Contemporary Engineering Economics (6th Edition)
6th Edition
ISBN: 9780134105598
Author: Chan S. Park
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 6, Problem 18P
To determine
Calculate the cost per acre.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
You and one of your classmates are considering setting up a prescription delivery service for local residents in Mount Pearl. In
order to start the business you will need to purchase a car for $7,200 which you expect you will be able to sell for $3,600 at the
end of every two years (you'll have to purchase a new equivalent car at that time). Insurance costs are $560 for each six months
of operation, starting immediately, and advertising costs (flyers, newspaper ads, etc.) are estimated to be $110 per month.
All calculations are performed using 4 significant figures.
The big question is how many customers you will have, but you figuring on setting a fee of $2 per delivery, which will be payable
by your clients at the end of each month.
Assuming a stable interest rate of 6% per year, compounded monthly what is the break even number of deliveries per month?
A father wants to start setting aside money for his daughter's college fees, who is eight years old. In ten
years, the daughter will start college. She will need to pay for her college costs for four years with an
annual sum of $20,000 in current (constant) dollars. Assume that these tuition payments will be sent in
at the start of every academic year. (At the conclusion of ten years, the first payment is made.) The
interest rate on the savings account will be 8% compounded quarterly (market interest rate) during this
time, whereas the expected general inflation rate for the future is 5% annually. How much money would
the daughter need to borrow in order to pay for her freshman year if the father decides to save only
$500 (real money) per quarter?
(a) $1,920
(b) $2,114
(c) $2,210
(d) $2,377
Planning for a major redesign, Itumeleng collected data at her store on several consecutive Saturday mornings. She noticed that customers arrived at the checkout at a rate of approximately 100 per hour. Fully 20 percent of the customers had 10 items or less. Those people took about 2 minutes to serve on average, while customers with more than 10 items took about 4 minutes to process. Itumeleng expects service time to improve when universal price code readers are installed in the new design. Help Itumeleng with her design for the system,
Chapter 6 Solutions
Contemporary Engineering Economics (6th Edition)
Ch. 6 - Prob. 1PCh. 6 - Prob. 2PCh. 6 - Prob. 3PCh. 6 - Prob. 4PCh. 6 - Prob. 5PCh. 6 - Prob. 6PCh. 6 - Consider the cash flows in Table P6.7 for the...Ch. 6 - Prob. 8PCh. 6 - Prob. 9PCh. 6 - The repeating cash flows for a certain project are...
Ch. 6 - Beginning next year, a foundation will support an...Ch. 6 - Prob. 12PCh. 6 - Prob. 13PCh. 6 - Prob. 14PCh. 6 - Prob. 15PCh. 6 - Prob. 16PCh. 6 - Prob. 17PCh. 6 - Prob. 18PCh. 6 - The Geo-Star Manufacturing Company is considering...Ch. 6 - Prob. 20PCh. 6 - Prob. 21PCh. 6 - Prob. 22PCh. 6 - Prob. 23PCh. 6 - Prob. 24PCh. 6 - Prob. 25PCh. 6 - Prob. 26PCh. 6 - Prob. 27PCh. 6 - Prob. 28PCh. 6 - Prob. 29PCh. 6 - Prob. 30PCh. 6 - Prob. 31PCh. 6 - Prob. 32PCh. 6 - Prob. 33PCh. 6 - Prob. 34PCh. 6 - Prob. 35PCh. 6 - Prob. 36PCh. 6 - Prob. 37PCh. 6 - Prob. 38PCh. 6 - Prob. 39PCh. 6 - Prob. 40PCh. 6 - Prob. 41PCh. 6 - Prob. 42PCh. 6 - Prob. 43PCh. 6 - Prob. 44PCh. 6 - Prob. 45PCh. 6 - Prob. 46PCh. 6 - Prob. 47PCh. 6 - Prob. 48PCh. 6 - Prob. 49PCh. 6 - Prob. 50PCh. 6 - Prob. 51PCh. 6 - Prob. 52PCh. 6 - Prob. 53PCh. 6 - Prob. 1STCh. 6 - Prob. 2STCh. 6 - Prob. 3STCh. 6 - Prob. 4ST
Knowledge Booster
Similar questions
- You are a college sophomore who tutors fellow classmates in your free time for extra money. With your current abilities, you can earn $2,000 per year for the next three years from tutoring. However, suppose you have the option of enhancing your ability to tutor by acquiring special training for $6,000. After paying the fee, the training takes two years to complete, but at the end of this training period, you can earn $13,000 tutoring during the third year. While training in your free time, you are unable to continue tutoring. At what discount rate would you be indifferent between acquiring and not acquiring the training? You would be indifferent if the discount rate were percent. (Enter a numeric response rounded to two decimal places.)arrow_forwardJenny Tanaka wants to buy a new car, and the annual gasoline expense is a major consideration. Her present car gets 25 miles per gallon (mpg), and she is considering purchasing a new car that gets 40 mpg. Jenny now drives about 12,000 miles per year and pays $3.25 per gallon of gasoline. She therefore calculates an annual gasoline consumption of 480 gallons for her 25 mpg car (12,000 miles/25 mpg) compared to 300 gallons consumed per year for the 40 mpg car (12,000 miles/40 mpg). Since driving the higher- mileage car would use 180 gallons less per year, Jenny estimates the new car will save her $585 in gasoline expense per year (180 gallons 3 $3.25 per gallon). Suppose Jenny buys the 40 mpg car. According to economic theory, Jenny's actual annual savings on gasoline will be 7 1 C 1 U C VI 10 V K W S TACAZEC 10 GUNS TOMBER 2 than her initial estimate of $585.arrow_forwardYou are a retired landowner whose Conservation Reserve Program (CRP) contract for 100 acres will expire next year. You can renew your contract for another ten years and receive a payment of $130 per acre each year, but you wonder if it would be more profitable to put it into hay production and have it custom farmed. Your expected yield if you grow hay is five tons per acre, and the long-run expected selling price is $100 per ton. Fertilizer costs of $160 per acre each year would be incurred if hay is produced. Other variable costs of production would be $30 per acre each year. You can hire a custom operator to harvest and store the hay crop for you for $30 per ton. If you take the land out of the CRP program, you will no longer have to spend $800 per year to control weeds, but you will give up the $130 per acre annual payment from the USDA. What would your overall net change in profit be if you implemented this change? a. $3,800 b. $5,800 c. $3,000 d. $47,000arrow_forward
- As a manager of a small business, you are considering to introduce a new product. The production requires a new machine. You figure out that you could buy it for $190,000, but the price could be in between $180,000 and $200,000. Because of the budget limitation you can only pay 60% of the machine price with your own saving. You will borrow the other 40% with an interest rate around 9% per year (but subject to change in between 8.5% and 10%). The demand of this product is predicted to be 15,000 per year and but could be in between 14800 and 15500. The unit price could be in between $2 and $3, and now you believe that $2.5 is a reasonable price right now. The raw material cost is estimated to be $0.9 but could be in between $0.5 and $1.2. The operation cost of the equipment is around $0.2 for one product but could be in between $0.1 and $0.25. The maintenance cost for this equipment is estimated to be $2000 per year but could be in between $1500 and $2300. Suppose you could always invest…arrow_forwardYou are considering renovating your small business into an even smaller business. You currently earn $50,000 per year from your business. It would cost $100,000 to renovate. You are not sure how successful the new venture will be. You paid $500 for a market report which told you that you have an equal chance of earning $100,000 per year or $40,000 per year, starting in 2 years (meaning at time 2). You plan to operate the business for 10 years, regardless of renovations. You have an interest rate of 2% annually What is the NPV of the project?arrow_forwardQantas expects to cut its fuel bill by as much as $40 million a year thanks to a radical overhaul to how it plots its flights across the globe. The airline has spent five years and millions of dollars building a new flight planning program – which it says will materially cut its fuel bill and bring its ultra-haul ambitions closer to reality. Qantas’ team of dispatchers have used the same computer program for 30 years to plan the route of each flight, assessing weather, airspace traffic, safety and legal constraints on three of four possible routes. The new system uses cloud computing to crunch data on thousands of possible flight paths, using millions of data points – including the latest wind patterns, and varying altitudes and wind speeds – to build a cost map that presents the most efficient route… A flight to Johannesburg, for example, was directed to fly 160 nautical miles further than it would normally, but in doing so cut the headwinds it experienced by two-thirds. The 747…arrow_forward
- Electricity is produced with water according to the function: E = 5 + 5W-1W² where E = kilowatt-hour and W = gallons of water. Water costs $0.02 per gallon. Electricity can be sold on the grid for $0.10 per kWh (kilowatt-hour). How much water should be purchased?arrow_forwardA Flexible Savings Account (FSA) plan allows you to put money into an account at the beginning of the calendar year that can be used for medical expenses. This amount is not subject to federal tax. As you pay medical expenses during the year, you are reimbursed by the administrator of the FSA until the money is exhausted. From that point on, you must pay your medical expenses out of your own pocket. On the other hand, if you put more money into your FSA than the medical expenses you incur, this extra money is lost to you. Your annual salary is $80,000 and your federal income tax rate is 30%. [1] Assume that your medical expenses in a year are normally distributed with mean $2000 and standard deviation $500. Build an @RISK model in which the output is the amount of money left to you after paying taxes, putting money in an FSA, and paying any extra medical expenses. Experiment with the amount of money put in the FSA, using a RISKSIMTABLE function. [2] Rework part a, but this time assume…arrow_forwardFive years ago a dam was constructed to impound irrigation water and to provide flood protection for the area below the dam. Last winter a 100-year flood caused extensive damage both to the dam and to the surrounding area. This was not surprising, since the dam was designed for a 50-year flood. The cost to repair the dam now will be $250,000. Damage in the valley below amounts to $750,000. If the spillway is redesigned at a cost of $250,000 and the dam is repaired for another $250,000, the dam may be expected to withstand a 100-year flood without sustaining damage. However, the storage capacity of the dam will not be increased and the probability of damage to the surrounding area below the dam will be unchanged. A second dam can be constructed up the river from the existing dam for $1 million. The capacity of the second dam would be more than adequate to provide the desired flood protection. If the second dam is built, redesign of the existing dam spillway will not be necessary, but…arrow_forward
- Your boss has asked you to evaluate the economics of replacing 1,000 60-Watt incandescent light bulbs (ILBs) with 1,000 compact fluorescent lamps (CFLs) for a particular lighting application. During your investigation you discover that 13-Watt CFLs costing $2.00 each will provide the same illumination as standard 60-Watt ILBs costing $0.50 each. Interestingly, CFLs last, on average, eight times as long as incandescent bulbs. The average life of an ILB is one year over the anticipated usage of 1,000 hours each year. Each incandescent bulb costs $1.90 to install/replace. Installation of a single CFL costs $2.90, and it will also be used 1,000 hours per year. Electricity costs $0.12 per kilowatt hour (kWh), and you decide to compare the two lighting options over an 8-year study period. If the MARR is 10% per year, compare the economics of the two alternatives and write a brief report of your findings for the boss. Assume that both installation cost and cost of the bulbs occur at the…arrow_forwardYour boss has asked you to evaluate the economics of replacing 1,000 60-Watt incandescent light bulbs (ILBS) with 1,000 compact fluorescent lamps (CFLs) for a particular lighting application. During your investigation you discover that 13-Watt CFLS costing $2.00 each will provide the same illumination as standard 60-Watt ILBS costing $0.50 each. Interestingly, CFLs last, on average, eight times as long as incandescent bulbs. The average life of an ILB is one year over the anticipated usage of 1,000 hours each year. Each incandescent bulb costs $2.00 to install/replace. Installation of a single CFL costs $3.00, and it will also be used 1,000 hours per year. Electricity costs $0.12 per kilowatt hour (kWh), and you decide to compare the two lighting options over an 8-year study period. If the MARR is 12% per year, compare the economics of the two alternatives and write a brief report of your findings for the boss. Assume that both installation cost and cost of the bulbs occur at the…arrow_forwardYou plan to purchase a car for $28,000. Its market value will decrease by 20% per year. You have determined that the IRS- allowed mileage reimbursement rate for business travel is about right for fuel and maintenance at $0.485 per mile in the first year. You anticipate that it will go up at a rate of 10% each year, with the price of oil rising, influencing gasoline, oils, greases, tires, and so on. You normally drive 15,000 miles per year. What is the optimum replacement interval for the car? Your MARR is 9%.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