Basics Of Engineering Economy
2nd Edition
ISBN: 9780073376356
Author: Leland Blank, Anthony Tarquin
Publisher: MCGRAW-HILL HIGHER EDUCATION
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter 2, Problem 69P
The effort required to maintain a scanning electron microscope is known to increase by a fixed percentage each year. A high-tech equipment maintenance company has offered its services for a fee that includes automatic increases of 8% per year after year 1. A biotech company that wanted to use the service offered $65,000 as pre-payment for a 3-year contract to take advantage of a temporary tax loophole. If the biotech company used an interest rate of 10% per year in determining how much it should offer, what was the service fee amount that it assumed for year 1?
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
An entrepreneurial electrical engineer approached a large water utility with a proposal that promises to reduce the utility’s power bill by at least 15% through installation of patented surge protectors. The proposal states that the engineer will not be paid for the first year, but beginning in year 2, she will receive three equal, annual payments that are equivalent to 60% of the power bill savings achieved in year 1 due to the protectors. Assuming that the utility’s power bill of $1 million per year is reduced by 15% after installation of the surge protectors, what is (a) the present worth in year 0 of the uniform payments to the engineer, and (b) their future worth in year 4? Use an interest rate of 10% per year.
The effort required to maintain a scanning electron microscope is known to increase by a fixed percentage each year. A high-tech equipment maintenance company has offered its services for a fee that includes automatic increases of 8% per year after year 1. A biotech company that wanted to use the service offered $65,000 as pre-payment for a 3-year contract to take advantage of a temporary tax loophole. If the biotech company used an interest rate of 10% per year in determining how much it should offer, what was the service fee amount that it assumed for year 1?
The future worth in year 10 of income associated with a fixed-income investment is guaranteed to be $500,000. If the cash flow in year 1 is $20,000, how much would the arithmetic gradient have to be at the interest rate of 10% per year?
Chapter 2 Solutions
Basics Of Engineering Economy
Ch. 2 - Prob. 1PCh. 2 - Prob. 2PCh. 2 - Prob. 3PCh. 2 - Prob. 4PCh. 2 - Prob. 5PCh. 2 - Prob. 6PCh. 2 - Prob. 7PCh. 2 - Prob. 8PCh. 2 - Prob. 9PCh. 2 - Prob. 10P
Ch. 2 - Prob. 11PCh. 2 - Prob. 12PCh. 2 - Prob. 13PCh. 2 - Prob. 14PCh. 2 - Prob. 15PCh. 2 - Prob. 16PCh. 2 - Prob. 17PCh. 2 - Prob. 18PCh. 2 - Prob. 19PCh. 2 - Prob. 20PCh. 2 - Prob. 21PCh. 2 - Prob. 22PCh. 2 - Arctic and Antarctic regions are harsh...Ch. 2 - Prob. 24PCh. 2 - Prob. 25PCh. 2 - Prob. 26PCh. 2 - Prob. 27PCh. 2 - Prob. 28PCh. 2 - Prob. 29PCh. 2 - Prob. 30PCh. 2 - Prob. 31PCh. 2 - Prob. 32PCh. 2 - Prob. 33PCh. 2 - Prob. 34PCh. 2 - Prob. 35PCh. 2 - Prob. 36PCh. 2 - Prob. 37PCh. 2 - Prob. 38PCh. 2 - Prob. 39PCh. 2 - Prob. 40PCh. 2 - Prob. 41PCh. 2 - Prob. 42PCh. 2 - Prob. 43PCh. 2 - Prob. 44PCh. 2 - Prob. 45PCh. 2 - Prob. 46PCh. 2 - Prob. 47PCh. 2 - Prob. 48PCh. 2 - Prob. 49PCh. 2 - Prob. 50PCh. 2 - Prob. 51PCh. 2 - Prob. 52PCh. 2 - Prob. 53PCh. 2 - Allen Bradley claims that its XM1Z1A and XM442...Ch. 2 - Prob. 55PCh. 2 - Prob. 56PCh. 2 - Prob. 57PCh. 2 - Prob. 58PCh. 2 - Prob. 59PCh. 2 - Prob. 60PCh. 2 - Prob. 61PCh. 2 - Prob. 62PCh. 2 - Prob. 63PCh. 2 - Prob. 64PCh. 2 - Prob. 65PCh. 2 - Prob. 66PCh. 2 - Prob. 67PCh. 2 - Prob. 68PCh. 2 - The effort required to maintain a scanning...Ch. 2 - Prob. 70PCh. 2 - Prob. 71PCh. 2 - The present worth in year 10 of a decreasing...Ch. 2 - Prob. 73PCh. 2 - Prob. 74PCh. 2 - Prob. 75PCh. 2 - Prob. 76PCh. 2 - Prob. 77PCh. 2 - Prob. 78PCh. 2 - Prob. 79PCh. 2 - Prob. 80PCh. 2 - Prob. 81PCh. 2 - Prob. 82PCh. 2 - Prob. 83PCh. 2 - Prob. 84PCh. 2 - Prob. 85PCh. 2 - Prob. 86PCh. 2 - Prob. 87PCh. 2 - Prob. 88PCh. 2 - Prob. 89PCh. 2 - Prob. 90PCh. 2 - Prob. 91PCh. 2 - Prob. 92PCh. 2 - Prob. 93PCh. 2 - Prob. 94PCh. 2 - Prob. 95PCh. 2 - Prob. 96PCh. 2 - Prob. 97PCh. 2 - Prob. 98PCh. 2 - Prob. 99PCh. 2 - Prob. 100PCh. 2 - Prob. 101PCh. 2 - Prob. 102PCh. 2 - Prob. 103PCh. 2 - Prob. 104PCh. 2 - Prob. 105PCh. 2 - Prob. 106PCh. 2 - Prob. 107PCh. 2 - Union Pacific is considering the elimination of a...Ch. 2 - Prob. 109PCh. 2 - Prob. 110PCh. 2 - Prob. 111PCh. 2 - Prob. 112APQCh. 2 - Prob. 113APQCh. 2 - Prob. 114APQCh. 2 - Prob. 115APQCh. 2 - Prob. 116APQCh. 2 - Prob. 117APQCh. 2 - Prob. 118APQCh. 2 - Prob. 119APQCh. 2 - Prob. 120APQCh. 2 - Prob. 121APQCh. 2 - Prob. 122APQCh. 2 - Prob. 123APQCh. 2 - Prob. 124APQCh. 2 - Prob. 125APQCh. 2 - Prob. 126APQ
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Similar questions
- Determine the size of your investment account 30 years from now (when you plan to retire) if you deposit $12,000 each year, beginning 1 year from now, and the account earns interest at a rate of 10% per yeararrow_forwardDetermine the exact simple interest on P5,000 for the period from Jan. 15 to Nov 28, 1992, if the rate of interest is 22%.arrow_forwardA small minority firm TheGlobalTrans invested $100,000 for an intersection signal innovation project. At an interest rate of 15% per year, compounded bimonthly, what is the bimonthly income required to recover the investment in 2 years.arrow_forward
- Acme Manufacturing Company is considering purchasing a maintenance contract for its new waste management systems. Acme plans to begin the contract in year 5 and continue through year 10. The cost of the contract is $11,300 per year, increasing by $300 each year. If the company wishes to pre-pay the contract with uniform payments in year 1 through year 5, what is the annual payment that Acme has to pay? Assume Acme's minimum attractive rate of return is 13% per year.arrow_forwardHow much will Kingston Technologies have to pay each year in eight equal payments, starting 2 years from now, to repay a $900,000 loan? The interest rate is 8% per yeararrow_forwardAn Australian - based energy drink manufacturer plans to expand its international markets to the untapped Middle - East region. The company expects that the expansion will bring additional net income of 48024 in the first year of the operation and amounts increasing by $ 5101 for the next 13 years. What is the annual equivalent amount of the net income at an interest rate of 12% per year?arrow_forward
- Vision Technologies, Inc., is a small company that uses ultra-wideband technology to develop devices that can detect objects (including people) inside buildings, behind walls, or below ground. The company expects to spend $100,000 per year for labor and $125,000 per year for supplies for three years before a product can be marketed. At an interest rate of 15% per year, what is the total equivalent present worth of the company’s expenses?arrow_forwardFor the cash flows below, determine the amount in year 1, if the annual worth in years 1 through 9 is 601.17 pesos and the interest rate is 12% per yeararrow_forwardHow much is the interest that will be paid on a Php25,000 loan that was made on May 1, 2002 and repaid on August 1, 2005 with exact simple interest at 8% per year.arrow_forward
- A large water utility is planning to upgrade its SCADA system for controlling well pumps, booster pumps, and disinfection equipment for centralized monitoring and control. Phase I will reduce labor and travel costs by $28,000 per year. Phase II will reduce costs by an additional $20,000 per year, that is $48,000. If phase I savings occur in years 0, 1, 2, and 3 and phase II savings occur in years 4 through 10, what is the present worth of the upgraded system in years 1 to 10 at an interest rate of 8% per year?arrow_forwarda law firm has contracted their client to make the following payment, based on the following schedule of payments; P10,000 immediately, P1,000 at the end of year one, P1,500 at the end of year two, P2,000 at the end of year three, P2,500 at the end of year four, and P3,000 at the end of year five. what fixed amount of money should the company plan to set aside each year at 8% per year compounded annually to make the payments? show your complete solution.arrow_forwardIn an effort to save money for early retirement, an environmental engineering colleague plans to deposit $1200 per month, starting 1 month from now, into a fixed rate account that pays 8% per year, compounded semiannually. How much will be in the account at the end of 25 years?arrow_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
DATA GEMS: How to Access Income Data Tables and Reports From the CPS ASEC; Author: U.S. Census Bureau;https://www.youtube.com/watch?v=BWpVC-Clczw;License: Standard Youtube License