Engineering Economy (17th Edition)
17th Edition
ISBN: 9780134870069
Author: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher: PEARSON
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Chapter 6, Problem 56P
To determine
Calculate the incremental
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Vidhi is investing in some rental property in Collegeville and is investigating her
income from the investment. She knows the rental revenue will increase each year, but
so will the maintenance expenses. She has been able to generate the data that follows
regarding this investment opportunity. Assume that all cash flows occur at the end of
each year and that the purchase and sale of this property are not relevant to the study.
• If Vidhi's MARR = 6% per year, is this investment a profitable undertaking? Use
Future Worth method!
Year Revenue Year Expenses
1
$6,000 1
$3,100
2
6,200
2
3,300
6,300
3
3,500
6,400
4
3,700
6,500
5
3,900
6,600 6
6,100
6,700
7
4,300
6,800 8
4,500
6,900
4,700
7,000
4,900
3
4
5
6
7
8
9
10
9
10
!
Don't answer by pen paper and don't use Excel
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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- A distribution company is considering three different alternatives to satisfy their customer's demands. Their options are to rent a ready distribution center (D01), Rent and mobilize a center (D02), or outsourcing (OS). The estimate for each method is shown. The lifetime for D01, D02, and OS are 3, 6, and 2 respectively. MARR is 0.04 per year, and the percentage of change for all of the cases are 0 % Note: all units are in thousand $ D01 First Cost, $ Annual Operation Cost, $ Salvage Value, $ a: Calculate the Fw of D01? -136 -92 28 D02 OS -973 0 -59 -123 333 0arrow_forwardAn 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.arrow_forwardTwo electric motors (A and B) are being considered to drive a centrifugal pump. Each motor is capable of delivering 40 horsepower (output) to the pumping operation. It is expected that the motors will be in use 800 hours per year. If electricity costs $0.08 per kilowatt-hour and 1 hp = 0.746 kW, which motor should be selected if MARR = 6% per year? Refer to the data below. The AW for Motor A is $ Initial Cost Electrical Efficiency Annual Maintenance 5 years Click the icon to view the interest and annuity table for discrete compounding when the MARR is 6% per year. (Round to the nearest dollar.) Motor A $1,700 0.75 $50 Life Motor B $900 0.55 $80 5 yearsarrow_forward
- The ROR analysis evaluates the increments between two alternatives in pairwise comparisons. Select one: O a. True Ob. Falsearrow_forwardBulaklak Oil Company must install anti-pollution equipment in a new refinery in Bataan to meet clean air legislation. It is considering three types of equipment, and the following data are available:Use MARR = 20%, repeatability assumption and solution by PW.arrow_forwardAn aerodynamic three-wheeled automobile (the Dart) runs on compressed natural gas stored in two cylinders in the rear of the vehicle. The $13,000 Dart can cruise at speeds up to 85 miles per hour, and it can travel 90 miles per gallon of fuel. Another two-seater automobile costs $12,000 and averages 50 miles per gallon of compressed natural gas. If fuel costs $8.00 per gallon and MARR is 10% per year, over what range of annual miles driven is the Dart more economical? Assume a useful life of six years for both cars. Click the icon to view the interest and annuity table for discrete compounding when the MARR is 10% per year. ... Dart is more economical if you are planning on driving more per year. (Round to the nearest whole number.) miles orarrow_forward
- An aerodynamic three-wheeled automobile (the Dart) runs on compressed natural gas stored in two cylinders in the rear of the vehicle. The $15,000 Dart can cruise at speeds up to 85 miles per hour, and it can travel 95 miles per gallon of fuel. Another two-seater automobile costs $11,000 and averages 45 miles per gallon of compressed natural gas. If fuel costs $8.00 per gallon and MARR is 12% per year, over what range of annual miles driven is the Dart more economical? Assume a useful life of six years for both cars. Click the icon to view the interest and annuity table for discrete compounding when the MARR is 12% per year. Dart is more economical if you are planning on driving miles or more per year. (Round to the nearest whole number.)arrow_forwardurgent i will 10 upvotesarrow_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
- If the IRR of Alternative A is 10%, the IRR of Alternative B is 8% and the MARR is 6%, which of the following is true? OAlternative B is preferred over Alternative A Alternative A is preferred over Alternative B Both alternatives are preferred over the do nothing alternative Both b and c are truearrow_forwardAs supervisor of a facilities engineering department, you consider mobile cranes to be critical equipment. The purchase of a new, medium-sized truck-mounted crane is being evaluated. The economic estimates for the two best alternatives are shown in the following table. MARR is at 15% per year. You can use the assumption of repeatability in this case. Show that the same selection is made for the following methods:a. RORAI method b. AWC method c. PW methodarrow_forwardOne of the mutually exclusive alternatives below must be selected. Base your recommendation on A(Sauer-Glock) cash flows when the MARR=6% per year Q EOY a EOY P/5 ♡ 10 20 0 10 J 20 P 2P Glock 40 Sauer 45 The IRR on A(Sauer-Glock) is 13% (Round to two decimal places)arrow_forward
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