EBK CONTEMPORARY ENGINEERING ECONOMICS
6th Edition
ISBN: 8220101336736
Author: Park
Publisher: PEARSON
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Chapter 10, Problem 13P
(a):
To determine
Calculate the present wroth.
(b):
To determine
Calculate the
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A company is considering constructing a plant to manufacture a proposed new product. The land costs $300,000, the building costs $600,000, the equipment costs $250,000, and $100,000 additional working capital is required. It is expected that the product will result in sales of $750,000 per year for 10 years, at which time the land can be sold for $400,000, the building for $350,000, and the equipment for $50,000. All of theworking capital would be recovered at the EOY 10. Theannual expenses for labor, materials, and all other itemsare estimated to total $475,000. If the company requiresa MARR of 15% per year on projects of comparable risk,determine if it should invest in the new product line.Use the AW method.
A company is considering constructing a plant to manufacture a proposed new product. The land costs P300,000, the building costs P600,000, the equipment costs P250,000 and P100,000 additional working capital is required. It is expected that the product will result in sales of P750,000 per year for 10 years, at which time the land can be sold for P400,000, the building for P350,000 and the equipment for P50,000. All of the working capital would be recovered at the end of year 10. The annual expenses for labor, materials, and all other items are estimated to total P475,000. If the company requires a minimum rate of return of 15% per year on projects of comparable risk, determine if it should invest in the new product line. SOLVE FOR ROR MANUALLY.
A company is considering constructing a plant to manufacture a proposed new product. The land costs P300,000, the building costs P600,000, the equipment costs P250,000 and P100,000 additional working capital is required. It is expected that the product will result in sales of P750,000 per year for 10 years, at which time the land can be sold for P400,000, the building for P350,000 and the equipment for P50,000. All of the working capital would be recovered at the end of year 10. The annual expenses for labor, materials, and all other items are estimated to total P475,000. If the company requires a minimum rate of return of 15% per year on projects of comparable risk, determine if it should invest in the new product line.
Evaluate using the following methods:
a) RORb) Annual Worth Methodc) Present Worth Methodd) Future Worth Method
Chapter 10 Solutions
EBK CONTEMPORARY ENGINEERING ECONOMICS
Ch. 10 - Prob. 1PCh. 10 - Prob. 2PCh. 10 - Prob. 3PCh. 10 - Prob. 4PCh. 10 - Prob. 5PCh. 10 - Prob. 6PCh. 10 - Prob. 7PCh. 10 - Prob. 8PCh. 10 - Prob. 9PCh. 10 - Prob. 10P
Ch. 10 - Prob. 11PCh. 10 - Prob. 12PCh. 10 - Prob. 13PCh. 10 - Prob. 14PCh. 10 - Prob. 15PCh. 10 - Prob. 16PCh. 10 - Prob. 17PCh. 10 - Prob. 18PCh. 10 - Prob. 19PCh. 10 - Prob. 20PCh. 10 - Prob. 21PCh. 10 - Prob. 22PCh. 10 - Prob. 23PCh. 10 - Prob. 24PCh. 10 - Prob. 25PCh. 10 - Prob. 26PCh. 10 - Prob. 27PCh. 10 - Prob. 28PCh. 10 - Prob. 29PCh. 10 - Prob. 30PCh. 10 - Prob. 31PCh. 10 - Prob. 32PCh. 10 - Prob. 33PCh. 10 - Prob. 34PCh. 10 - Prob. 35PCh. 10 - Prob. 36PCh. 10 - Prob. 37PCh. 10 - Prob. 1STCh. 10 - Prob. 2STCh. 10 - Prob. 3STCh. 10 - Prob. 4STCh. 10 - Prob. 5ST
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