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 68APQ
To determine

Selection of alternatives.

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A construction company is planning to invest for the purchase of a heavy construction equipment which will be used at a construction site. There are three feasible alternatives and the detailed cash flow of all the alternatives are presented in the table. Each alternative has the useful life of 8 years. If the company's MARR is 12% per year, use an appropriate rate of return method to determine which alternative, if any, the company should choose. Alternatives 1 2 3 Initial investment ($) 2 700 000 3 200 000 2 400 000 Annual saving Salvage value Useful life (Years) ($) 525 000 640 000 415 000 ($) 710 000 860 000 590 000 8 8 8
The survey firm of Layer, Anderson, and Pope (MAP) LLP is considering the purchase of a pieceof new GPS equipment. Data concerning the alternative under consideration are presented below.First Cost $28,000Annual Income 7,000Annual Costs 2,500Recalibration at end of Year 4 4,000Salvage Value 2,800If the equipment has a life of eight years and MAP’s minimum attractive rate of return (MARR) is5%, what is the annual worth of the equipment?
ChemCo Enterprises is the manufacturer of Ultra-Dry, a hydrophobic coating that will waterproofanything. Over a 5 year period, the costs associated with the pilot test product line were as follows: first cost of $43,000 and annual costs of $18,000. Annual revenue was $40,000 and used equipment was salvaged for $4,000. What rate of return did the company make on the product?

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Basics Of Engineering Economy

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