HW2_B graded

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Stevens Institute Of Technology *

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355

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English

Date

Feb 20, 2024

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pdf

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2

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Page 1 of 2 Name:_____________________________________ Lecture Section:___________ a) Calculate the PW for both the alternatives. (Do not use AW or FW) [3 point] b) Calculate the AW for both thealternatives. (Do not use PW or FW) [3 points] c) Calculate the FW for both the alternatives. (Do not use PW or AW) [3 points] d) Which alternative should Alfa Romeo choose? Why? [1 point] By: _________________________________________ E 355 Engineering Economics Spring 2019 assignment was completed on an individual basis.” Annual O&M Cost Description First Cost 2.1 Alfa Romeo is considering developing a new auto pilot system using AI. They have narrowed their choices down to two alternatives. Salvage value Annual Benefit Homework #2 Kate Abel, Ph.D., Associate Professor "I Pledge My Honor That I Have Abided by The Stevens Honor System and this Life MARR 10 15% System B $ 8,000,000 $ 300,000 $ 3,500,000 $ 1,100,000 10 15% System A $ 10,000,000 $ 400,000 $ 5,000,000 $ 1,000,000 PW A = -P + Annual(P / A, i, N) + Salvage(P / F, i, N), i = MARR, and M = Million = -10M - 1M(P/A, 0.15, 10) + 5M(P/A, 0.15, 10) + 0.4M(P/F, 0.15, 10) = -10M - 1M((1.15) 10 - 1) / (0.15 (1.15) 10 ) + 5M (5.02) + 0.4 (1.15) -10 = $ 10,174,000 PW B = -P + A(P/A,i,N) + S(P/F,i,N) = -8 + (3.5M - 1.1M) * (5.02) + 0.3M(0.247) = $ 4,122,000 Investment Future Revenue Revenue Costs Interest Compounded Annually Daniel Vainer B Alternative A should be chosen because it has both the highest Present Worth and Annual Worth, while alternative B only has a higher Future Worth. 3/3 3/3 2/3 =$16,661,600 3.5-1.1 1/1 13/14
Page 2 of 2 a) Calculate the EUAC for the System A. [1 points] b) Calculate the EUAC for the System B. [1 points] c) Calculate the EUAC for the System C. [1 points] d) Which plan should be adopted? Why? [1 point] System A B E 355 Engineering Economics Spring 2019 Homework #2 C 2.2 A manufacturer has been ordered by the City of Hoboken to stop discharging waste liquids into the city sewer system. You are the engineer responsible to make a decision to select one of the following systems Installed Cost Annual Salvage Value $ 48,000 $ 5,600 $ - Assuming the system is expected to last and be used for 10 years and money is worth 15%, which system should be purchased? $ 4,100 $ 1,300 $ 1,200 $ 2,900 $ 54,000 $ 76,000 System B should be adopted because it has the smallest equivalent uniform annual cost. 1/1 1/1 1/1 1/1
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