Engineering economics A certain manufacturing plant is being sold andwas submitted for bidding. Two bids were submittedby interested buyers. The first bid offered to payP200,000 each year for 5 years, each payment beingmade at the beginning of each year. The second bidderoffered to pay P120,000 the first year, P180,000 thesecond year, and P270,000 each year for the next 3years, all payments being made at the beginning ofeach year. If money is worth 12% compounded annually,which bid should the owner of the plant accept?

Present worth is the possibility that communicates a proportion of money today is worth more than…

Answered: bidding. Two bids wer rs. The first bid…

bidding. Two bids wer rs. The first bid off- for 5 years, each pa ng of each year. The se 0,000 the first year, 270 000 each year for

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Engineering economics

A certain manufacturing plant is being sold and
was submitted for bidding. Two bids were submitted
by interested buyers. The first bid offered to pay
P200,000 each year for 5 years, each payment being
made at the beginning of each year. The second bidder
offered to pay P120,000 the first year, P180,000 the
second year, and P270,000 each year for the next 3
years, all payments being made at the beginning of
each year. If money is worth 12% compounded annually,
which bid should the owner of the plant accept?

Application of economic techniques to the evaluation of design and engineering alternatives. The role of engineering economics is to assess the appropriateness of a given project, estimate its value, and justify it from an engineering standpoint.

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