Determine the ERR of the engineering project shown below when the MARR is 18% per year and the reinvestment rate is 15% per year. Express your answer in percent rounded to the nearest hundredths. Investment cost $10,290 Expected life 7 years Market (salvage) value $894 Annual receipts $9,16| Annual expenses $5,191

Determine the ERR of the engineering project shown below when the MARR is 18% per year and the reinvestment rate is 15% per year. Express your answer in percent rounded to the nearest hundredths. Investment cost $10,290 Expected life 7 years Market (salvage) value $894 Annual receipts $9,16| Annual expenses $5,191

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

Calisto Launch Services is an independent space corporation and has been contracted to develop and launch one oftwo different satellites. Initial equipment will cost $750,000 for the first satellite and $850,000 for the second.Development will take 5 years at an expected cost of $150,000 per year for the first satellite; $120,000 per year forthe second. The same launch vehicle can be used for either satellite and will cost $275,000 at the time of the launch5 years from now. At the conclusion of the launch, the contracting company will pay Calisto $2,500,000 for eithersatellite.Calisto is also considering whether they should consider launching both satellites. Because Calisto would haveto upgrade its facilities to handle two concurrent projects, the initial costs would rise by $150,000 in addition to thefirst costs of each satellite. Calisto would need to hire additional engineers and workers, raising the yearly costs to atotal of $400,000. An additional compartment would be added to…
The annual income from an apartment complex is $23,155. The annual expense is estimated to be $2,588. The apartment complex could be sold for $110,110 at the end of 10 years. If your MARR is 10%, how much should you pay for the apartment complex if you were to buy it now?
Kaneb is evaluating two alternative pipeline welders. Welder A costs $310,000, has a 7-year life, and is expected to generate net cash inflows of $78,000 in each of the 7 years. Welder B costs $320,000, has a 5-year life, and is expected to generate annual net cash inflows of $68,900 in each of the 5 years. Kaneb's cost of capital is 16%. Using the equivalent annual annuity method, which alternative should be chosen and what is its NPV?
A firm is considering purchasing equipment that will reduce costs by $40,000. The equipment costs $300,000 and has a salvage value of $50,000 and a life of 7 years. The annual maintenance cost is $6,000. While not in use by the firm, the equipment can be rented to others to generate an income of $10,000 per year. If money can be invested for an 8% return, is the firm justified in buying the equipment? Solve using: Present Worth Method Rate-of-Return Method
How do the economic engineers use the method of Applying Annual-Worth Analysis to solve their problems?
A Company wants to prioritize the efficiency and effectiveness of its company. On the advice of the Technical Manager, Naufal Fahmi, to save energy by installing a device that costs Rp. 200 million. The tool is estimated to provide savings of Rp. 10 million/year in the first 2 years, then increased to Rp. 12 million/year for the next 5 years, and Rp. 15 million in the following years. If the age of the tool is 10 years. If MARR=6% a. Create cashflow from this case b. Should this decision be made?
Can Please Help Me: Engineering Economics/Civil Engineering 60 minutes only the given time. Wish you could help me. I will give UPVOTE and GOOD FEEDBACK. ////Question Davis tractor is purchased with operating cost of 400 per year. If the expected life is 25 years and money is worth 10%, what deduction from the purchased price would compensate the buyer for the additional operating cost? Make a cash flow diagram. ////Question
Need AsapIllustrate the cashflow diagram and compute for the payback period for a project with the following characteristics, if the minimum attractive rate of return (MARR) is 10%? First Cost $20,000 Annual Benefits $8,000 Annual Maintenance $2,000 in year, then increasing by $500 per year Salvage Value $2,000 Useful Life10 years
Please no written by hand solution Two projects are shown below. Interest rate is 10% per year with yearly compounding. Project A Project B Project Life 10 years 10 years Benefits $500 at year = 0 and $100 per year (at year = 1,2,3,…,10) $15 per year starting year 2 (at year = 2,3,4,…,10) Disbenefits $40 per year (at year = 1,2,3,…,10) $1 per year starting year 2 (at year = 2,3,…,10) Costs $600 at year = 0, $100 at year = 1 $50 at year = 0 (1) Find the conventional B/C ratio for Project A. (2) Find the conventional B/C ratio for Project B. (3) Based on B/C analysis (using conventional B/C ratio), which between A and B is more attractive?
Information about a machine to be purchased is given below. • The purchase cost is ₺755,000 • Salvage value is ₺125,500 • Annual operating cost is ₺58,000 • Periodic repair-maintenance cost is ₺37,000 for every 3 years • In the 4th year,there is a replacement of parts and repair cost of ₺275,000 • The economic life of the machine is 12 years. The minimum attractive rate of return (MARR) is 15% per year. Calculate the annual value of the machine. !!Net cash flow diagrams must be drawn!!
Upload the picture of your complete solutions including the correct cash flow diagram (for plus points) and your conclusion. You are faced with a decision on an investment proposal. Specifically, the estimated additional income from the investment is $125,000 per year; the investment cost is $400,000; and the first year estimated expense of $20,000 and will increase a rate of 5% per year. Assume an 8-year analysis period, no salvage value, and MARR = 15% per year. a. Calculate the PW and FW of this proposal? b. What is the ERR ( Ԑ=MARR) of this proposal? c. What is the Simple and Discounted payback?
If a company purchases an equipment for $P and uses it for N years, and the compaany's MARR is i%, what is the EUAC of the Capital Recovery? Group of answer choices $A(F/A, i%, N) $P(F/P, i%, N) %A(P/A, i%, N) $P(A/P, i%, N)