Engineering Economy (17th Edition)
17th Edition
ISBN: 9780134870069
Author: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher: PEARSON
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Textbook Question
Chapter 6, Problem 3P
One of the mutually exclusive alternatives below must be selected. Base your recommendation on ∆ (Sauer–Glock) cash flows when the MARR = 8% per year. (6.4)
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Determine the FW of the following engineering project when the MARR is 15% per year. Is the project acceptable? (5.4)
*A negative market value means that there is a net cost to dispose of an asset.
Investment cost Expected lifeMarket (salvage) value* Annual receiptsAnnual expenses
$10,000 5 years -$1,000 $8,000 $4,000
A deep water port for imported liquefied natural gas (LNG) is needed for three years. At the end of the third year, it will cost more to dismantle the LNG facility than it
produces in revenues. The cash flows are estimated as follows:
The IRR for this LNG facility is closest to which choice below?
Choose the closest answer below.
A. The IRR for the LNG facility is 9.5% per year.
B. The IRR for the LNG facility is 4.7% per year.
C. The IRR for the LNG facility is 12.2% per year.
D. The IRR for the LNG facility is 14.6% per year.
EOY
0
1
2
3
Net Cash Flow
- $54 million
44 million
40 million
- 24 million
An industrial coal-fired boiler for process steam is
equipped with a 10-year-old electrostatic precipitator
(ESP). Changes in coal quality have caused stack
emissions to be in noncompliance with federal
standards for particulates. Two mutually exclusive
alternatives have been proposed to rectify this problem
(doing nothing is not an option). The MARR is 9% per
year. Make a recommendation regarding which
alternative to select.
3. An industrial coal-fired boiler for process steam is equipped with a 10-year-old electrostatic
precipitator (ESP). Changes in coal quality have caused stack emissions to be in noncompliance
with federal standards for particulates. Two mutually exclusive alternatives have been proposed
to rectify this problem (doing nothing is not an option).
Capital investment
Annual operating expenses
Useful Life
New Baghouse
$1,140,000
$115,500
10 years
New ESP
$992,500
$73,200
10 years
The MARR is 9% per year. Make a recommendation regarding which alternative to select.
Chapter 6 Solutions
Engineering Economy (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
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- One of the mutually exclusive alternatives below must be selected. Base your recommendation on A(Sauer-Glock) cash flows when the MARR = 15% per year. EOY EOY P/5 10 20 10 20 2P 2P Glock 40 Sauer 45 ..... The IRR on A(Sauer-Glock) is %. (Round to two decimal places.)arrow_forwardincremental rate of return analysis MARR = 20% %3| 1st 0=-8000 + 12.886,63(P/A,i*,15) + 533,33(P/Fi",15) I*= ? 2nd 0=-2800 + 864,87(P/A,i",15) + 186,67(P/F,i*,15) 1*= ? 3rd 0=-2960 + 1297,32(P/A,i*,15) + 197,33(P/F,i*,15) |*= ? wie 4th 0=-1040 + 2767,6(P/A,i*,15) + 69,33(P/E.i*,15) I*2 0=-2000 + 2508,13(P/A.i*,15)+ 133,34(P/E.i*,15) I*= ?arrow_forwardGive proper answer without photo answer and take a likearrow_forward
- Please fast answerarrow_forwardNonearrow_forwardOne of the mutually exclusive alternatives below must be selected. Base your recommendation on A(Sauer-Glock) cash flows when the MARR = 8% per year. Q Q 0 P ΕΟΥ 5 3P Glock 40 The IRR on A(Sauer-Glock) is 9.11%. (Round to two decimal places.) 5 SIIS 0 3P ΕΟΥ 5 Sauer 45 P/5 1 10arrow_forward
- Hand written solutions are strictly prohibited.arrow_forwardCapital Investment Annual Revenues Annual Expenses MV at end of useful life Useful Life IRR Alternative 1 $16,000 $7,000 $2,400 $1,600 4 years 9.1% Alternative 2 $23,000 $13,000 $5,000 $600 12 years 33.7% □arrow_forwardIf the interest rate is 8% per year, what decision would you make based on the decision tree diagram in the shown Figure ?arrow_forward
- 5.15arrow_forwardNadine Chelesvig has patented her invention. She is offering a potential manufacturer two contracts for the exclusive right to manufacture and market her product. Plan A calls for an immediate single lump sum payment to her of $170,000. Plan B calls for an annual payment of $14,000 plus a royalty of $1.60 per unit sold. The remaining life of the patent is 10 years. Nadine uses a MARR of 10%/year. What must be the uniform annual sales volume of the product for Nadine to be indifferent between the contracts, based on an annual worth analysis? unitsarrow_forwarde2arrow_forward
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