Contemporary Engineering Economics (6th Edition)
6th Edition
ISBN: 9780134105598
Author: Chan S. Park
Publisher: PEARSON
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Chapter 16, Problem 14P
To determine
Selection of the alternate.
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A company is considering pursuing a project with an initial cost of $200,000 annual operating and maintenance costs of $40,000, and annual sales revenues (income) of $80,000 . The project has a useful life of 9 years and will have no salvage value after 9 years .What is the conventional payback period for this project?
A large, standby electricity generator in a hospital operating room has a first cost of $70,000 and may be used for a maximum of 6 years. Its salvage value, which decreases by 15% per year, is described by the equation S = 70,000(1 − 0.15)n, where n is the number of years after purchase. The operating cost of the generator will be constant at $75,000 per year. At an interest rate of 12% per year, what is the economic service life and associated AW value?
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Chapter 16 Solutions
Contemporary Engineering Economics (6th Edition)
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