Contemporary Engineering Economics (6th Edition)
6th Edition
ISBN: 9780134105598
Author: Chan S. Park
Publisher: PEARSON
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Question
Chapter 6, Problem 2P
To determine
Calculate the annual worth.
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Consider the accompanying cash flow diagram represented below. Compute the equivalent annual worth at i= 9%.
$21,000
Answer- $3681.26
Years
1
3
4
6
$4,000 $4,000
$7,000
$10,000,
$13,000
$16,000
Consider the accompanying cash flow diagram. Compute the equivalent annual
worth at i
=
13%.
0
$2,000
$8,000
$3,000
1 2
$4,000
$4,000
$5,000
3 4
Years
$6,000
$7,000
$4,000
5 6
$1,000
Ans: $ 627.5
You are considering buying a company for $699, 000. If you expect the
business to earn $97,000 per year, how long is the discounted payback
period if your MARR is 5% ? (in years)
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
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- You are being asked to evaluate the worthiness of an investment that requires you to spend $120,000 today in return for receiving $25,000 each year for seven years (starting one year from now). At the end of the seven year study period, the investment can be sold for $10,000. The MARR = 12% per year. Compute the AW of this investment. Round your answer to the nearest dollar. Answer should be -301arrow_forwardThe heat loss through the windows of a home is estimated to cost the homeowner $612 per year in wasted energy. Thermal windows will reduce heat loss by 93% and can be installed for $1,932. The windows will have no salvage value at the end of their estimated life of ten years. Determine the net present equivalent value of the windows if the interest rate is 8%.arrow_forwardConsider the accompanying cash flow diagram below. Compute for the equivalent annual worth at i=12%. 7,000 6,000 4,000 5,000 3,000 2,000 2 4 1,000 4,000 4,000 8,000arrow_forward
- Cleanville Environmental Services is considering investing in a new water treatment system. On the basis of the information given below for two alternatives, a fully automated and a partially automated system, construct a spreadsheet for computing the annual worths for each alternative with a variable MARR. Through trial and error, determine the MARR at which the annual worth of the two alternatives is equivalent. Year 0 1 2 3 4 5 6 7 8 9 10 Fully Automated System Disburse- ments $1 000 000 30 000 30 000 80 000 30 000 30 000 80 000 30 000 30 000 80 000 30 000 Net Cash Flow 0 - $1 000 000 270 000 270 000 220 000 270 000 270 000 220 000 270 000 270 000 220 000 270 000 Receipts $ 300 000 300 000 300 000 300 000 300 000 300 000 300 000 300 000 300 000 300 000 Partially Automated System Disburse- ments $650 000 30 000 30 000 35 000 35 000 40 000 40 000 45 000 45 000 50 000 50 000 Net Cash Flow Receipts $ 0 - $650 000 220 000 190 000 220 000 190 000 220 000 185 000 220 000 185 000 220 000…arrow_forwardSuppose that you purchase a tractor for $170,000 and sell it in 10 years for $50,000. What is the annualized cost (capital recovery) if your required return on capital is 12%?arrow_forwardDetermine the IRR for an equipment that costs $250,000 and would provide positive cash flows of $100,000, $90,000, $80,000, and $20,000 at the end of each year for the next four years. (Try i = 7% &i=8%) 9.75% 7.53% 10.90% 9.38%arrow_forward
- Given the cash flow diagram, what is the future worth of the cash flow at the end of six years? what is the correct answer a P2, 328.66 b. 1, 846.85 c. P1.758.26 d. P1, 332.16arrow_forwardA new computer network system is being considered for an organization. The initial cost of the system is $375,000. Annual maintenance and operating costs would be $22,000 per year. The organization has a desired rate of interest of 10% for its projects. The expected annual income from the computer network are expected to be $97,000. Determine the present worth if they are going to use it for four (4) years. PW = -$13,925 PW-$13,726 PW = $11,725 PW = $15,725.arrow_forwardA company is considering installing solar panels on a roof. The initial installation will cost $30,000, but it will save $260 in electricity each month and last 20 years. If MARR = 0.5%, what is the discounted payback period of the solar panels?arrow_forward
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