Engineering Economy
16th Edition
ISBN: 9780133582819
Author: Sullivan
Publisher: DGTL BNCOM
expand_more
expand_more
format_list_bulleted
Question
Chapter 10, Problem 25P
To determine
Calculated the new incremental cost benefit ratio
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
5-S2 A new recycling sorting and processing line is proposed to serve a medium size city. The
installed cost of the new line is $2,400,000. The residual value after ten years is estimated at
$480,000. The unit would produce recycled material ready for resale at a rate of $0.15/pound,
and would run for ten years. How much recyclable material must be generated every year to
justify the project (i.e., for the present value of the project to be positive). Use an interest rate
of 9%.
A retrofitted space-heating system is being
considered for a small office building. The
system can be purchased and installed for
$114,000, and it will save an estimated
340,000 kilowatt-hours (kWh) of electric
power each year over afive-year period. A
kilowatt-hour of electricity costs $0.08. The
market value, additional annual operating and
maintenance expenses are negligible. What is
the benefit-cost ratio of the project if the
general inflation rate is 3% per year? The
market interest rate = (im) is 22% per year,
and the annual savings are expressed in year-
zero dollars. Use the benefit-cost method to
make a recommendation.
The benefit-cost ratio of the system with PW
is___---_?
Question 10:
Two alternatives are being considered as shown below. Based on an MARR of 7%, and an 8-
year analysis period, select the best alternative. Assume identical replacement.
A
в
Initial Cost
(9,200)
(5,000)
Uniform
Annual
Benefit
Useful Life
Analysis
Period
1,850
1,750
8
4
8
Chapter 10 Solutions
Engineering Economy
Ch. 10 - The Adams Construction Company is bidding on a...Ch. 10 - Prob. 2PCh. 10 - Prob. 3PCh. 10 - A retrofitted space-heating system is being...Ch. 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 - Four mutually exclusive projects are being...Ch. 10 - Two municipal cell tower designs are being...Ch. 10 - Prob. 19PCh. 10 - Prob. 20PCh. 10 - Prob. 21PCh. 10 - Prob. 22PCh. 10 - You have been requested to recommend one of the...Ch. 10 - Prob. 24PCh. 10 - Prob. 25PCh. 10 - Prob. 26FECh. 10 - Prob. 27FECh. 10 - Prob. 28FECh. 10 - A flood control project with a life of 16 years...Ch. 10 - Prob. 30FECh. 10 - Prob. 31FE
Knowledge Booster
Similar questions
- A construction company has to sell at least 30 and 50 from type of equipment E1 and E2. respectively. The company has 270 hours monthly workmanship totally. E1 requires 1 hours workmanship and E2 does 3 hours. The benefits from E1 and E2 are 200 and 300 TL respectively. Find the economic numbers for E1 and E2 for the maximum benefit.arrow_forwardCar A initially costs 500 more than car B. but it consumes 0.04 gallon/mile versus 0.05 gallon/mile for B. Both vehicles last 8 years, and B's Salvage value S 100 smaller than A's. Fuel costs S 1.7 per gallon. Other things being equal. beyond how many miles of use per year does car A become preferable to car Barrow_forwardThe company you work for wants to start a new project. The initial cost of the project is $120,000. It is expected that revenues will be $18,000 annually. There will be annual operating expenses of $17,000. At the end of the 9-year life of the project, there is a salvage value of $25,000. Use a MARR of 5%. Perform a PW (present worth) analysis. What is the PW of the project? Question 2 Part C: Provide the PW value of the project. Enter your answer in the form: 12345arrow_forward
- Car A costs $800 more than Car B, but it consumes 0.035 gallons/mile versus 0.06 gallons/mile for Car B. Both vehicles last 10 years and B's salvage value is $175 smaller than A's. Fuel costs $2.30/gallon. Other things being equal, beyond how many miles of use per year (x) does A become preferable to B?arrow_forwardUSAA is considering adding a new runway and has 3 options for the runway surface: asphalt, concrete, and a mixture of both. The benefit from all 3 alternatives is the same. Therefore, these projects are cost-based alternatives, and the cash flows are provided in the table below. Using conventional benefit/cost ratio with MARR of 9%, which alternative should be selected? First cost AW of resurfacing cost Asphalt Concrete Mixture $250,000,000 $350,000,000 $400,000,000 $30,000,000 $20,000,000 $10,000,000 Disbenefits at construction time $5,000,000 Life, years Asphalt is better Concrete is better The Mixture is better 20 $10,000,000 20 $12,000,000 20arrow_forwardProblem 11.017 Economic Service Life A piece of equipment has a first cost of $180,000, a maximum useful life of 7 years, and a market (salvage) value described by the relation S = 120,000 - 11,000k, where k is the number of years since it was purchased. The salvage value cannot go below zero. The AOC series is estimated using AOC = 60,000+8,000k. The interest rate is 11% per year. Determine the economic service life and the respective AW. The economic service life is year(s) and the AW value is $arrow_forward
- List the potential costs, benefits, and disbenefits that should be considered in evaluating a potential nuclear power plant. What stakeholder viewpoints will need to be considered?arrow_forwardCompare the defender and challenger based on the opportunity-cost?arrow_forwardThere are two alternative machines for a manufacturing process. Both machines have the same output rate, but they differ in costs. Machine A costs $20,000 to set up and $8,000 per year to operate. It must be completely replaced every 3 years, and it has no salvage value. Machine B costs $50,000 to set up and $2,160 per year to operate. It should last for 5 years and has no salvage value. The costs of two machines are shown below. 0 1 2 3 4 5 Machine A 20,000 8,000 8,000 8,000 Machine B 50,000 2,160 2,160 2,160 2,160 2,160 Assuming the cost of capital is 10%,1. find the equivalent annual cost of Machine A in Box 1. Round it to a whole dollar, and no comma or the dollar sign.2. find the EAC of Machine B in Box 2. The same format as box 1.3. Based on the equivalent annual cost method, type in Box 3 which machine do you recommend, Machine A or Machine B. Question 20 options: Blank # 1 Blank # 2 Blank #…arrow_forward
- Calculate the conventional benefit-cost ratio for the alternative: Initial Investment 250000 Revenues 80000 Costs 22000 Salvage Value 50000 Useful life 9 MARR 0.1.arrow_forwardHow can we determine whether the project is acceptable or not?arrow_forwardYou are weighing the economics of installing a triple-glazed energy efficient window system in your building. The following life cycle costs and savings are provided. The study period is 25 years, and the discount rate is 10%. Is this an economically viable approach based on the Savings-to-Investment Ratio (SIR)? Triple- Glazed Energy Efficient Windows: Window Quantity takeoff: 10000 sf Initial Cost: $100/sf Annual Operating Costs: $2.5/sf Annual Energy Saving: $10/sfarrow_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:PEARSON
Engineering 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 Learning
Managerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage Learning
Managerial 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