Engineering Economy
16th Edition
ISBN: 9780133582819
Author: Sullivan
Publisher: DGTL BNCOM
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Textbook Question
Chapter 6, Problem 2P
The Consolidated Oil Company must install antipollution equipment in a new refinery to meet federal clean-air standards. Four design alternatives are being considered, which will have capital investment and annual operating expenses as shown below. Assuming a useful life of 8 years for each design, no market value, a desired MARR of 10% per year, determine which design should be selected on the basis of the PW method. Confirm your selection by using the FW and AW methods. Which rule (Section 6.2.2) applies? Why? (6.4)
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Six sites have been identified for a parking lot in downtown Beirut. Because the sites
are plots of land, their salvage value and investment cost are identical. A 10-year
study period has been specified, and the MARR is 18% per year. (Figures below are
in thousands of dollars).
Press
A
B
C
D
E
F
Capital Investment
$100
$150
$250
$400
$500
$700
Annual Revenues minus Expenses
$15
$37.5
$50
$92.5
$112.5
$142.5
If the MARR=18%, Which site should be chosen ?
On the same excel spreadsheet use the following methods:
a- Present Worth
b- Annual Worth
C- IRR
The Consolidated Oil Company must install antipollution equipment in a new refinery to meet federal clean-air standards. Four design alternatives are being considered, which will have capital investment and annual operating expenses as shown. Assuming a useful life of 8 years for each design, no market value, a desired MARR of 10% per year, determine which design should be selected on the basis of the PW method. Confirm your selection by using the FW and AW methods. Which rule applies? Why?
Chapter 6 Solutions
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
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- Decision D6, which has three possible choices (X, Y, or Z), must be made in year 3 of a 6-year study period in order to maximize EPW). Using an MARR of 16% per year, the investment required in year 3, and the estimated cash flows for years 4 through 6, determine which decision should be made in year 3. High Low High Y D6 Low High Low Investment, Cash Flow, (Year Cash Flow, $1000 3) Cash Flow, $1000 (Year 6) Cash Flow, Outcome Year 3 (Year 4) $1000 (Year 5) Probability 3 High (X) $-190,000 $50 $50 $50 0.58 $40 Low (X) High (Y) Low (Y) High (Z) Low (Z) $30 $40 $30 $170 $-30 $20 $50 $30 $150 $-30 0.42 $-54,000 $30 $30 $190 $-30 0.45 0.55 $-240,000 0.7 0.3 The present worth of X is $ [ The present worth of Y is $ The present worth of Z is $ Select decision branch Yarrow_forwardThe PW-based relation for the incremental cash flow series to find A/* between the lower first-cost alternative X and alternative Y has been developed. 0=-38,000+9000(P/A‚¡ *,10) + (-2000(P/F,Ai*,10)) Determine the highest MARR value for which Y is preferred over X. Any MARR value less than % favors Y.arrow_forwardPlz fast.arrow_forward
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