Basics Of Engineering Economy
Basics Of Engineering Economy
2nd Edition
ISBN: 9780073376356
Author: Leland Blank, Anthony Tarquin
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Chapter 6, Problem 52P

(a):

To determine

Identify the number of i* values.

(b):

To determine

Calculate the internal rate of return.

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A company that manufactures general-purpose transducers invested $2 million 4 years ago in high-yield junk bonds. If the bonds are now worth $2.8 million, what rate of return per year did the company make on the basis of (a) simple interest, and (b) compound interest? (c) What is the spreadsheet function to find the answer for compound interest?
Las Cruces' Virgin Galactic is considering two materials for certain parts in a reusable space vehicle: carbon fiber reinforced plastic (CFRP) and fiber reinforced ceramic (FRC). The costs are shown below. Which should be selected on the basis of a present worth comparison if MARR = 10% per year? (a) Solve using tabulated factors. (b) (Spreadsheet exercises) Solve using single-cell functions. (c) Using your spreadsheet functions, will the selection change if the estimated life of the CFRP material is 4, rather than 2, years? Material CFRP First cost, $ Maintenance cost, $/year -29,000 Salvage value, $ 2,000 Life, years FRC -205,000 -235,000 -27,000 20,000 2 4
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Basics Of Engineering Economy

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