EBK BASICS OF ENGINEERING ECONOMY
EBK BASICS OF ENGINEERING ECONOMY
2nd Edition
ISBN: 8220100255052
Author: Blank
Publisher: MCG
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Chapter 4, Problem 51P
To determine

Calculate the difference in capitalized cost.

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The capital investment cost for a switchgrass-fueled ethanol plant with a capacity of 250,000 gallons per year is $6 million. The cost-capacity factor for this particular plant technology is 0.59 for capacities ranging from 200,000 gallons per year to 500,000 gallons per year. What is the estimated capitalinvestment for a similar ethanol plant with a capacity of 450,000 gallons per year?
If alternative A has i * A = 10% and alternative B has i * B = 18% per year, what is known about the rate of return on the increment between A and B if the investment required in B is (a) larger than that required for A, and (b) smaller than that required for A?
Define the term capitalized cost and give a realworld example of something that might be analyzed using a capitalized cost evaluation technique.

Chapter 4 Solutions

EBK BASICS OF ENGINEERING ECONOMY

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