Engineering Economy
16th Edition
ISBN: 9780133582819
Author: Sullivan
Publisher: DGTL BNCOM
expand_more
expand_more
format_list_bulleted
Question
Chapter 9, Problem 4P
(a):
To determine
Calculate the economic life of the project.
(b):
To determine
Calculate the new economic life
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
The fuel inputs per hr of plant-1 and plant-2 are given as
F1 = 0.4P12 + 80 P1 +240 OMR/hr
%3D
F2 = 0.5P12 + 60 P2 +300 OMR/hr
%3D
Determine the economic operating schedule
corresponding cost generation if the total load is
360MW.Neglect the line losses and generator limits.
P1 = 188.89
%3D
P2 = 171.11
Total Cost = 54,829.12 OMR / hr
%3D
P1 = 189.89
%3D
P2 = 170.11
Total Cost = 52,629.12 OMR / hr
%3D
None
P1 = 185.89
%3D
P2 = 174.11
Total Cost = 58,429.12 OMR / hr
A hand tool costs $300 and requires $1.25 labor cost per unit. A machine tool costs $3,000 and reduces labor to $0.75. What is the break-even point (in years) at 5% for an annual production of 5,000 units?
solve it using manual computation; do not use Microsoft Excel
The Ajax Corporation has an overhead crane that has an estimated remaining life of 10 years. The crane can be sold now for $8,000. If the crane is kept in service, it must be overhauled immediately at a cost of $5,000. Operating and maintenance costs will be $3,000 per year after the crane is overhauled. The overhauled crane will have zero MV at the end of the 8-year study period. A new crane will cost $20,000, will last for 8 years, and will have a $4,000 MV at that time. Operating and maintenance costs are $1,000 per year for the new crane. The company uses a before-tax interest rate of 10% per year in evaluating investment alternatives. Should the company replace the old crane?
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
Knowledge Booster
Similar questions
- Answer is 5.6 Please show solutionarrow_forwardA client has an existing CAD/CAM system that costs $95,000 per year to lease (payable at the end of each year of use) and a new contract the client is considering entering will fix the price for over the next four years. The client is also considering purchasing a CAD/CAM system to replace its currently leased system (rather than renewing / entering a new lease contract). The new system will cost $450,000 to purchase and install. The system has an estimated life of five years, when it is expected to become obsolete, but it will have a salvage value of $25,000. The interest rate is projected to be 6% per year during the life of the project. a. Draw a cash flow diagram for the next four years for the existing system (leased system) and a separate cash flow diagram for the system that is being considered for purchase. b. For each option (leasing and buying), calculate the value of all cash receipts and disbursements at the end of the third year. c. Compare the value of each option at…arrow_forwardA subsidiary of a major furniture company manufactures wooden pallets. The plant has the capacity to produce 300,000 pallets per year. Presently the plant is operating at 70% of capacity. The selling price of the pallets is $18.25 per pallet and the variable cost per pallet is $15.75. At zero output, the subsidiary plant’s annual fixed costs are $550,000. This amount remains constant for any production rate between zero and plant capacity. Solve, a. With the present 70% of capacity production, what is the expected annualprofit or loss for the subsidiary plant. b. What annual volume of sales (units) is required in order for the plant to break even? c. What would be the annual profit or loss if the plant were operating at 90% of capacity? d. If fixed costs could be reduced by 40%, what would be the new breakeven sales volume?arrow_forward
- A firm has the capacity to produce 1,000,000 units of product per year. At present, it is able to produce and sell 600,000 units yearly at a total income of P720,000. Annual fixed costs are P250,000 and the variable costs per unit is P0.70. Determine the number of units that should be sold annually to break-even.arrow_forwardABC Corporation manufactures a certain product that sells for P5,000 each. The company’s maximum production capacity is 360 units per year. At present it is able to produce and sell 280 units a year. The cost to manufacture each product is P2,400 and the fixed operating cost per year is P520,000.1. What is the break – even sales volume of the product per year?2. What is the profit per year based on the present production – sales status?3. What is the loss if only 150 units were produced and sold in a year?arrow_forwardPadre works for a trade magazine that publishes lists of power-sizing exponents (PSE) that reflect economies of scale for developing engineering estimates of various types of equipment. Padre has been unable to find any published data on the VMIC machine and wants to list its PSE value in his next issue. Given the following data calculate the PSE value that Padre should publish. (Note: The VMIC-100 can handle twice the volume of a VMIC-50.) Cost of VMIC-100 today $250,000 Cost of VMIC-50 5 years ago $95,000 VMIC equipment index today = 350 VMIC equipment index 5 years ago = 235arrow_forward
- Given an EOQ problem modelled below, compute for L (lead time in days). Only final answer is rounded (two decimal places) which means that any intermediate value must not be rounded off. For guidance, D is the annual demand and ROP is the reorder point. D = 6,000 units/year EOQ Model Q* ROP = 1/4 of average inventory t L 250 working days (1 year)arrow_forwardA company makes a product with a selling price of $20 per unit and variable costs of $ 8 per unit. The fixed costs for the period are $30762. What is the required output level to make a target profit of $15,000?arrow_forwardYou are requested to pick an implementation technology for your embedded product to maximize the profit. You have a competitor that will release a similar product 25 weeks from today. If the maximum expected product lifetime in the market is 50 weeks and the projected maximum number of sold units/week by the market leader is 1M units. Assume that the price is constant throughout the product lifetime ($50 USD). 'The available implementation technologies are: T1 T2 T3 NRE cost Unit cost (material and manufacturing) 100 USD Time to market 100K USD 1M USD 10M USD 5 USD 40 weeks 25 USD | 20 weeks 30 weeks a) What is the maximum revenue that might be generated for this product? b) Assuming no competition and ignoring the given max number of sold units/week, what is the max number of units sold per week to achieve the same profit from T1 and T3? Assume no competition. c) With the competition, what is the maximum profit that might be achieved if you go with T1? d) With the competition, what is…arrow_forward
- Miguel is trying to decide whether or not to replace the windows on his house. Miguel estimates that installing new windows would cost $11,000 and would save him $2,000 per year in energy costs. Assume a MARR of 10% and a useful life of 10 years. Compute the AW of this decision. Carry all interim calculations to 5 decimal places and then round your final answer to a whole number. The tolerance is ±10.arrow_forwardProblem 1 Knott's Industries manufactures three models of backyard swings: Standard, Deluxe, and Premium. Currently it has five identical swing-set-making machines. Which are operated 8 hours each day, 5 days a week, 50 weeks per year. A capacity cushion of 18% is desired. The following information is also known: Lot Size Model Time (units/lot) Annual Demand Forecast Processing (min/unit) Setup (min/lot) Pessimistic Expected Pessimistic 18,000 Standard 8. 30 50 15,000 28,000 Deluxe 10 40 40 12,000 15,000 23,000 Premium 14 50 30 6,000 12,000 14,000 a. Does Knott's have sufficient capacity to meet the minimum (pessimistic) demand, the expected demand, and the maximum (optimistic) demand? If not, how many more machines are needed in each case? b. If Knott's was able to reduce the setup time for all three models by 50% and triple the lot size for each model by implementing process improvements, would there be enough current capacity to produce 15,000 units of each type of swing? Show your…arrow_forwardYou are about to buy a piece of equipment (machine Alpha) for a project. The initial cost is $500,000 and the annual maintenance costs is $15,000. Another company offers you a second option (Machine Beta) for which the annual maintenance cost is $20,000. What is the maximum price (the initial cost) you would be willing to pay for the second option? Both machines have the same useful life of 11 years and the difference between their performances is negligible. Assume an annual interest rate of 4%. $767,524 $667,197 $456,197 $567,524arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Principles of Economics (12th Edition)EconomicsISBN:9780134078779Author:Karl E. Case, Ray C. Fair, Sharon E. OsterPublisher:PEARSONEngineering Economy (17th Edition)EconomicsISBN:9780134870069Author:William G. Sullivan, Elin M. Wicks, C. Patrick KoellingPublisher:PEARSON
- Principles of Economics (MindTap Course List)EconomicsISBN:9781305585126Author:N. Gregory MankiwPublisher:Cengage LearningManagerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage LearningManagerial Economics & Business Strategy (Mcgraw-...EconomicsISBN:9781259290619Author:Michael Baye, Jeff PrincePublisher:McGraw-Hill Education
Principles of Economics (12th Edition)
Economics
ISBN:9780134078779
Author:Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:9780134870069
Author:William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-...
Economics
ISBN:9781259290619
Author:Michael Baye, Jeff Prince
Publisher:McGraw-Hill Education