EBK ENGINEERING ECONOMY
16th Edition
ISBN: 9780133819014
Author: Koelling
Publisher: YUZU
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter 6, Problem 26P
In the Rawhide Company (a leather products distributor), decisions regarding approval of proposals for capital investment are based upon a stipulated MARR of 18% per year. The five packaging devices listed In Table P6-26 were compared, assuming a 1 0-year life and zero market value for each at that time. Which one (if any) should be selected? Make any additional calculations that you think are needed to make a comparison, using the ERR method. Let
Table P6-26 Table for Problem 6-26
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
A factory manager is planning for the manufacture of plywood to be sold overseas. The fixed cost of operation is estimated at $800,000 per month while the variable cost is $155 per thousand board feet of plywood. The selling price will depend on how much will be produced and sold and is determined by the relationship, price per thousand board feet, p = $600 – 0.05D, where D is the amount produced and sold in thousands of board feet. Determine the monthly production that will maximize the total profit and corresponsding price. Dettermine also the corresponding maximum profit per month.
A) For maximum profit, (to the nearest unit) thousands of board feet per month must be produced and sold at per thousand board feet of plywood.(Round to the nearest cent.)
B) The maximum profit per month is equal to $
One method for developing a mine containing an estimated 100,000 tons of ore will result in the recovery of 62% of the available ore deposit and will cost $23.00 per ton of material removed. A second method of development will recover only 50% of the ore deposit, but it will cost only $15.00 per ton of material removed. Subsequent processing of the removed ore recovers 300 pounds of metal from each ton of processed ore and costs $40.00 per ton of ore processed. The recovered metal can be sold for $0.80 per pound. Which method for developing the mine should be used if your objective is to maximize total profit from the mine?
At the Motorola plant in Mesa, Arizona, it is desired to determine whether one-inch-thick insulation or two-inch-thick insulation should be used to reduce heat loss from a long section of steam pipe. The heat loss from this pipe without any insulation would cost Php200 per linear foot per year. The one-inch insulation will eliminate 88% of the heat loss and will cost Php60 per foot. Two-inch insulation will eliminate 92% of the heat loss and will cost Php110 per foot. The steam pipe is 1,000 feet in length and will last for10 years. MARR = 6% per year. Which insulation thickness should be recommended?
Chapter 6 Solutions
EBK ENGINEERING ECONOMY
Ch. 6 - Prob. 1PCh. 6 - The Consolidated Oil Company must install...Ch. 6 - Prob. 3PCh. 6 - Three mutually exclusive design alternatives are...Ch. 6 - Prob. 5PCh. 6 - Prob. 6PCh. 6 - Fiesta Foundry is considering a new furnace that...Ch. 6 - Prob. 8PCh. 6 - Prob. 9PCh. 6 - Consider the following cash flows for two mutually...
Ch. 6 - Prob. 11PCh. 6 - Prob. 12PCh. 6 - The alternatives for an engineering project to...Ch. 6 - Prob. 14PCh. 6 - Prob. 15PCh. 6 - Prob. 16PCh. 6 - Refer to the situation in Problem 6-16. Most...Ch. 6 - Prob. 18PCh. 6 - Prob. 19PCh. 6 - Prob. 20PCh. 6 - Prob. 21PCh. 6 - Prob. 22PCh. 6 - Prob. 23PCh. 6 - Prob. 24PCh. 6 - Prob. 25PCh. 6 - In the Rawhide Company (a leather products...Ch. 6 - Refer to Problem 6-2. Solve this problem using the...Ch. 6 - Prob. 28PCh. 6 - Prob. 29PCh. 6 - Prob. 30PCh. 6 - Prob. 31PCh. 6 - Prob. 32PCh. 6 - Prob. 33PCh. 6 - Potable water is in short supply in many...Ch. 6 - Prob. 35PCh. 6 - Prob. 36PCh. 6 - In the design of a special-use structure, two...Ch. 6 - Prob. 38PCh. 6 - a. Compare the probable part cost from Machine A...Ch. 6 - Prob. 40PCh. 6 - Two mutually exclusive alternatives are being...Ch. 6 - Prob. 42PCh. 6 - IBM is considering an environmentally conscious...Ch. 6 - Three mutually exclusive earth-moving pieces of...Ch. 6 - A piece of production equipment is to be replaced...Ch. 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. 54PCh. 6 - Prob. 55PCh. 6 - Prob. 56PCh. 6 - Prob. 57PCh. 6 - Prob. 58PCh. 6 - Prob. 59PCh. 6 - Prob. 60PCh. 6 - Prob. 61PCh. 6 - Prob. 62PCh. 6 - Prob. 63PCh. 6 - Prob. 64PCh. 6 - Prob. 65PCh. 6 - Prob. 66PCh. 6 - Three models of baseball bats will be manufactured...Ch. 6 - Refer to Example 6-3. Re-evaluate the recommended...Ch. 6 - Prob. 69SECh. 6 - Prob. 70SECh. 6 - Prob. 71SECh. 6 - Prob. 72CSCh. 6 - Prob. 73CSCh. 6 - Prob. 74CSCh. 6 - Prob. 75FECh. 6 - Prob. 76FECh. 6 - Prob. 77FECh. 6 - Complete the following analysis of cost...Ch. 6 - Prob. 79FECh. 6 - For the following table, assume a MARR of 10% per...Ch. 6 - Prob. 81FECh. 6 - Problems 6-82 through 6-85. (6.4) Table P6-82 Data...Ch. 6 - Prob. 83FECh. 6 - Problems 6-82 through 6-85. (6.4) Table P6-82 Data...Ch. 6 - Problems 6-82 through 6-85. (6.4) Table P6-82 Data...Ch. 6 - Consider the mutually exclusive alternatives given...Ch. 6 - Prob. 87FE
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
- Tony works for ABC Window Products. While performing an analysis for a new window product, Tony found a report from last year that provided the following information regarding the manufacture of a similar product: annual production rate = 40,000 units; selling price = P70 per unit; fixed production cost = P240,000 per year; variable production cost = P1,700,000 per year; variable selling expenses = P96,000 per year. What is the breakeven production rate per year of the company? Blank 1 unitsarrow_forwardA company is considering two alternatives for automating a certain process. Alternative A will have fixed costs of $42,000 per year and will require 2 laborers at $48 per day each. Together, these laborers can generate 100 units of product. Alternative B will have fixed costs of $56,000 per year, but with this alternative, the 3 laborers will generate 200 units of product. In determining the breakeven number of units Q, the total cost per year for Alternative B is represented as:a. [2(48)/100]Qb. [3(48)/200]Qc. [3(48)/200]Q + 56,000d. [2(48)/100]Q + 42,000arrow_forwardAssume there is a certain population of fish in a pond whose growth is described by the logistic equation. It is estimated that the carrying capacity for the pond is 2000 fish. Absent constraints, the population would grow by 210% per year.If the starting population is given by p0=400p0=400, then after one breeding season the population of the pond is given byp1p1 = After two breeding seasons the population of the pond is given byp2p2 =arrow_forward
- A student's course grade is based on one midterm that counts as 20% of his final grade, one class project that counts as 25% of his final grade, a set of homework assignments that counts as 50% of his final grade, and a final exam that counts as 5% of his final grade. His midterm score is 63, his project score is 82, his homework score is 90, and his final exam score is 70. What is his overall final score? What letter grade did he earn (A, B, C, D, or F)? Assume that a mean of 90 or above is an A, a mean of at least 80 but less than 90 is a B, and so on. His overall final score is nothing. (Type an integer or a decimal rounded to one decimal place as needed.) His letter grade is (1) (1) C. F. D. B. A.arrow_forwardAn online commercial directory service must decide between composing the ads for its clients inhouse or paying a production company to compose them. To develop the ads in-house, the company will have to purchase computers, printers, and a database management system at an estimated cost of $42,000. This equipment will have a useful life of 3 years, after which it will be sold for $2000. The employee who creates the ads will be paid $55,000 per year. In addition, each ad will have an average cost of $10. Alternatively, the company can outsource development at a flat fee of $21 per ad. At an interest rate of 10% per year, how many ads must the company sell each year for the options to just break even?arrow_forwardWHICH IS MORE ECONOMICAL? USE METHOD OF COMPARISON OF ALTERNATIVES! In a cold storage plant, it is desired to determine whether to use insulation two inches thick or three inches thick in insulating the walls of the cold storage ware house. Heat absorb through the walls without insulation would cost P96.00 per year per squaremeter. A two-inch insulation will cost P30.40 per square meter and will cut out 89% of the loss. A three-inch insulation will cut out 92% of the loss and will cost P65.00 per square meter. Using a life 15 years for the insulation with no salvage value and a minimum attractive return of 8%, what thickness of insulation should be used?arrow_forward
- Focus on the difference between feasible alternatives Insulated concrete forms (1CF) can be used as a substitute for conventional wood framing in building construction. Heating and cooling bills will be about 50% less than in a similar wood-framed building in upstate New York. An ICF home will be approximately 10% more expensive to construct than a wood-framed home. For a typical 2,300 ft^2 home costing $180 ft^2 to construct in upstate New York and costing $230 per month to heat and cool, how many months does it take for a 2,300 ft squared 2 ICF home to pay back its extra construction cost?arrow_forwardAuthentic Serai Halia is a catering firm that serves variety of authentic traditional Malaysian cuisine. Wasimuddin AW and Saprang J, the restaurant owners want to expand their successful operations to caterfoods for some major events in a neighboring town. After investigating their market segment, they have narrowed their choices to two proposals. First proposal is to project a capacity of 10 events per month.This would result in a cost of RM2,500 a month plus a cost of RM250 per event. Another proposal would have a capacity of 20 events per month, a cost of RM3,200 per month, and a cost of RM190 per event. The firm would charge RM480 for each event. Determine: (a) The break-even volume for each proposal.(b) The profit (or loss) would each proposal produce if monthly demand is 12 events.(c) If monthly demand is 25 events, which proposal would yield the greater profit?arrow_forward(a) How long would it take to recover an investment of $245,000 in enhanced CNC controls that include axis control to eight axes on the milling model, if the associated income is $92,000 per year, expense is $38,000 per year, and the salvage value is estimated to be 15% of the first cost? Use a MARR of 15% per year. (b) Also, write the spreadsheet function that determines np.arrow_forward
- The profit relation for the following estimates at a quantity that is 10% above breakeven is: Fixed cost = $500,000 per year Cost per unit = $200 Revenue per unit = $250a. Profit = 200(11,000) - 250(11,000) - 500,000b. Profit = 250(11,000) - 500,000 - 200(11,000)c. Profit = 250(11,000) - 200(11,000) + 500,000d. Profit = 250(10,000) - 200(10,000) - 500,000arrow_forwardeither of the following two equations can be applied to determine the amount necessary to recover invested capital and a required return: CR1 = −P(A∕P,i,n) + S(A∕F,i,n) or CR2 = −[(P – S)(A/P,i,n) + S(i)] For an alternative that has a first cost of $50,000 and a salvage value of $5,000 after its 5-year life, show that the capital recovery calculated using either of these equations is exactly the same. Use an interest rate of 10% per year.arrow_forwardAfter 15 years of employment in the airline industry, John started his own consulting company to use physical and computer simulation in the analysis of commercial airport accidents on runways. He estimates his average cost of new capital at 8% per year for physical simulation projects, that is, where he physically reconstructs the accident using scale versions of planes, buildings, vehicles, etc. He has established 12% per year as his MARR. What net rate of return on capital investments for physical simulation does he expect?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
Valuation Analysis in Project Finance Models - DCF & IRR; Author: Financial modeling;https://www.youtube.com/watch?v=xDlQPJaFtCw;License: Standard Youtube License