EBK BASICS OF ENGINEERING ECONOMY
EBK BASICS OF ENGINEERING ECONOMY
2nd Edition
ISBN: 8220102797123
Author: Blank
Publisher: YUZU
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Chapter 3, Problem 11P
To determine

Calculate the interest rate.

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Bodine Electric makes gear motors with a threestage, selectively hardened gearing cluster that is permanently lubricated. If the company borrows $20 million for a new warehouse/distribution facility, what is the amount to repay the loan in six equal annual payments? The loan’s interest rate is 10% per year.
Corrosion problems and manufacturing defects rendered a gasoline pipeline between El Paso, TX, and Phoenix, AZ, subject to longitudinal weld seam failures. The pressure was reduced to 80% of the design value. If the reduced pressure resulted in delivery of less product valued at $100,000 per month, what will be the value of the lost revenue after a 2-year period at an interest rate of 15% per year, compounded continuously?
Periodic outlays for inventory-control software at Baron Chemicals are estimated to be $120,000 next year, $180,000 in 2 years, and $250,000 in 3 years. What is the present worth of the costs at an interest rate of 10% per year compounded continuously?

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EBK BASICS OF ENGINEERING ECONOMY

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