Engineering Economy
16th Edition
ISBN: 9780133582819
Author: Sullivan
Publisher: DGTL BNCOM
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Chapter 9, Problem 17P
To determine
Calculate the present wroth.
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Students have asked these similar questions
An equipment cost $90.000 initially. The market value the first year was 80,000
and has been declining at the rate of $6.000 yearly. The O & M costs in year 1
were $7.000 and have been increasing by $2.000 from year 2. Determine the
minimum cost life of this equipment for a MARR of 10 %.
Based on the chart below,
a. what is the economic life of this piece of equipment.
b. What is the minimum economic cost?
OM cost PWCost
Year
Cost
Salvage
EUAC
90000
1
7000
$96,363.64
80000
($26,000.00)
9000
$103,801.65
74000
(524.571.43)
3
11000
$112,066.12
68000
($24.519.64)
4
13000
$120,945.29
62000
($24.795.52)
15000
$130,259.11
56000
($25,189.37)
6
17000
$139,855.17
50000
(525.631.41)
7
19000
$149.605.17
44000
(526.091.88)
8
21000
$159,401.83
38000
($26,556.05)
9.
23000
$169,156.07
32000
($27,015.85)
10
25000
$178,794.65
26000
(527.466.63)
O a. 6 years b. $27,466.63
O a. 8 years b. $80.000
O a. 3 years b. $25,519.64
O a. 10 years b. $24.664.99
13-16 A 2000-pound, counterbalanced, propane forklift
can be purchased for $30,000. Due to the intended
service use, the forklift's market value drops 20%
of its prior year's value in Years 1 and 2 and then
declines by 15% until Year 10 when it will have
a scrap/market value of $1000. Maintenance of the
forklift is $500 per year during Years 1 and 2 while
the warranty is in place. In Year 3 it jumps to $750
and increases $750 per year thereafter. What is the
optimal life of the forklift using i = 10%?
A high-speed electronic assembly machine was purchased two years ago for $50,000. At the present time, it can be sold for $25,000 and replaced by a newer model having a purchase price of $42,500; or it can be kept in service for a maximum of one more year. The new assembly machine, if purchased, has a useful life of not more than two years. The projected resale values and operating and maintenance costs for the challenger and the defender are shown in the accompanying table on a year-by-year basis. The before-tax MARR is 15%.
Year
Challenger
Defender
Market Value
O&M Costs
Market Value
O&M Costs
0
$42,500
-
$25,000
-
1
31,000
$10,000
17,000
14,000
2
25,000
12,500
-
-
a. What is the total marginal cost of the challenger in EOY 1?
b. When should the machine be replaced?
c. What is the EUAC of the challenger in EOY 2?
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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