EBK BASICS OF ENGINEERING ECONOMY
EBK BASICS OF ENGINEERING ECONOMY
2nd Edition
ISBN: 8220102797123
Author: Blank
Publisher: YUZU
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Chapter 5, Problem 1P
To determine

Calculate the required revenue.

Expert Solution & Answer
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Explanation of Solution

Time period is denoted by n and interest rate is denoted by i. Required revenue (RR) can be calculated as follows.

RR=CostTube(i(1+i)n(1+i)n1)+CostAnnual operating=7,000,000(0.15(1+0.15)3(1+0.15)31)860,000=3,925,860

Required revenue is $3,925,860 per year.

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