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
Videos
Textbook Question
Chapter 5, Problem 45P
Your boss has just presented you with the summary in the accompanying table of projected costs and annual receipts for a new product line. He asks you to calculate the
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
A$ 100,000 machine replacement project
indicates that it can generate, after-tax cash
flows, $ 35,000 per year over its 10-year
useful life. At the end of this period, it could
be sold for $ 10,000. Considering a Minimum
Attractive Rate of Return (MARR) of 10% per
year, select the equation by notation of
factors that calculates your Net Present Value
-100000 + 35000 (P/A,10%,9) + 10000 (P/F,10%,10)
-100000 + 35000 (P/A,10%,9) + 45000 (P/F,10%,10)
100000 – 35000 (P/A,10%,9) – 45000 (P/F,10%,10)
-100000 + 35000 (P/F,10%,10) + 10000 (P/A,10%,10)
A deep water port for imported liquefied natural gas (LNG) is needed for three years. At the end of the third year, it will cost more to dismantle the LNG facility than it
produces in revenues. The cash flows are estimated as follows:
The IRR for this LNG facility is closest to which choice below?
Choose the closest answer below.
A. The IRR for the LNG facility is 9.5% per year.
B. The IRR for the LNG facility is 4.7% per year.
C. The IRR for the LNG facility is 12.2% per year.
D. The IRR for the LNG facility is 14.6% per year.
EOY
0
1
2
3
Net Cash Flow
- $54 million
44 million
40 million
- 24 million
ANSWER: ERR (i %) = 23.71%
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
Additional Business Textbook Solutions
Find more solutions based on key concepts
Assume the United States is an importer of televisions and there are no trade restrictions. US consumers buy 1 ...
Principles of Microeconomics (MindTap Course List)
Exercise B1 What point is preferred along an indifference Curve?
Principles of Economics 2e
Determine the price elasticity of demand if, in response to an increase in price of 10 percent, quantity demand...
Microeconomics
(Studying Economics) According to the text, economics majors on average make more money than most other majors ...
ECON: MICRO4 (New, Engaging Titles from 4LTR Press)
Explain how to derive a total expenditures (TE) curve.
Macroeconomics (Book Only)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Similar questions
- A company predicts they will make $1,321 per year over the next 19 years if they spend $2,497 on a machine (an asset with multi-year use). If the MARR is 16.0%, how much is this investment worth per year?arrow_forwardGive proper answer without photo answer and take a likearrow_forwardMarian Plunket owns her own business and is considering an investment. If she undertakes the investment, it will pay $5,560 at the end of each of the next 3 years. The opportunity requres an initial investment of $1,390 plus an additional investment at the end of the second year of $6,950. What is the NPV of this opportunity if the interest rate is 2.2% per year? Should Marian take it?arrow_forward
- Determine the FW of the following engineering project when the MARR is 15% per year. Is the project acceptable? (5.4) *A negative market value means that there is a net cost to dispose of an asset. Investment cost Expected lifeMarket (salvage) value* Annual receiptsAnnual expenses $10,000 5 years -$1,000 $8,000 $4,000arrow_forwardEngineering Economics Q#1arrow_forwardAn industrial firefighting truck costs $100,000. Savings in insurance premiums and uninsured losses from the acquisition and operation of this equipment is estimated at $60,000/yr. Salvage value of the apparatus after 5 yrs. is expected to be $20,000. A full-time driver during operating hours will accrue an added cost of $10,000/yr. What would the rate of return be on this investment? @ 40% present worth @ 50% present wortharrow_forward
- YOUR FATHER PLANS TO INVEST P500,000.00 IN AN AUTO WASHING MACHINE WITH THE FF DATA: (20 PTS.) WASHING CAPACITY- 12 CARS/HR AT 8HRS OPERATION/DAY FOR 6DAYS A WEEK AND 50 WEEKS/YEAR CAR WASH CHARGE-P25/CAR MANUAL LABOR COST ( 2 WORKERS)-P25/HR PER WORKER PLUS A PAID VACATION BENEFITS OF 2 WEEKS PER YEAR MAINTENANCE COST-P8500.00/MONTH DESIRED RATE OF RETURN ON THE CAPITAL-20% PRESENTLY YOUR FATHER IS EARNING P25,000.00/MONTH AS A REGULAR EMPLOYEE AND WANTS TO CONCENTRATE ON THIS BUSINESS AND WANT TO RECOVER HIS INVESTMENT IN 5 YEARS. USING ROR AND AW METHOD OF ECONOMY STUDIES, SHOULD YOUR FATHER PROCEED WITH THE INVESTMENT?arrow_forwardWhat is the IRR percentagearrow_forwardA company must relocate one of its factories in three years. Equipment for theloading dock is being considered for purchase. The original cost is P20,000, salvagevalue of the equipment after three years is P8,000. The company’s rate of return on themoney is 10%. Determine the capital recovery per year.arrow_forward
- The American Pharmaceutical Company (APC) has a policy that all capital investments must have a three-year or less discounted payback period in order to be considered for funding. The MARR at APC is 7% per year. Is the above project able to meet this benchmark for funding? Click the icon to view the interest and annuity table for discrete compounding when the MARR is 70er year. The payback period is years. (Round to the nearest whole number.) End of Year 1 2 3 4 5 6-8 Cash Flow - $275,000 - $25,000 $50,000 $180,000 $235,000 $330,000 $95,000arrow_forwardHow would I solve part A and B ? Thank you..arrow_forwardCombined-cycle power plants use two combustion turbines to produceelectricity. Heat from the first turbine’s exhaust is captured to heatwater and produce steam sent to a second steam turbine thatgenerates additional electricity. A 968-megawatt combined-cycle gasfired plant can be purchased for P450 million, has no salvage value,and produces a net cash flow (revenues less expenses) of P50 millionper year over its expected 30-year life.a. If the hurdle rate (MARR) is 14% per year, how profitable aninvestment is this power plant?b. What is the simple payback period for the plant? Is this investmentacceptable?arrow_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:PEARSON
Engineering 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 Learning
Managerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage Learning
Managerial 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
DATA GEMS: How to Access Income Data Tables and Reports From the CPS ASEC; Author: U.S. Census Bureau;https://www.youtube.com/watch?v=BWpVC-Clczw;License: Standard Youtube License