Engineering Economy, Student Value Edition (17th Edition)
Engineering Economy, Student Value Edition (17th Edition)
17th Edition
ISBN: 9780134838137
Author: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher: PEARSON
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Chapter 8, Problem 28P
To determine

Calculate the annual worth.

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Because retail supermarket corporations operate on a low ROR, it is common to use a market MARR of about 3% per year. What real return rate is implied from a market interest rate of 3% per year when the annual inflation rate is 4% per year? Explain your answer
Better Corporation can purchase a piece of equipment now for $120,000 or buy it 4 years from now for $188,000. The MARR requirement for the plant is a real return of 14% per year. If an inflation rate of 6% per year must be accounted for, what is the Future Value with inflation? a) $188,000 b) $255,873 c) $ 88,169 d) $120,000 Should the company buy the machine now or later? a) Now b) Later
Colgate-Palmolive can purchase a piece of equipment now for $80,000 or buy it 3 years from now for an estimated $128,000. The MARR requirement is a real return of 15% per year. If an inflation rate of 4% per year must be accounted for, should the company buy the machine now or later?
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