A mechanical engineer is considering two materials for use in an electrical vehicle. All estimates are made. Material X Material Y First cost, RM Maintenance Cost, RM per year Salvage value, RM Life, years 15,000 35,000 7,000 9,000 2,000 20,000 5 5 a) Suggest which alternative should be selected with 10% interest rate. b) Find out at what first cost the method not selected above will become the more economics preference.

A mechanical engineer is considering two materials for use in an electrical vehicle. All estimates are made. Material X Material Y First cost, RM Maintenance Cost, RM per year Salvage value, RM Life, years 15,000 35,000 7,000 9,000 2,000 20,000 5 5 a) Suggest which alternative should be selected with 10% interest rate. b) Find out at what first cost the method not selected above will become the more economics preference.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

The product development group of a high-tech electronics company developed five proposals for new products. The company wants to expand its product offerings, so it will undertake all projects that are economically attractive at the company’s MARR of 20% per year. The cash flows (in $1000 units) associated with each project are estimated. Which projects, if any, should the company accept on the basis of a present worth analysis? Project A B C D E Initial investment, $ −400 −510 −660 −820 −900 Operating cost, $/year −100 −140 −280 −315 −450 Revenue, $/year 360 235 400 605 790 Salvage value, $ — 22 — 80 95 Life, years 3 10 5 8 4
Dexcon Technologies, Inc. is evaluating two alternatives to produce its new plastic filament with tribological (i.e., low friction) properties for creating custom bearings for 3-D printers. The estimates associated with each alternative are shown below. Using a MARR of 20% per year, which alternative has the lower present worth? Method DDM LS First cost, $ −164,000 −370,000 M&O cost, $/year −55,000 −21,000 Salvage value, $ 0 30,000 Life, years 2 4
Select the best alternative through internal rate of return analysis. Assume that the minimum attractive rate of return is 10% per year. Machine X |Machine YInitial cost $ 400,000.00 $ 500,000.00Annual operating cost $ 15,000.00 |$ 25,000.00 Annual profit $ 20,000.00 |$ 40,000.00Residual value $ 85,000.00 |$ 100,000.00Project life 15 years | none Engineering Economic Analysis
4) Based on estimates the data for 2 types of bridges with different lives are as follows. If the minimum attractive rate of return is 10%, determine which project is more desirable using Annual Cost Method and ROR. Timber Bridge Steel Bridge First Cost P500k P850k Salvage Value 20k 100k Life in yrs 15 20 Annual maintenance 75k 50k
An oil company is planning to install a new 80 mm pipeline to connect storagetanks to a processing plant 1500 m away. The connection will be needed for theforeseeable future. Refer to their costs incurred below:initial cost: RM15,000service life: 12 yearssalvage value: RM200one-off saving in year 8: RM 300annual profit: RM400annual pump operation hours: 450 hourspump cost per hours: RM2.50Calculate the single project evaluation using Benefit Cost Ratio PW analysismethod, which is preferred if the MARR is 7%. Draw the cashflow diagram.
7 You received a memo that you are appointed as the team leader for a new commercial building project. Based on the estimation, if your team will be using a steel, it will cost 80,000 per month and 145000 cost if glass For the plan A, it has an annualmaintenance cost is 25000, 1000 repair cost every 2 years and a salvage value of 3000 after 15 years For the plan B, the repair cost is 3500 every 3 years, annual maintenance cost of 30000 and a salvage value of 1000 after 20 years. Compute for the capitalized cost if the money is worth 8% compounded annually and choose the best material for the project.CC PlanA = (2 decimal placesCC Plan B = (2 decimal places)
As an engineer, you are responsible to find the best alternative that is economically best. The cash flows shown in the table and the MARR is 11 % per year. Then please answer the following questions. Cash Flow Project 01 Project 02 Project 03 First Cost, $ -90000 220000 230000 Annual Cost, $ Per Year -60000 -21000 -17000 Overhaul Every 10 Years, $ _ _ -60000 Salvage Value, $ 8000 29000 11000 Life, Years 3 10 a) Find the Aw for Project 01. b) calculate the AW for Project 02 c) Calculate Aw for Project 03. What is your decision?
Consider your self as a businessman, you owned 5 storey building with a total of 35-unit apartment near at the downtown area of Davao City. You felt that because the location of the apartment will be occupied 95% at all time. You desires a rate of return 30%. Other pertinent data are the following: Land investment - 8,000,000.00 Building investment - 20,000,000.00 Study period - 30 yrs Cost of the land after 30 yrs - 25,000,000.00 Cost of the building after 30 yrs - 5,000,000.00 Rent per unit per month - 7,500.00 Upkeep per unit per year - 1,500.00 Property Taxes - 1% Insurance - 0.5% Is this a good investment? And what is the Payback period of investment? Note: use all the method.
A new alloy can be produced by Process A, which costs $200,000 to implement. The operating cost will be $10,000 per quarter with a salvage value of $25,000 after its 2-year life. Process B will have a first cost of $250,000, an operating cost of $15,000 per quarter, and a $40,000 salvage value after its 4-year life. The interest rate is 8% per year compounded quarterly. Using present value analysis which process should be selected.
If produced by Method A, a product’s initial capital cost will be $100,000, its annual operating cost will be $20,000, and its salvage value after 3 years will be $20,000. With Method B there is a first cost of $150,000, an annual operating cost of $10,000, and a $50,000 salvage value after its 3-year life. Based on a present worth analysis at a 15% interest rate, which method should be used?
Compare the following investment alternatives using ROR analysis. MARR is %12 per annum. Alternative-A Alternative-B First cost, $ 240,000 450,000 Uniform annual benefit, $ 52,000 84,000 Salvage value, $ 120,000 230,000 Life, year 20 Infinite
A salesman offers a businessman two options for certain machine. Using the Present Value (PV) Method in determining the more economical, what is the Present Value of Option A? Assume interest is 24% cpd. a. Option A: First Cost – P203,692; Annual operating cost – P93,768; Salvage Value – P15,969; and Useful life – 4 years Option B: First Cost – P65,000; Annual operating cost – P20,000; Salvage Value – P2,500; and Useful life – 6 years