Engineering Economy, Student Value Edition (17th Edition)
17th Edition
ISBN: 9780134838137
Author: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Videos
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)
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Give typing answer with explanation and conclusion
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, Student Value Edition (17th Edition)
Ch. 6 - An oil refinery finds that it is necessary to...Ch. 6 - The Consolidated Oil Company must install...Ch. 6 - One of the mutually exclusive alternatives below...Ch. 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 - DuPont claims that its synthetic composites will...Ch. 6 - Prob. 10P
Ch. 6 - Which alternative in the table below should be...Ch. 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 - An old, heavily used warehouse currently has an...Ch. 6 - Prob. 19PCh. 6 - Two electric motors (A and B) are being considered...Ch. 6 - Two mutually exclusive design alternatives are...Ch. 6 - Pamela recently moved to Celebration, Florida, an...Ch. 6 - Environmentally conscious companies are looking...Ch. 6 - Prob. 24PCh. 6 - Two 100 horsepower motors are being considered for...Ch. 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 - Two electric motors are being considered to drive...Ch. 6 - Prob. 31PCh. 6 - Prob. 32PCh. 6 - Prob. 33PCh. 6 - Potable water is in short supply in many...Ch. 6 - Three mutually exclusive investment alternatives...Ch. 6 - Prob. 36PCh. 6 - A companys MARR is 10% per year. Two mutually...Ch. 6 - Prob. 38PCh. 6 - a. Compare the probable part cost from Machine A...Ch. 6 - A one-mile section of a roadway in Florida has...Ch. 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 - Use the imputed market value technique to...Ch. 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
Additional Business Textbook Solutions
Find more solutions based on key concepts
Drought cuts the quantity of wheat grown by 2 percent. If the price elasticity of demand for wheat is 0.5, by h...
Foundations of Economics (8th Edition)
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 Micro (book Only)
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)
• Illustrate and interpret shifts in the short-run and long-run aggregate supply curves.
Economics of Money, Banking and Financial Markets, The, Business School Edition (4th Edition) (The Pearson Series in Economics)
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
- 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
- What is FW of Design A, Design B, and Design C. Which alternative should be chosen. Do not round off in the solution.arrow_forwardDexcon Technologies, Inc., is evaluating two alternatives to produce its new plastic filament with low friction properties for creating custom bearings for 3-D printers. The estimates associated with each alternative are shown below. Using a MARR of 16% per year, which alternative has the better present worth and what is that value (select the closest value)? Method First Cost AOC, per Year Salvage Value Life DDM $170,000 $65,000 $4,000 2 years LS $350,000 $40,000 $29,000 4 years DDM with a PW--$473,000 LS with a PW --$445,900 LS with a PW --$222,055 DDM with a PW--$109,300arrow_forwardA municipal police department has decided to acquire an unnamed drone for aerial surveillance of a high-crime region in the city. Two drones are being studied and their data are provided in the table below. All alternatives are expected to have negligible salvage values at the end of 5 years. The police department's MARR is 8% per year. Which drone should be selected based on a. RORAI method? b. Annual Worth method? A Alternative Capital investment $740,000 Annual expenses $361,940 B Alternative Capital investment 1,840,000 Annual expenses $ 183,810arrow_forward
- Nikularrow_forwardThe cost of the extending a certain road at Yellowstone National Park is $1.7 million. Resurfacing and other maintenance are expected to cost $350,000 every 3 years with an interest rate of 6% per year. a) What is the Annual Worth based capitalized cost of the road? b) How will the answer (a) change if its Salvage is expected to be $3 million at the end of its useful Life?arrow_forwardDecision 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 18% 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 06 Low 2 High Low Investment, Cash Flow, (Year Cash Flow, $1000 Cash Flow, Year 31 3) (Year 4) $1000 (Year 5) Cash Flow, $1000 (Year 6) Outcome Probability 3 4 5 6 High (X) $-150,000 $50 $50 $50 0.5 Low (X) $40 $30 $20 0.5 High (Y) $-73,000 $30 $40 $50 0.45 Low (Y) $30 $30 $30 0.55 High (Z) $-240,000 $190 $170 $150 0.7 Low (Z) $-30 $-30 $-30 0.3 The present worth of X is $arrow_forward
- Four mutually exclusive alternatives are being evaluated, and their costs and revenues are itemized in the Table. If the MARR 15%per year and the analysis period is 12 years, use the PW method to determine PW1, PW2, PW3, PW4, and which one of those four is the best alternative ?arrow_forwardNo written by hand solution An electric switch manufacturing company is trying to decide between three different assembly methods. Method A has an estimated first cost of $30,000, an annual operating cost (AOC) of $4,000, and a service life of 2 years. Method B will cost $70,000 to buy and will have an AOC of $3,000 over its 4-year service life. Method C costs $115,000 initially with an AOC of $3,000 over its 8-year life. Methods A and B will have no salvage value, but Method C will have equipment worth 6% of its first cost.arrow_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. 0-34,000+ 9000(P/A,Ai*,10)+(-3,000(P/F,Ai*,10)) Determine the highest MARR value for which Y is preferred over X. (Round the final answer to three decimal places.) Any MARR value less than % favors Y.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