Engineering Economy (16th Edition) - Standalone book
16th Edition
ISBN: 9780133439274
Author: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 5, Problem 7P
To determine
Calculate the present worth.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
The city of Oak Ridge is considering the construction of a three kilometer (km) greenway walking trail. It will cost $1,000 per km to build the trail and $320 per km per year to maintain it over its 23-year life. If the city's MARR is 10% per year, what is the equivalent uniform annual cost of this project? Assume the trail has no residual value at the end of 23 years.
A small feed mill company is evaluating two alternatives: the purchase of an automatic feed machine and a manual feed machine for a finishing process. The auto-feed machine has an initial cost of Php23,000, an estimated salvage value of Php4,000, and a predicted life of 10 years. One person will operate the machine at a rate of Php24 per hour. The expected output is 8 tons per hour. Annual maintenance and operating cost is expected to be Php3,500.
The alternative manual feed machine has a first cost of Php8,000, no expected salvage value, a 5-year life, and an output of 6 tons per hour. However, three workers will be required at Php12 per hour each. The machine will have an annual maintenance and operation cost of Php1,500. All projects are expected to generate a return of 10% per year. How many tons per year must be finished in order to justify the higher purchase cost of the auto-feed machine?
There are two choices for replacing a punch press. The basic model has a useful life of 8 years while the deluxe model of 12 years. The most appropriate analysis period for this problem is:
Select one:
a. 1.5 years
b. 20 years
c. 96 years
d. 24 years
Chapter 5 Solutions
Engineering Economy (16th Edition) - Standalone book
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 - Prob. 5PCh. 5 - A large induced-draft fan is needed for an...
Ch. 5 - Prob. 7PCh. 5 - Prob. 8PCh. 5 - Prob. 9PCh. 5 - Prob. 10PCh. 5 - Prob. 11PCh. 5 - Prob. 12PCh. 5 - Prob. 13PCh. 5 - Prob. 14PCh. 5 - Prob. 15PCh. 5 - Prob. 16PCh. 5 - Prob. 17PCh. 5 - Prob. 18PCh. 5 - Prob. 19PCh. 5 - Prob. 20PCh. 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 - Prob. 24PCh. 5 - A simple, direct space heating system is currently...Ch. 5 - Prob. 26PCh. 5 - Prob. 27PCh. 5 - Prob. 28PCh. 5 - Prob. 29PCh. 5 - Prob. 30PCh. 5 - Prob. 31PCh. 5 - Prob. 32PCh. 5 - Stan Moneymaker has been informed of a major...Ch. 5 - Prob. 34PCh. 5 - Prob. 35PCh. 5 - Prob. 36PCh. 5 - Prob. 37PCh. 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 - Prob. 55PCh. 5 - Prob. 56PCh. 5 - Prob. 57PCh. 5 - Prob. 58PCh. 5 - Prob. 59PCh. 5 - a. Calculate the IRR for each of the three...Ch. 5 - Prob. 61PCh. 5 - Prob. 62PCh. 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 - Refer to Problem 5-2. Assuming the residual value...
Knowledge Booster
Similar questions
- Compute the capitalized cost of a new car worth P800,000.00 if it is estimated that it requires P20,000.00 per year to maintain and must be replaced at the same amount with a salvage value of P300,000.00 after 5 years if the interest rate is 12% per annum. Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.arrow_forwardIn a replacement analysis problem, the following information is available Initial cost : 12.000 YTL Annual maintenance cost: None in the first three years 2.000 YTL at the end of the 4th year 2.000 YTL at the end of the 5th year 2,500 YTL per year after the 5th year will increase smoothly (at the end of the 6th year, 4.500 YTL 7.000 YTL at the end of the 7th year, etc. The scrap value in any given year is zero. Take the discount rate of 10% and ignore income taxes. Calculate the most economical life for this candidate equipment. A) 6 B) 2 C) 5 D) 8 E) 4arrow_forwardThe International Parcel Service has installed a new radio frequency identification system to help reduce the number of packages that are incorrectly delivered. The capital investment in the system is $65,000, and the projected annual savings are tabled below. The system’s market value at the EOY five is negligible, and the MARR is 18% per year. Calculate the payback period of the project.arrow_forward
- A manufacturing engineer is considering whether to repair or replace a broken machine. The first alternative (Alternative “A”) is to repair the machine with an initial cost of $15,000, an annual maintenance of $700 per year, with no salvage value at the end of its five-year useful life. The second alternative (Alternative “B”) is to replace the machine for $30,000. The maintenance cost starts in the second year at $200 and increases $200 per year in all subsequent years. There is an anticipated salvage value of $5,000 at the end of 20 years. Assuming interest rate is 6% and an analysis period of 20 years, what would be the preferable alternative ?arrow_forwardCompute the capitalized cost of a new car worth P800,000.00 if it is estimated that it requires P20,000.00 per year to maintain and must be replaced at the same amount with a salvage value of P300,000.00 after 5 years if the interest rate is 12% per annum.arrow_forwardA company that makes micro motion compact coriolis meters purchased a new packaging system for $600,000. The estimated salvage value was $28,000 after 10 years. Currently the expected remaining life is 7 years with an AOC of $27,000 per year and an estimated salvage value of $40,000. The company is considering early replacement of the system with one that costs $370,000, has a 12-year economic service life, a $22,000 salvage value, and an estimated AOC of $50,000 per year. The MARR for the corporation is 12% per year. (a) Determine the minimum trade-in value necessary now to make the replacement economically advantageous. (b) Write the spreadsheet functions necessary to determine RV using Goal Seek.arrow_forward
- ABZ & Company purchased a factory machine of Php. 51,000 on January 1, 2015. The machine is expected to have a salvage value of Php. 6,000 at the end of its 5 year useful life. During the useful life, the machine is expected to be used for 5,000 hours. The machine was used as under, solve using straight-line method:arrow_forwardThe city of Oak Ridge is considering the construction of a four kilometer (km) greenway walking trail. It will cost $1,000 per km to build the trail and $300 per km per year to maintain it over its 20-year life. If the city’s MARR is 7% per year, what is the equivalent uniform annual cost of this project? Assume the trail has no residual value at the end of 20 years.arrow_forwardA company with a MARR of 10% must install one of two production machines. The economic parameters of each machine are as follows: Machine X Y Initial cost ($) $15,000 $22,000 Service life (years) 4 years 6 years Salvage value end of life ($) $2,000 $1,000 The Future worth (FW) for the machine Y over the 12 years analysis period is:arrow_forward
- A recent graduate who wants to start an excavation/ earth-moving business is trying to determine which size of used dump truck to buy. He knows that as the bed size increases, the net income increases, but he is uncertain whether the incremental expenditure required for the larger trucks is justified. The cash flows associated with each size truck are estimated below. The contractor has established a MARR of 18% per year, and all trucks are expected to have a remaining economic life of 5 years. (a) Determine which size truck he should purchase. (b) If two trucks are to be purchased, what should be the size of the second truck? (Note: Problem 8.44 requests a spreadsheet solution of these alternatives.) Truck Bed Size, m3 Initial Investment, $ M&O, $/Year Salvage Value, $ Annual Revenue, $/Year 8 −30,000 −14,000 +2,000 +26,500 10 −34,000 −15,500 +2,500 +30,000 15 −38,000 −18,000 +3,000 +33,500 20 −48,000 −21,000 +3,500 +40,500 25 −57,000 −26,000 +4,600 +49,000arrow_forwardCompany X has been contracting its overhauling work to Company Y for$40,000 per machine per year. Company X estimates that by building a $500,000 maintenance facility with a life of 15 years and a salvage value of $100,000 at the end of its life, it could handle its own overhauling at a cost of only $30,000 per machine per year. What is the minimum annual number of machines that Company X must operate to make it economically feasible to build its own facility, assuming an interest rate of 10%?arrow_forwardA potential project is currently under review. An initial investment of $87,000 would be necessary for equipment. The annual revenues and expenses are expected to be $40,000 and $19,000 each year, respectively, over the 6-year project period. The salvage value of the equipment at the end of the project period is projected to be $17,000. Assume a MARR of 9%. Find the AW (directly - do not convert from either FW or PW - to the nearest cent).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:PEARSONEngineering 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 LearningManagerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage LearningManagerial 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