
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
expand_more
expand_more
format_list_bulleted
Question
thumb_up100%

Transcribed Image Text:Bailey, Inc., is considering buying a new gang punch that would allow them to produce circuit boards more efficiently. The punch has a
first cost of $100,000 and a useful life of 15 years. At the end of its useful life, the punch has no salvage value. Labor costs would
increase $2,000 per year using the gang punch, but raw material costs would decrease $12,000 per year. MARR is 5 %/year.
Part a
Your answer is incorrect.
What is the discounted payback period for this investment?
7893
years
Carry all interim calculations to 5 decimal places and then round your final answer to the nearest year. The tolerance is ±1.
Expert Solution

This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution
Trending nowThis is a popular solution!
Step by stepSolved in 3 steps with 3 images

Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Similar questions
- A new highway is to be constructed. Design A calls for a concrete pavement costing $80 per foot with a 20-year life; four paved ditches costing $3 per foot each; and four box culverts every mile, each costing $10,000 and having a 20-year life. Annual maintenance will cost $1,600 per mile; the culverts must be cleaned every five years at a cost of $400 each per mile. Design B calls for a bituminous pavement costing $55 per foot with a 10-year life; four sodded ditches costing $1.40 per foot each; and four pipe culverts every mile, each costing $2,100 and having a 10-year life. The replacement culverts will cost $2,450 each. Annual maintenance will cost $2,600 per mile; the culverts must be cleaned yearly at a cost of $225 each per mile; and the annual ditch maintenance will cost $1.55 per foot per ditch. Compare the two designs on the basis of equivalent worth per mile for a 20-year period. Find the most economical design on the basis of AW and PW if the MARR is 12% per year. Click the…arrow_forwardParker County Community College (PCCC) is trying to determine whether to use no insulation or to use insulation that is either 1 inch thick or 2 inches thick on its steam pipes. The heat loss from the pipes without insulation is expected to cost $1.80 per year per foot of pipe. A 1 - inch thick insulated covering will eliminate 83% of the loss and will cost $0.55 per foot. A 2-inch thick insulated covering will eliminate 92% of the loss and will cost $0.85 per foot. PCCC Physical Plant Services estimates that there are 295,000 feet of steam pipe on campus. The PCCC Accounting Office requires a 10.5%/year return to justify capital expenditures. The insulation has a life expectancy of 10 years. Click here to access the TVM Factor Table Calculator Part a Your answer is incorrect. What is the present worth of each option? No insulation: $1-inch insulation: $ 2 - inch insulation: $ Parker County Community College (PCCC) is trying to determine whether to use no insulation or to use…arrow_forwardThere are three alternatives X,Y,Z. With 10% MARR, which alternative should be chosen based on following conditions and why? For X, initial cost is $10k, yearly revenue is $6K, Salvage is $1k and useful life is calculated as 2yrs. For Y, initial cost is $15k, yearly revenue is $10K, Salvage is -$2k and useful life is calculated as 3yrs. For Z, initial cost is $12k, yearly revenue is $5K, Salvage is $3k and useful life is calculated as 4yrs.arrow_forward
- Bailey, Inc., is considering buying a new gang punch that would allow them to produce circuit boards more efficiently. The punch has a first cost of $80,000 and a useful life of 15 years. At the end of its useful life, the punch has no salvage value. Annual labor costs would increase $6,000 using the gang punch, but annual raw material costs would decrease $12,000. MARR is 5.5% /year. What is the present worth of this investment?arrow_forwardAn aerodynamic three-wheeled automobile (the Dart) runs on compressed natural gas stored in two cylinders in the rear of the vehicle. The $12,000 Dart can cruise speeds up to 80 miles per hour, and it can travel 105 miles per gallon of fuel. Another two-seater automobile costs $8,000 and averages 50 miles per gallon of compressed natural useful life of seven years for both cars. If fuel costs $8.75 per gallon and MARR is 8% per year, over what range of annual miles driven is the Dart more economical? Assume a gas.arrow_forwardurgent i will 10 upvotesarrow_forward
- There are two alternatives P,M. With 15% MARR under 20 years study period, which alternative should be chosen based on the following conditions and why ? For P, initial cost is $14k, yearly cost is $14k, Salvage is $8k and useful life is calculated as 5 years. For M, initial cost is $65k, yearly revenue is $9k, Salvage is $13k and useful life is calculated as 20 years.arrow_forwardA cost-saving device has no salvage value after 5 years. Two options: Device A: Costs $10,000 & saves $3000 annually Device B: Costs $13,500 & saves $3000 the 1st year & increases $500 annually Which alternative should be selected using incremental ROR analysis, MARR=7%?arrow_forwardTexas Popcorn Corporation is planning to fully automate it process. The company CEO is currently looking into three options. Options A costs $450,000, AOC of $55,000, and salvage value of $85,000 after 3 years. Option B will cost $720,000 with an AOC of $68,000 and salvage of $95,000 after 4 years. Option C cost $800,000 with an AOC of $95,000 and salvage of $125,000 after 6 years. Which machine should the company select at an interest rate of 10% per year? Assume the project service life is 15 years. Please provide handwritten solutions.arrow_forward
- An equipment costing $57,500 is being considered for a production process at Dewey Chemicals. The expected benefits per year is $4,500 and estimated salvage value is $10,000. Determine the rate of return the company can get in this equipment proposal. Equipment life = 15 years.arrow_forwardFind the conventional payback period for the following project: First Cost $10,000 $500 in Year 1, increasing by $200/year $3,000/year $4,000 Maintenance Income Salvage Useful Life 10 years MARR 10%arrow_forwardNadine Chelesvig has patented her invention. She is offering a potential manufacturer two contracts for the exclusive right to manufacture and market her product. Plan A calls for an immediate single lump sum payment to her of $175,000. Plan B calls for an annual payment of $14,000 plus a royalty of $3.90 per unit sold. The remaining life of the patent is 10 years. Nadine uses a MARR of 10%/year. What must be the uniform annual sales volume of the product for Nadine to be indifferent between the contracts, based on an units annual worth analysis? Carry all interim calculations to 5 decimal places and then round your final answer to the nearest unit. The tolerance is ±10.arrow_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
Expert Answers to Latest Homework Questions
Q: 2. Suppose
G₁(s) = (s+2)
G₂(s) = (s-3)
C(s)
Find the transfer function G(s):
for each of the…
Q: can you evaluate and simplify the following summation:
Q: 6. Answer the following questions. Take help from ChatGPT to answer these questions
(if you need).…
Q: 5. Consider the following block diagram of a system in the Figure 4.
Y₁(s)
G₁
G2.
R(s)
C(s)
Y₂(s)
G3…
Q: 4. Simplify the block diagram in Figure 3 and find the closed-loop transfer function
G(s) =
C(s)…
Q: 1. Consider a system defined by the following state-space equations.
-5
2
N-MAN-G
=
3 -1
y = [12]…
Q: 3. Simplify the block diagram in Figure 2 and find the closed-loop transfer function
G(s) =
C(s)…
Q: Solve this problem and show all of the work
Q: Biopharmaceutics and Pharmacokinetics:Two-Compartment Model Instant Absorption Questions
Calculate…
Q: Q2: Draw the molecules based on the provided nomenclatures below:
(2R,3S)-2-chloro-3-methylpentane:…
Q: Solve this problem and show all of the work
Q: Solve this problem and show all of the work
Q: Solve this problem and show alll of the work
Q: Q3: Describes the relationship (identical, constitutional isomers, enantiomers or diastereomers)
of…
Q: Q1: For each molecule, assign each stereocenter as R or S. Circle the meso compounds. Label
each…
Q: Q5: Draw every stereoisomer for 1-bromo-2-chloro-1,2-difluorocyclopentane. Clearly show…
Q: Q4: Comparing (3S,4S)-3,4-dimethylhexane and (3R,4S)-3,4-dimethylhexane, which one is
optically…
Q: Given the standard enthalpies of formation for the following substances, determine the
reaction…
Q: Determine ASran for Zn(s) + 2HCl(aq) = ZnCl2(aq) + H2(aq) given the following
information:
Standard…
Q: I need help with this problem and an explanation of the solution for the image described below.…
Q: A marketing professor has surveyed the students at her university to better understand attitudes…