Engineering Economy (17th Edition)
17th Edition
ISBN: 9780134870069
Author: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter 5, Problem 59P
In southern California a photovoltaic (PV) system for a certain home costs $28,000 for parts and installation. This 6.1 kW system requires 350 ft2 of rooftop space and has an estimated life of 20 years.
- a. If this PV system saves $200 each month in electricity expenses, what is the simple payback period in months? (5.8)
- b. If the market value of the PV system is negligible, what is the system’s
IRR ? (5.6)
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
You are being asked to evaluate the worthiness of an investment that requires you to spend $120,000 today in return for receiving $25,000 each year for seven years (starting one year from now). At the end of the seven year study period, the investment can be sold for $10,000. The MARR = 12% per year.
Compute the AW of this investment. Round your answer to the nearest dollar.
Answer should be -301
The annual income from an apartment complex is $21,128. The annual expense is estimated to be $3,272. The apartment complex could be sold for $108,281 at the end of 10 years. If your MARR is 10%, how much should you pay for the apartment complex if you were to buy it now?
A Company wants to prioritize the efficiency and effectiveness of its company. On the advice of the Technical Manager, Naufal Fahmi, to save energy by installing a device that costs Rp. 200 million. The tool is estimated to provide savings of Rp. 10 million/year in the first 2 years, then increased to Rp. 12 million/year for the next 5 years, and Rp. 15 million in the following years. If the age of the tool is 10 years. If MARR=6%
a. Create cashflow from this case
b. Should this decision be made?
Chapter 5 Solutions
Engineering Economy (17th Edition)
Ch. 5.A - Use the ERR method with = 8% per year to solve for...Ch. 5.A - Apply the ERR method with = 12% per year to the...Ch. 5.A - Are there multiple IRRs for the following...Ch. 5.A - Are there multiple IRRs for the following cash...Ch. 5 - Tennessee Tool Works (TTW) is considering...Ch. 5 - Prob. 2PCh. 5 - Prob. 3PCh. 5 - Prob. 4PCh. 5 - What is the capitalized worth of a project that...Ch. 5 - A large induced-draft fan is needed for an...
Ch. 5 - Prob. 7PCh. 5 - Prob. 8PCh. 5 - Prob. 9PCh. 5 - A corporate bond pays 5% of its face value once...Ch. 5 - Prob. 11PCh. 5 - Prob. 12PCh. 5 - Prob. 13PCh. 5 - The cash-flow diagram below has an internal rate...Ch. 5 - Prob. 15PCh. 5 - Prob. 16PCh. 5 - Prob. 17PCh. 5 - Prob. 18PCh. 5 - Prob. 19PCh. 5 - Your firm is thinking about investing 200,000in...Ch. 5 - Determine the FW of the following engineering...Ch. 5 - Prob. 22PCh. 5 - Fill in Table P5-23 below when P = 10,000, S = 2,...Ch. 5 - An asset has an initial capital investment of4...Ch. 5 - A simple, direct space heating system is currently...Ch. 5 - Prob. 26PCh. 5 - Prob. 27PCh. 5 - Prob. 28PCh. 5 - Prob. 29PCh. 5 - Its easier to make money when interest rates in...Ch. 5 - Prob. 31PCh. 5 - Prob. 32PCh. 5 - Stan Moneymaker has been informed of a major...Ch. 5 - The required investment cost of a new, large...Ch. 5 - Prob. 35PCh. 5 - A parking garage has a capital investment cost of...Ch. 5 - The city of Oak Ridge is considering the...Ch. 5 - Prob. 38PCh. 5 - Prob. 39PCh. 5 - Prob. 40PCh. 5 - Prob. 41PCh. 5 - Prob. 42PCh. 5 - Prob. 43PCh. 5 - To purchase a used automobile, you borrow 10,000...Ch. 5 - Your boss has just presented you with the summary...Ch. 5 - Experts agree that the IRR of a college education...Ch. 5 - A company has the opportunity to take over a...Ch. 5 - The prospective exploration for oil in the outer...Ch. 5 - Prob. 49PCh. 5 - An integrated, combined cycle power plant produces...Ch. 5 - A computer call center is going to replace all of...Ch. 5 - Prob. 52PCh. 5 - Prob. 53PCh. 5 - Prob. 54PCh. 5 - The upturned wingtips on jet aircraft reduce drag...Ch. 5 - Prob. 56PCh. 5 - Prob. 57PCh. 5 - Prob. 58PCh. 5 - In southern California a photovoltaic (PV) system...Ch. 5 - a. Calculate the IRR for each of the three...Ch. 5 - Prob. 61PCh. 5 - A hospital germ-fighting and floor cleaning robot,...Ch. 5 - Prob. 63PCh. 5 - Prob. 64SECh. 5 - Prob. 65SECh. 5 - Prob. 66SECh. 5 - A certain medical device will result in an...Ch. 5 - Refer to Problem 5-61. Develop a spreadsheet to...Ch. 5 - Prob. 69CSCh. 5 - Prob. 70CSCh. 5 - Suppose that the average utilization of the CVD...Ch. 5 - Prob. 72FECh. 5 - Prob. 73FECh. 5 - Prob. 74FECh. 5 - Prob. 75FECh. 5 - Prob. 76FECh. 5 - Prob. 77FECh. 5 - Prob. 78FECh. 5 - Prob. 79FECh. 5 - A new machine was bought for 9,000 with life of...Ch. 5 - Prob. 81FECh. 5 - Prob. 82FECh. 5 - Prob. 83FECh. 5 - Prob. 84FECh. 5 - Prob. 85FE
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
- A 2,000 square foot house New Jersey costs $1, 714 each winter to heat with its existing oil burning furnace For an investment of $5000, a natural gas furnace can be installed, and the winter heating bill is estimated to be $1,000. If the homeowner's MARR is 6% per year, what is the simple payback period of this proposed investment? 7 years 8 years 9 years 10 yearsarrow_forwardEngineers have suggested a new piece of machinery to boost the productivity of a certain manual soldering process. The equipment will cost $25,000 to invest in, and at the conclusion of its anticipated five-year lifespan, it will be worth $5,000 in the market (as salvage). After deducting additional running expenses from the value of the higher production, the equipment's increased productivity will amount to $8,000 per year. Assume that =MARR = 20% annually. What is the ERR for the project, and is it a good project? sketch out a cash flow diagram.arrow_forwardAn environmentally friendly green home (99% air tight) costs about 8% more to construct than a conventional home. Most green homes can save 15% per year on energy expenses to heat and cool the dwelling. For a $250,000 conventional home, how much would have to be saved in energy expenses per year when the life of the home is 30 years and the interest rate is 10% per year? Assume the additional cost of a green home has no value at the end of 30 years.arrow_forward
- Carlisle Company has been cited and must invest in equipment to reduce stack emissions or face EPA fines of $22,500 per year. An emission reduction filter will cost $95,000 and will have an expected life of 5 years. Carlisle’s MARR is 9 %/year. What is the present worth of this investment? $Carry all interim calculations to 5 decimal places and then round your final answer to the nearest dollar. The tolerance is ±5.arrow_forwardAn item is purchased for P100,000. Annual cost is P18000. Using an interest rate of 8%, what is the capitalized cost of the perpetual service?arrow_forwardOn average, it needs P250,000 per year and an additional P600,000 every 4 years for major repairs to maintain a certain three-storey office building. How much must be paid now to take care of these payments on a bank that offers 8% per year? choices: none of the above P143,999.078 P4,789,355.06 P5,000,000.06arrow_forward
- The average annual cost of damages caused by floods at Dona Rosario Villagelocated along Butuanon river is estimated at P700,000. To build a gravity dam to protect the area from the floods, would cost P2,500,000 and would involve an annual maintenance cost of P20,000. With interest at 8% compounded annually, how many years will it take for the dam to pay for itself? Please be clear with the formulas and computations. OPTIONS A. 4.0 years B. 4.5 years C. 5.0 years D. 5.5 yearsarrow_forwardA businessman is faced with the prospect of fluctuating future budget for the maintenance of the generator. During the first 5 years, P1,000 per year will be budgeted. During the second five years, the annual budget will be P1,500 per year. In addition, P3,500 will be budgeted for an overhaul of the machine at the end of the fourth year and another P3,500 for an overhaul at the end of 8th year. Assuming compound interest at 6% per annum, what is the equivalent annual cost of maintenance?arrow_forwardCombined-cycle power plants use two combustion turbines to produceelectricity. Heat from the first turbine’s exhaust is captured to heatwater and produce steam sent to a second steam turbine thatgenerates additional electricity. A 968-megawatt combined-cycle gasfired plant can be purchased for P450 million, has no salvage value,and produces a net cash flow (revenues less expenses) of P50 millionper year over its expected 30-year life.a. If the hurdle rate (MARR) is 14% per year, how profitable aninvestment is this power plant?b. What is the simple payback period for the plant? Is this investmentacceptable?arrow_forward
- Hollygan Co. must choose between gas-powered and an electric-powered forklift truck for moving materials in its factory. Because both forklifts perform the same function, the firm will choose only one. (They are mutually exclusive investments.) The electric-powered truck will cost more, but it will be less expensive to operate; it will cost $110,000, whereas the gas powered truck will cost $40,000. The required rate of return that applies to both investments is 14 percent. The life for both types of truck is estimated be 12 years, during which time the net cash flows for the electric-powered truck will be $23,500 per year and those for gas-powered truck will be $10,000 per year. Calculate the NPV and IRR for each type of truck, and decide which to recommend. (Written work shown please)arrow_forwardThe Department of Energy is proposing new rules mandating either a 20% increase or a 35% increase in clothes washer efficiency in 3 years. The 20% increase is expected to add $100 to the current price of a washer, while the 35% increase will add $240 to the price. If the cost for energy is $80 per year with the 20% increase in efficiency and $65 per year with the 35% increase, which one of the two proposed standards is more economical on the basis of a future worth analysis at an interest rate of 10% per year? Assume a 15-year life for all washer models.arrow_forwardMr. Santos wishes to provide P4,000.00 for his son on his 21st birthday. How much should he deposit every 6 months in a savings bank which pays 4% converted semi-annually, if the first deposit is made when the son is 3 ½ years old? a.P71.55 b.P61.55 c.P51.55 d.P41.55arrow_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
What is Efficiency?; Author: Marketing Business Network;https://www.youtube.com/watch?v=HtyE1V6jXek;License: Standard Youtube License