Engineering Economy
16th Edition
ISBN: 9780133582819
Author: Sullivan
Publisher: DGTL BNCOM
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Textbook Question
Chapter 9, Problem 13P
Use the PW method to select the better of the following alternatives:
Assume that the defender was installed five years ago. The MARR is 10% per year.
Definition of alternatives:
A: Retain an already owned machine (defender) in service for eight more years.
B: Sell the defender and lease a new one (challenger) for eight years.
Alternative A (additional information):
Cost of defender five years ago = $500,000
BV now = $111,550
Estimated MV eight years from now = $50,000
Present MV = $150,000
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Use the following table to work Problems 5 to 9.
Minnie's Mineral Springs, a single-price monopoly,
faces the market demand schedule:
Price
Quantity demanded
(dollars per bottle)
10
8
(bottles per hour)
0
1
6
2
4
3
2
4
0
5
5. a. Calculate Minnie's total revenue schedule.
b. Calculate its marginal revenue schedule.
6. a. Draw a graph of the market demand curve
and Minnie's marginal revenue curve.
b. Why is Minnie's marginal revenue less than
the price?
7. a. At what price is Minnie's total revenue maxi-
mized?
b. Over what range of prices is the demand for
water from Minnie's Mineral Springs elastic?
8. Why will Minnie not produce a quantity at which
the market demand for water is inelastic?
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Chapter 9 Solutions
Engineering Economy
Ch. 9 - Prob. 1PCh. 9 - Prob. 2PCh. 9 - Prob. 3PCh. 9 - Prob. 4PCh. 9 - Prob. 5PCh. 9 - Prob. 6PCh. 9 - Prob. 7PCh. 9 - A city water and waste-water department has a...Ch. 9 - Prob. 9PCh. 9 - Prob. 10P
Ch. 9 - Prob. 11PCh. 9 - Prob. 12PCh. 9 - Use the PW method to select the better of the...Ch. 9 - Prob. 14PCh. 9 - Prob. 15PCh. 9 - Prob. 16PCh. 9 - Prob. 17PCh. 9 - Prob. 18PCh. 9 - Prob. 19PCh. 9 - Prob. 20PCh. 9 - Prob. 21PCh. 9 - Prob. 22PCh. 9 - Prob. 23PCh. 9 - Prob. 24PCh. 9 - Prob. 25PCh. 9 - Prob. 26PCh. 9 - Prob. 27SECh. 9 - Prob. 28SECh. 9 - Prob. 29CSCh. 9 - Prob. 30CSCh. 9 - Prob. 31CSCh. 9 - Prob. 32FECh. 9 - Prob. 33FECh. 9 - Prob. 34FECh. 9 - Prob. 35FECh. 9 - Prob. 36FE
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