Contemporary Engineering Economics (6th Edition)
6th Edition
ISBN: 9780134105598
Author: Chan S. Park
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 6, Problem 43P
To determine
Calculate the payment for extension.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
You are weighing the economics of installing a triple-glazed energy efficient window system in your building. The following life cycle costs and savings are provided. The study period is 25 years, and the discount rate is 10%. Is this an economically viable approach based on the Savings-to-Investment Ratio (SIR)? Triple- Glazed Energy Efficient Windows: Window Quantity takeoff: 10000 sf Initial Cost: $100/sf Annual Operating Costs: $2.5/sf Annual Energy Saving: $10/sf
A new piece of equipment costs $100,000. The life of the equipment is estimated to be 15
years. During the first five years there will be no maintenance cost for it but after that the
annul maintenance cost will be $20,000. The equipment is assumed to be useless at the
end of its life. Compute the equivalent annual cost of owning it by taking į = 10%.
Kiwidale Dairy is considering purchasing a new ice-cream maker. Two models, Smoothie and
Creamy, are available and their information is given below (all costs and profits are in dollars):
Smoothie
Creamy
$17500
$37000
14 years
$3500
$1000
$4000
First Cost
Service Life
Annual Profit
Annual Operating Cost
Salvage Value
12 years
$10500
$3050
$4200
Calculate the present worth of the smoothie machine for one life cycle (no repeated
lives), if the interest rate is 10%. Round your answer to two decimal places.
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
Knowledge Booster
Similar questions
- A car is needed for three years. Plans A and B for acquiring the car are being evaluated. An effective annual interest rate of 10% is to be used. Which plan is economically superior? Plan A: Lease the car for $0.25/mile (all inclusive) Plan B: Purchase the car for $30,000. Keep the car for three years. Sell the car after three years for $7200. Pay $0.14 per mile for oil and gas. Pay other costs of $500 per year.arrow_forwardAnswer fast....arrow_forwardBackground: A client is contemplating on purchasing a new high efficiency pump and motor, with an initial cost of $10,000. The pump has a lifetime of 15 years and is estimated to save approximately $1,000 per year. There is an additional maintenance cost of $300 per year associated with this new pump. The pump will have a salvage value of $0 at the end of its lifetime. Assume the interest rate is 4%. Problem: What is the annual value of the pump?arrow_forward
- Question 7 Question 4.30 Problem Value = 5 Diana usually uses a three-year payback period to determine if a project is acceptable. A recent project with uniform yearly savings over a five-year life had a payback period of almost exactly three years, so Diana decided to find the project's present worth to help determine if the project was truly justifiable. However, that calculation didn't help either since the present worth was exactly 0. What interest rate was Diana using to calculate the present worth? The project has no salvage value at the end of its five-year life. Diana's interest rate was (just input the number...and round to the nearest whole pecent): ____________% [5/5]arrow_forwardQuestion 2 A common economic analysis objective is to find out whether it is more profitable to purchase an asset rather than rent it. A simple case of this dilemma is currently being analyzed by a private company which wants to procure a pick-up truck for regular operation. For the next 24 months, the truck can be leased or purchased. The truck costs $9,500 if purchased now in cash. If leased, the monthly lease is $358 with the first payment due by the end of the first month. At the end of the lease term, 24 months, the truck is returned to the auto dealer with expected final repair cost of $1,000 to be paid immediately before return to dealer. If purchased, the truck can be financed through monthly payments. The financing nominal interest rate is to be negotiated with the dealer. The financing will require $2,000 down payment (paid now) and monthly payments starting at the end of the first month. After 24 months, it is expected to be worth half its purchase price. [a] Over what range…arrow_forwardNestle Ltd. It produces its premium plant food in 50 Kg bags. Demand is 100,000 Kgs. per week and the plant operates 52 weeks each year. Nestle can produce 250,000 Kgs. per week. The setup cost is OMR 200 and the annual holding cost rate is OMR 0.30 per bag. What will the optimal duration of the downtime in years? a. 0.065. None is correct ac 0.069 d. 0.088 e. 0.721 f. 0.076arrow_forward
- Clorox is thinking about introudcing a new brand of cleaning products. Marketing and developing the new products will cost 585 million dollars. In one year, the new products will generate a cash flow of 32 million dollars. In two years, the new products will generate a cash flow of 59 million dollars. In three years, the new products will generate a cash flow of 83 million dollars. After that, cash flows are expected to grow by 2% forever. If the cost of capital is 11%, what is the NPV of this project (in millions)? (Enter your answer in millions. i.e. 5.5 million, not 5,500,000 )arrow_forwardUse a calculator for this exercise.Suppose you obtain a five-year lease for a Porsche and negotiate a selling price of $143,000. The annual interest rate is 8.4%, the residual value is $76,000, and you make a down payment of $7000. Find each of the following. (a) The net capitalized cost$ (b) The money factor (rounded to four decimal places)(c) The average monthly finance charge (rounded to the nearest cent)$ (d) The average monthly depreciation (rounded to the nearest cent)$ (e) The monthly lease payment (rounded to the nearest cent)$arrow_forwardA program to improve a ferry system by adding new technology has much promise. The new system will cost $5 million with an annual operating cost of $900,000 over the 30-year anticipated lifespan. The benefits are expected to be $2.0 million in the first year of operation and grow at a constant rate of 4% per year. The municipal government who runs the ferry uses a 5% discount rate to evaluate its new systems. Compute the net present value.arrow_forward
- A company is about to invest in a joint venture research and development project with another company. The project is expected to last nine years, but yearly payments the company makes will begin immediately (a payment is made today, and the last payment is nine years from today). Salaries will account for $50,000 of each payment. The reminder of each payment will cover equipment costs and facility overhead. The initial (immediate) equipment and facility cost is $50,000. Each subsequent year this figure will drop by $5000 until a cost of $25000 is reached, after which the costs will remain constant until the end of the project. a) Draw a cash flow diagram to illustrate the cash flows for this project. b) At an interest rate of 10%, what is the total future worth of all project payments at the end of the nine years?arrow_forwardA company is developing a new electronic product. It expects to spend $38 million on Research and Development and then another $6 million on Manufacturing Engineering. After completing all this, the company expects a cost of $15 per unit to manufacture and plans to build in a profit of $5 per unit into the price. The company needs to recover the cost of R&D plus Manufacturing Engineering over five years through sales of 4 million units over those five years. What will the company need to establish as the sales price for the unit?arrow_forwardA contractor has purchased a wheel loader for $115,000 and plans to use it for 2,000 hours per day. The cost of one set of tires is $25,000. At this usage rate, the contractor anticipates disposing of the loader after using it for 10 years and realizing a salvage value of $35,000. The flywheel horsepower rating of the loader's diesel engine is 105 horsepower. The interest rate is 10%. The loader operator will earn $34.00 per hour including fringe benefits, and diesel fuel costs $1.20 per gallon. How much is the contractor's hourly ownership cost for the loader if using time value money analysis?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