Engineering Economy
16th Edition
ISBN: 9780133582819
Author: Sullivan
Publisher: DGTL BNCOM
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Question
Chapter 6, Problem 81FE
To determine
Calculate the present worth.
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This is the complete homework question.
The ROR analysis evaluates the increments between two alternatives in pairwise comparisons.
Select one:
O a. True
Ob. False
Alternative A and B are two mutually exclusive cost alternatives, and one of them must be
selected. Using Incremental Analysis, which of the alternatives should be recommended based on
ERR (the External Rate of Return)? ·
MARR (Minimum acceptable rate of return) is 12% per year while the re-investment rate is
10% per year.
The study period is 20 years. Assume repeatability is appropriate for this comparison.
Alternative
A
B
$ (101,000)
$ (6,000)
20 years
$ (6,000)
$ (18,500 )
10 years
Initial capital investment
Annual operating expenses
Useful life
Salvage value
None
None
Chapter 6 Solutions
Engineering Economy
Ch. 6 - Prob. 1PCh. 6 - The Consolidated Oil Company must install...Ch. 6 - Prob. 3PCh. 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 - Prob. 9PCh. 6 - Consider the following cash flows for two mutually...
Ch. 6 - Prob. 11PCh. 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 - Prob. 18PCh. 6 - Prob. 19PCh. 6 - Prob. 20PCh. 6 - Prob. 21PCh. 6 - Prob. 22PCh. 6 - Prob. 23PCh. 6 - Prob. 24PCh. 6 - Prob. 25PCh. 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 - Prob. 30PCh. 6 - Prob. 31PCh. 6 - Prob. 32PCh. 6 - Prob. 33PCh. 6 - Potable water is in short supply in many...Ch. 6 - Prob. 35PCh. 6 - Prob. 36PCh. 6 - In the design of a special-use structure, two...Ch. 6 - Prob. 38PCh. 6 - a. Compare the probable part cost from Machine A...Ch. 6 - Prob. 40PCh. 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 - Prob. 54PCh. 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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Similar questions
- The following five alternatives that are evaluated by the rate of return method, If the alternatives are independent and the MARR is 15% per year, the onels) to select is (are) Incremental ROR, N. When Compared with Alternative Initial Investment,S Alternative Alternative A BC DE 10.6 27.3 194 353 25.0 -25,000 -35,000 13.1 38.5 24.4 -40,000 13.4 46.5 27.3 26.8 -60,000 25.4 -75,000 20.2 Only D O Only D and E O Only A D, and E O Only Earrow_forwardQuestions: A.) Future worth of Alternative A, B, C & D B.) Using the future worth method, which Alternative should be chosen? C.) Annual worth of Alternative A, B, C, & D D.) Using Annual worth method, which alternative should be chosen?arrow_forwardBahrain Metals company is considering installing solar roof panels to reduce the cost of the electricity bills. The ROR of Alternative A is 8%, the Future Worth of Alternative B is $17,234, the Present Worth of Alternative C is $11,946, and the Annual Worth of Alternative D is $2,948. Assume all alternatives have a 5-year useful life and that the MARR for the company is 10%. The alternative that should be chosen is: O A C Do nothing Not enough information B.arrow_forward
- urgent i will 10 upvotesarrow_forwardThree mutually exclusive electric-vehicle battery systems are being investigated by a large automobile manufacturer. Pertinent data are given below: Solve, a. Use the PW method to select the best battery system. The MARR is 15% per year, and the system chosen must provide service for 10 years. Assume repeatability. b. Confirm your recommendation in Part (a) using the IRR method.arrow_forwardWhat is the rate of return for the following incremental analysis. Investment 1 2 Initial Investment $29,857 $40,955 Annual Return $14,657 $13,650 Salvage Value $29,857 $40,955arrow_forward
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