Engineering Economy (17th Edition)
17th Edition
ISBN: 9780134870069
Author: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 5, Problem 41P
To determine
Calculate the effective
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
Nowadays it is very important to reduce one's carbon "footprint" (how much carbon we produce in
our daily lifestyles). Minimizing the use of fossil fuels and instead resorting to renewable sources of
energy (e.g., solar energy) are vital to a "sustainable" lifestyle and a lower carbon footprint. Let's
consider solar panels that prewarm the water fed to a conventional home water heater. The solar
panels have an installed cost of $2,198, and they reduce the homeowner's energy bill by $28.5 per
month. The residual value of the solar panels is negligible at the end of their 8-year life. What is the
annual effective IRR of this investment?
The annual effective IRR of this investment is
%. (Round to two decimal places.)
Nowadays it is very important to reduce one's carbon "footprint" (how much carbon we
produce in our daily lifestyles). Minimizing the use of fossil fuels and instead resorting to
renewable sources of energy (e.g., solar energy) are vital to a "sustainable" lifestyle and a
lower carbon footprint. Let's consider solar panels that prewarm the water fed to a
conventional home water heater. The solar panels have an installed cost of $2,500, and
they reduce the homeowner's energy bill by $426 per year. The residual value of the solar
panels is $550 at the end of their 9-year life. What is the annual IRR of this investment?
Use the trial-and-error method starting with an initial guess of 13%.
(a) The annual IRR of this investment is 10.72%. (Round to two decimal places.)
(b) If the homeowner's MARR is 10%, is the investment economical?
O A. No
B. Yes
The price of a car you want is $36,000 today. Its price is expected to increase by $1000 each year. You now have $22,000 in an
investment account, which is earning 8% per year. How many years will it be before you have enough to buy the car without borrowing
any money? (Use Goal Seek to determine the time taken.)
The time taken is determined to be
years.
Chapter 5 Solutions
Engineering Economy (17th Edition)
Ch. 5.A - Use the ERR method with = 8% per year to solve for...Ch. 5.A - Apply the ERR method with = 12% per year to the...Ch. 5.A - Are there multiple IRRs for the following...Ch. 5.A - Are there multiple IRRs for the following cash...Ch. 5 - Tennessee Tool Works (TTW) is considering...Ch. 5 - Prob. 2PCh. 5 - Prob. 3PCh. 5 - Prob. 4PCh. 5 - What is the capitalized worth of a project that...Ch. 5 - A large induced-draft fan is needed for an...
Ch. 5 - Prob. 7PCh. 5 - Prob. 8PCh. 5 - Prob. 9PCh. 5 - A corporate bond pays 5% of its face value once...Ch. 5 - Prob. 11PCh. 5 - Prob. 12PCh. 5 - Prob. 13PCh. 5 - The cash-flow diagram below has an internal rate...Ch. 5 - Prob. 15PCh. 5 - Prob. 16PCh. 5 - Prob. 17PCh. 5 - Prob. 18PCh. 5 - Prob. 19PCh. 5 - Your firm is thinking about investing 200,000in...Ch. 5 - Determine the FW of the following engineering...Ch. 5 - Prob. 22PCh. 5 - Fill in Table P5-23 below when P = 10,000, S = 2,...Ch. 5 - An asset has an initial capital investment of4...Ch. 5 - A simple, direct space heating system is currently...Ch. 5 - Prob. 26PCh. 5 - Prob. 27PCh. 5 - Prob. 28PCh. 5 - Prob. 29PCh. 5 - Its easier to make money when interest rates in...Ch. 5 - Prob. 31PCh. 5 - Prob. 32PCh. 5 - Stan Moneymaker has been informed of a major...Ch. 5 - The required investment cost of a new, large...Ch. 5 - Prob. 35PCh. 5 - A parking garage has a capital investment cost of...Ch. 5 - The city of Oak Ridge is considering the...Ch. 5 - Prob. 38PCh. 5 - Prob. 39PCh. 5 - Prob. 40PCh. 5 - Prob. 41PCh. 5 - Prob. 42PCh. 5 - Prob. 43PCh. 5 - To purchase a used automobile, you borrow 10,000...Ch. 5 - Your boss has just presented you with the summary...Ch. 5 - Experts agree that the IRR of a college education...Ch. 5 - A company has the opportunity to take over a...Ch. 5 - The prospective exploration for oil in the outer...Ch. 5 - Prob. 49PCh. 5 - An integrated, combined cycle power plant produces...Ch. 5 - A computer call center is going to replace all of...Ch. 5 - Prob. 52PCh. 5 - Prob. 53PCh. 5 - Prob. 54PCh. 5 - The upturned wingtips on jet aircraft reduce drag...Ch. 5 - Prob. 56PCh. 5 - Prob. 57PCh. 5 - Prob. 58PCh. 5 - In southern California a photovoltaic (PV) system...Ch. 5 - a. Calculate the IRR for each of the three...Ch. 5 - Prob. 61PCh. 5 - A hospital germ-fighting and floor cleaning robot,...Ch. 5 - Prob. 63PCh. 5 - Prob. 64SECh. 5 - Prob. 65SECh. 5 - Prob. 66SECh. 5 - A certain medical device will result in an...Ch. 5 - Refer to Problem 5-61. Develop a spreadsheet to...Ch. 5 - Prob. 69CSCh. 5 - Prob. 70CSCh. 5 - Suppose that the average utilization of the CVD...Ch. 5 - Prob. 72FECh. 5 - Prob. 73FECh. 5 - Prob. 74FECh. 5 - Prob. 75FECh. 5 - Prob. 76FECh. 5 - Prob. 77FECh. 5 - Prob. 78FECh. 5 - Prob. 79FECh. 5 - A new machine was bought for 9,000 with life of...Ch. 5 - Prob. 81FECh. 5 - Prob. 82FECh. 5 - Prob. 83FECh. 5 - Prob. 84FECh. 5 - Prob. 85FE
Knowledge Booster
Similar questions
- i need helparrow_forwardFor the following economic calculations, write the factors (multipliers) that should be used, Q2. in (i) using the parameter values, and in (ii) calculate the result by showing your computations. Write the results you find in the spaces left. (Use factors for your calculations.) EXAMPLE: If you deposit S 100 to a bank account that earns 8% annual interest, how much money will you have in this account after five years? (i)(F/P, 8%, 5) (ii)146.93 100 * (F/P, 8%, 5) = 100 * 1.4693 = 146.93 TL a. You plan to take a credit with $1500 installment size per year with an annual interest rate of 8% over six years from a bank. What is the amount of your current credit? (i). (ii) b. A bank is required to deposit money for four years with an interest rate 10%. The money deposited at the end of the first year is 6000 TL and the amount of money deposited in the next three years will be reduced by 500 TL every year. How much money will be in the bank at the end of the fourth year? (i). (ii).arrow_forwardNowadays it is very important to reduce one's carbon "footprint" (how much carbon we produce in our daily lifestyles). Minimizing the use of fossil fuels and instead resorting to renewable sources of energy (e.g., solar energy ) are vital to a "sustainable" lifestyle and a lower carbon footprint. Let's consider solar panels that prewarm the water fed to a conventional home water heater. The solar panels have an installed cost of $2694, and they reduce the homeowner's energy bill by $29 per month. The residual value of the solar panels is negligible at the end of their 9-year life. What is the annual effective IRR of this investment?arrow_forward
- Suppose I have computed the cost of carbon per mile for my car at 0.011 per mile. Assume that the interest rate is 5% and that I drive the car 30,000 miles per year. What is present value of the carbon expense for five years? You will need to use the PV function in Excel or a financial calculator. In Excel the present value of a stream of monetary cash flows is given by -PV(rate, number of payments, payment amount) where rate is the interest rate. We enter the payment in Excel as a positive number. You can also compute the carbon cost per year and then discount those five values back to the present.arrow_forwardA doctor is on contract to a medium-sized oil company to provide medical services at remotely located, widely separated refineries. The doctor is considering the purchase of a private plane to reduce the total travel time between refineries. The doctor can buy a used Learjet 31A now for $1.700 million or wait for a new very light jet (VLJ) that will be available 3 years from now. The cost of the VLJ will be $2.600 million, payable when the plane is delivered in 3 years. The doctor has asked you, his friend, to determine the present worth of the VLJ so that he can decide to buy the used Learjet now or wait for the VLJ. The MARR is 14.00% per year, and the inflation rate is projected to be 3.200% per year. a) What is the present worth of the VLJ with inflation considered? b) Which plane should he buy? The present worth of the VLJ with inflation considered is He should buy the used Learjet now ✓arrow_forwardOregon Ducks, Inc. is considering buying licenses for 12 megahertz of wireless spectrum in the 700 MHz range, which is suitable for delivering television to mobile phones. The 700 MHz signals can travel long distances and more easily penetrate walls and other obstacles. The acquisition cost is $300 million. In addition, because networks that operate in the 700 MHz range are less expensive to build than those in other portions of the spectrum, Ducks estimates annual costs of $24 million over the next 9 years and no salvage value. During the same period, the company expects to generate annual revenue of $40 million by offering television and video to mobile-phone users. Calculate the net present worth of this investment if the company's minimum attractive rate of return (discount rate) is 13% per year.arrow_forward
- If APC is 0.75 and MPC is 1, how much will be APS.arrow_forwardYour firm has discovered a cheap and efficient technology of turning used plastic bottles and bags into various products. You limit your attention to the following two production options: you can produce plastic utensils or helmets. In the "utensils" case your estimat ann revenue $25,000, while production will cost you $8,000. However, in your "helmets" option, you expect to sell 2000 helmets every year at $10 each and the average total cost of every helmet will be $3. What is your accounting ?profit if you decided to produce helmetsarrow_forwardA doctor is on contract to a medium-sized oil company to provide medical services at remotely located, widely separated refineries. The doctor is considering the purchase of a private plane to reduce the total travel time between refineries. The doctor can buy a used Learjet 31A now for $1.1 million or wait for a new very light jet (VLJ) that will be available 3 years from now. The cost of the VLJ will be $2.1 million, payable when the plane is delivered in 3 years. The doctor has asked you, his friend, to determine the present worth of the VLJ so that he can decide to buy the used Learjet now or wait for the VLJ. The MARR is 15% per year and the inflation rate is projected to be 3% per year. (a) What is the present worth of the VLJ with inflation considered? (b) Which plane should he buy?arrow_forward
- The Fischer-Tropsch (F-T) process was developed in Germany in 1923 to convert synthesis gas (i.e., a mixture of hydrogen and carbon monoxide) into liquid with some gaseous hydrocarbons. Interestingly, the F-T process was used in World War II to make gasoline and other fuels. The U.S. military can save one billion gallons per year of foreign oil by blending its jet fuel with F-T products. If the government expects inflation to average 3% per year, what is the equivalent uniform annual savings in fuel? The government's MARR is 7% per year, the study period is 40 years, and one gallon of jet fuel costs $2.80. The AW is $_______billion.arrow_forwardData for two 50-hr motors are follows: Honda Motor Kawasaki Motor Original Cost Annual Maintenance Life, years Efficiency Taxes and Insurance The cost of electricity per kilowatt-hour is two dollars. If money has a value of 20%, how many hours per year must the motors run at full load to be equally economical? Which motor is more affordable if the predicted number of operating hours per year is more than the break-even point? a. Calculate the power consumption of Honda Motors in terms of X. b. Calculate the power consumption of Kawasaki Motors in terms of X. c. Solve for the break-even point. 37,500 48,000 750 1,500 10 10 87% 3% 92% 3%arrow_forwardJust question 2.9arrow_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