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 58P
To determine
Calculate the annual worth.
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A pump for a reservoir must be operated continuously (8,760 hours per year). In the event of a large storm, the electricity from the local utility’s power grid may be interrupted for an indefinite period of time. To deal with this emergency situation, two mutually exclusive backup diesel generators are being investigated. One of them will be chosen for implementation. Relevantdata are provided as follows: If salvage values of both generators are negligible and the study period is 60 years, which generator should be chosen? The MARR is 10% per year
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NEV, Inc. wants to evaluate two new methods that will improve their productivity. Both alternatives have 22 years of service life and NEV uses MARR of 13%. Alternative A has a first cost of $3,315,000 Maintenance cost will start end of year three due to an incentive in the contract with the manufacture that will give free maintenance in the first 2 years. The maintenance cost at end of year three is $42,000 and will increase by $2,700 starting end of year four and continue to increase with the same value thereafter till the end of its service life. A three-times major repair will occur. The first one is at end of year 8 that will cost $56,000, the second one is at end of year 13 and will cost $32,000 and the third and last major repair is $27,500 at end of year 19. The expected revenues from this alternative are $572,000 per year starting end of year 1 and this option will have a salvage value of $840,000 at the end of its service life. Alternative B has a first cost of $2,570,000 and…
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 remotely situated fuel cell has an installed cost of $2,000 and will reduceexisting surveillance expenses by $350 per year for eight years. The border security agency’s MARR is 10% per year. Solve, a. What is the minimum salvage (market) value after eight years that makes the fuel cell worth purchasing? b. What is the fuel cell’s IRR if the salvage value is negligible?arrow_forwardA CNC machine which was purchased five years ago for $170,000 is being considered for replacement. Its current first cost is estimated to be $130,000. Its AOC is $75,000 in year one and increasing by $4,000 each year. Its salvage value is $15,000 regardless of when the asset is retired. Using a MARR of 10% per year, determine the ESL and the respective AW. Its maximum useful life is three years.arrow_forwardA new city truck can be purchased for $2,400,000. Its expected useful life is six years, at which time its market value will be zero. Annual receipts less expenses will be approximately $700,000 per year over the seven-year study period. Using the PW method and a MARR of 9%, this investment is considered to be acceptable. (A) True B) Falsearrow_forward
- Please Help mearrow_forwardIn a replacement analysis problem, the following information is available Initial cost : 12.000 YTL Annual maintenance cost: None in the first three years 2.000 YTL at the end of the 4th year 2.000 YTL at the end of the 5th year 2,500 YTL per year after the 5th year will increase smoothly (at the end of the 6th year, 4.500 YTL 7.000 YTL at the end of the 7th year, etc. The scrap value in any given year is zero. Take the discount rate of 10% and ignore income taxes. Calculate the most economical life for this candidate equipment. A) 6 B) 2 C) 5 D) 8 E) 4arrow_forwardAn injection molding system has a first cost of $170000 and an annual operating cost of $73000 in years 1 and 2, increasing by $5000 per year thereafter. The salvage value of the system is 25% of the first cost regardless of when the system is retired within its maximum useful life of 5 years. Using a MARR of 12.00 % per year, determine the ESL and the respective AW value of the system. The ESL is year(s) and AW value of the system is $arrow_forward
- A building supplies distributor purchased a gasoline-powered forklift truck 4 years ago for $8,000. At that time, the estimated useful life was 8 years with a salvage value of $800 at the end of this time. The truck can now be sold for $2,500. For this truck, average annual O&M expenses for year j have been Cj = $2, 000 + $400(j − 1) Now the distributor is considering the purchase of a smaller battery-powered truck for $6,500. The estimated life is 10 years, with the salvage value decreasing by $600 each year. Average annual O&M expenses are expected to be $1,200. If a MARR of 10% is assumed and a 4-year planning horizon is adopted, based on an annual worth cash flow approach should the replacement be made now?arrow_forwardA manufacturer has been ordered to stop discharging acidic waste into the city sewer. Your analysis shows that the company should choose one of the following systems: System Installed Cost H J $25,000 Your Answer: $35,000 Annual O&M Cost $1,000 in the first year, but grows by 10% each year $500 in the first year, but grows each year by $100 Salvage Value $2,000 $5,000 If the life span of each project is 20 years and interest is assumed to be Y%, which system should be purchased? 4arrow_forwardI see some mistakes on solve equations for x2. Please review so is a grade-3 polinomic equation: 0,08/(x2)2 + 12x2 = 15.000 Confirm, Thanksarrow_forward
- Could you help me with this question, I would greatly apprecite it. Thank you!arrow_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_forwardAn expansion of the current BIM (Building Information Model) software has been proposed to First Financial, the building’s owner. A total installed cost of $120,000 is expected to generate additional savings of $40,000 per year for 10 years, after which time the software will be replaced with no salvage value. The annual M&O cost is expected to be $10,000 the first year and increase by an arithmetic gradient G between $1000 and $5000 per year thereafter. Determine if the expanded BIM is sensitive to gradient increases of $1000 (optimistic), $3000 (most likely), and $5000 (pessimistic) per year. Use AW analysis and a MARR of 10% per year.arrow_forward
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