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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Question
Chapter 9, Problem 4P
To determine
Calculate the Annual worth.
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You, an engineer, and an attorney friend, Rob, started a small business 3 years ago to do energy audits for small businesses. A piece of equipment that costs $25,000 then has become prematurely obsolete and needs to be replaced with a solid state version that has a purchase price of $20,000 and the current equipment has a nil salvage value. Your company accountant shows the book value of the equipment to be $10,000. (a) If you buy the solid state equipment, how should the difference between the cost of the new equipment and the value of the old equipment be considered? (b) Your partner thinks of this difference as an added cost to the new equipment, effectively making its purchase price $30,000. Is she correct?
ACME Anvil Corporation has done extensive
analysis of their current process and found the
following costs associated with the quality of
their products and their revenue for the
period:
Quality Cost
Scrap Products During Production
Reprocessing During Production
Warranty Claims
Customer Returns
Additional Shipping Charges
Quality Training for Employees
Quality Control Salaries
Total Revenue
O $155,000
O $135,000
Amount
155,000
135,000
650,000
800,000
Based on these figures, what is the amount of
the Internal Failure Costs?
$290,000
O $365,000
75,000
10,000
50,000
12,500,000
A machine that cost $120,000 3 years ago can be sold now for $51,500. Its market value is expected to be $40,000 and $20,000 1
year and 2 years from now, respectively. Its operating cost was $18,000 for the first 3 years of its life, but the M&O cost is expected to
be $23,000 for the next 2 years. A new improved machine that can be purchased for $135,500 will have an economic life of 5 years,
and an operating cost of $9,000 per year, and a salvage value of $32,000 whenever it is replaced. At an interest rate of 10% per year,
determine if the presently owned machine should be replaced now, 1 year from now, or 2 years from now.
The annual worth of the existing machine one year from now is $- 50500 O. the annual worth of the existing machine two years
from now is $- 30,500 . and the annual worth of the new machine is $-112,500
The presently owned machine should be replaced now
13
Chapter 9 Solutions
Engineering Economy, Student Value Edition (17th Edition)
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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