EBK BASICS OF ENGINEERING ECONOMY
2nd Edition
ISBN: 8220100255052
Author: Blank
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter 4, Problem 10P
The costs associated with manufacturing a multifunction portable gas analyzer are estimated. At an interest rate of 8% per year and a present worth analysis, which method should be selected?
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
A window frame manufacturer is searching for ways to improve revenue from its triple-insulated sliding windows, sold primarily in the far northern areas of the United States. Alternative A is an in- crease in TV and radio marketing. A total of $300,000 spent now is expected to increase revenue by $60,000 per year. Alternative B requires the same investment for enhancements to the in-plant manufacturing process that wil improve the temperature retention properties of the seals around each glass pane. New revenues start slowly for this alternative at an estimated $10,000 the first year, with growth of $15,000 per year as the improved product gains reputation among builders. The MARR is 8% per year and the maximum projection period is 10 years for either alternative.
A delivery truck has a book value of $10,000 in year 5. The purchase price of the truck is $30,000. If the minimum acceptable rate of return is 10%, what is the equivalent annual capital cost of the truck in year 7?
Rent-A-Wreck car rental agency has a contract with PM Warranty, Inc. to do major repairs for $700 per car. The car rental agency estimates that it could repair its own cars for $300 each if it acquires a facility for $300,000 now. A salvage value of $40,000 after 15 years is estimated for the facility. What is the minimum number of cars that must be repaired each year to make the acquisition attractive at an interest rate of 10% per year?
Chapter 4 Solutions
EBK BASICS OF ENGINEERING ECONOMY
Ch. 4 - State two conditions under which the do-nothing...Ch. 4 - Prob. 2PCh. 4 - Prob. 3PCh. 4 - Prob. 4PCh. 4 - Prob. 5PCh. 4 - Prob. 6PCh. 4 - Prob. 7PCh. 4 - Prob. 8PCh. 4 - Prob. 9PCh. 4 - The costs associated with manufacturing a...
Ch. 4 - Prob. 11PCh. 4 - Prob. 12PCh. 4 - Prob. 13PCh. 4 - Prob. 14PCh. 4 - Prob. 15PCh. 4 - Prob. 16PCh. 4 - Prob. 17PCh. 4 - Prob. 18PCh. 4 - Prob. 19PCh. 4 - Prob. 20PCh. 4 - Prob. 21PCh. 4 - Prob. 22PCh. 4 - Prob. 23PCh. 4 - Prob. 24PCh. 4 - Prob. 25PCh. 4 - Prob. 26PCh. 4 - Prob. 27PCh. 4 - Prob. 28PCh. 4 - Prob. 29PCh. 4 - Prob. 30PCh. 4 - Prob. 31PCh. 4 - Two mutually exclusive projects have the estimated...Ch. 4 - Prob. 33PCh. 4 - Prob. 34PCh. 4 - Prob. 35PCh. 4 - Prob. 36PCh. 4 - Prob. 37PCh. 4 - The manager of engineering at the 900-megawatt...Ch. 4 - Prob. 39PCh. 4 - Prob. 40PCh. 4 - Prob. 41PCh. 4 - Three different plans were presented to the GAO by...Ch. 4 - The U.S. Army received two proposals for a turnkey...Ch. 4 - Prob. 44PCh. 4 - Prob. 45PCh. 4 - Prob. 46PCh. 4 - Prob. 47PCh. 4 - Prob. 48PCh. 4 - Prob. 49PCh. 4 - Prob. 50PCh. 4 - Prob. 51PCh. 4 - Prob. 52PCh. 4 - Prob. 53PCh. 4 - Prob. 54PCh. 4 - Prob. 55PCh. 4 - Prob. 56PCh. 4 - Prob. 57PCh. 4 - Prob. 58PCh. 4 - Prob. 59PCh. 4 - Prob. 60PCh. 4 - Prob. 61PCh. 4 - Prob. 62PCh. 4 - Prob. 63APQCh. 4 - Prob. 64APQCh. 4 - Prob. 65APQCh. 4 - Prob. 66APQCh. 4 - Prob. 67APQCh. 4 - Prob. 68APQCh. 4 - Prob. 69APQCh. 4 - Prob. 70APQCh. 4 - Prob. 71APQ
Additional Business Textbook Solutions
Find more solutions based on key concepts
Explain how to derive a total expenditures (TE) curve.
Macroeconomics
(Studying Economics) According to the text, economics majors on average make more money than most other majors ...
ECON: MICRO4 (New, Engaging Titles from 4LTR Press)
A case study in this chapter discusses the federal minimum-wage law. a. Suppose the minimum wage is above the e...
Principles of Economics, 7th Edition (MindTap Course List)
You are advising a coffee shop manager who wants to estimate how much sales will change if the price of a latte...
Microeconomics
Determine the price elasticity of demand if, in response to an increase in price of 10 percent, quantity demand...
Microeconomics
Exercise B1 What point is preferred along an indifference Curve?
Principles of Economics 2e
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
- Compare three alternatives on the basis of their capitalized costs at i=9.00% per year and select the best alternative. (Include a minus sign if necessary.) The capitalized cost of alternative E is $ ox, alternative F is $1375347.55, and alternative G is $ The best alternative isarrow_forwardTo improve package tracking at a UPS transfer facility, conveyor equipment was upgraded with RFID sensors at a cost of $345,000. The operating cost is expected to be $148,000 per year for the first 3 years and $210,000 for the next 3 years. The salvage value of the equipment is expected to be $140,000 for the first 3 years, but due to obsolescence, it won’t have a significant value after that. The interest rate is 10% per year. Determine the ESL and equivalent AW using tabulated factors.arrow_forwardAn irrigation return flow drain has sampling equipment that can be powered by solar cells or by running an electric line to the site and using conventional power. Solar cells will cost $14,000 to install with a useful life of 10 years. Annual costs for inspection, cleaning, etc. are expected to be $1500. A new power line will cost $12,000 to install and the power costs are estimated at $600 per year. The salvage value of the solar cells is expected to be 25% of the first cost when the sampling project ends in 4 years. The electric line will stay in place, so its salvage value is considered to be zero. At an interest rate of 10% per year, which alternative should be selected?arrow_forward
- Biomet Implants is planning new online patient diagnostics for surgeons while they operate. The new system will cost $300,000 to install in an operating room, $5000 annually for maintenance, and have an expected life of 4 years. The revenue per system is estimated to be $80,000 in year 1 and to increase by $10,000 per year through year 4. Determine if the project is economically justified using PW analysis and an MARR of 10% per year.arrow_forwardTwo methods can be used for producing expansion anchors. Method A costs $80,000 initially and will have a $15,000 salvage value after 3 years. The operating cost with this method will be $30,000 per year. Method B will have a first cost of $120,000, an operating cost of $8000 per year, and a $40,000 salvage value after its 3-year life. At the MARR of 12% per year, which method should be used on the basis of a present worth analysis?arrow_forwardThe cost of upgrading a section of Grand Loop Road in Yellowstone National Park is $1.7 million. Resurfacing and other maintenance are expected to cost $350,000 every 3 years. What is the capitalized cost of the road at an interest rate of 6% per year?arrow_forward
- For the cash flows shown, use an annual worth comparison and an interest rate of 12% per year. a) Determine the alternative that is economically best. b) Determine the first cost required for each of the two alternatives not selected in part a) so that all 3 alternatives are equally acceptable.arrow_forwardA piece of new equipment has been proposed by engineers to increase the productivity of a certain manual welding operation. The investment cost is 2,500,000, and the equipment will have a market value of 50,000 at the end of a study period of 15 years. Increased productivity attributable to the equipment will amount to 500,000 per year after extra operating costs have been subtracted from the revenue generated by the additional production. If the firm’s Minimum Attractive Rate of Return is 22% per year, is this proposal a sound one? Use the Present Worth Method and Annual Worth Method.arrow_forwardWhat is meant by the term equal service alternative?arrow_forward
- A manufacturing process at Simplicity XP has a fixed cost of $40,000 per month. A total of 100 units can be produced in 1 day at a cost of $3000 for materials and labor for the day. If the company’s MARR is 12% per year, compounded monthly, how many units must be sold each month at $50 per unit for the company to just break even?arrow_forwardPresent Worth and Capitalized CostA restaurant owner is trying to decide between two different garbage disposals. A regular steel (RS) disposal has an initial cost of P3500, a life of 4 years and a maintenance cost of P100 at the end of the second year. The alternative is a corrosion-resistant disposal constructed primarily of stainless steel (SS). The initial cost of SS disposal is P6000, but it is expected to last for 6 years. Because the SS disposal has a slightly larger motor, it is expected to cost about P200 per year to operate. The salvage value of SS disposal is expected to be P500 at the end of 6 years. If the interest rate is 15% per year compounded quarterly. (a.) Draw the cash flow diagram. (b.) Which disposal should be selected?arrow_forwardFour mutually exclusive alternatives are being evaluated, and their costs and revenues are itemized in the Table. If the MARR 15%per year and the analysis period is 12 years, use the PW method to determine PW1, PW2, PW3, PW4, and which one of those four is the best alternative ?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
The INCOME STATEMENT Explained (Profit & Loss / P&L); Author: Accounting Stuff;https://www.youtube.com/watch?v=hrSUq4wcd0g;License: Standard Youtube License