, $/year −890,000 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 $− .arrow_forwardPlease answer fast please arjent help please ASAP pls solution correctly pleasearrow_forward
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