EBK BASICS OF ENGINEERING ECONOMY
2nd Edition
ISBN: 8220100255052
Author: Blank
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Question
Chapter 6, Problem 16P
To determine
Calculate the
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
The following cash flows result from a potential construction project for your company:
Receipts of $545,000 at the start of the contract and $1,200,000 at the end of the fourth year
Expenditures at the end of the first year of $400,000 and at the end of the second year of $900,000
A net cash flow of $0 at the end of the third year.
Using an appropriate rate of return method (Approximate ERR), for a MARR of 20%, should your company accept this project (Perform all calculations using 5 significant figures and round your answer to one decimal place. )
What is the approximate ERR for this project? %
Should your company undertake this project?
A large automobile manufacturer has developed a continuous variable transmission (CVT) that provides smooth shifting and enhances fuel efficiency by 2 mpg of gasoline. The extra cost of a CVT is $800 on the sticker price of a new car. For a particular model averaging 28 miles per gallon with the CVT, what is the cost of gasoline (dollars per gallon) that makes this option affordable when the buyer’s interest rate is 10% per year? The car will be driven 100,000 miles uniformly over an eight-year period.
What is the present worth difference between an investment of $10,000 per year for 50 years and an investment of $10,000 per year forever at an interest rate of 10% per year?
Chapter 6 Solutions
EBK BASICS OF ENGINEERING ECONOMY
Ch. 6 - Prob. 1PCh. 6 - Prob. 2PCh. 6 - Prob. 3PCh. 6 - Prob. 4PCh. 6 - Prob. 5PCh. 6 - Prob. 6PCh. 6 - Prob. 7PCh. 6 - Prob. 8PCh. 6 - A University of Massachusetts study found that...Ch. 6 - Prob. 10P
Ch. 6 - The Closing the Gaps initiative by the Texas...Ch. 6 - Prob. 12PCh. 6 - Prob. 13PCh. 6 - Prob. 14PCh. 6 - Prob. 15PCh. 6 - Prob. 16PCh. 6 - Prob. 17PCh. 6 - Prob. 18PCh. 6 - Prob. 19PCh. 6 - Prob. 20PCh. 6 - Prob. 21PCh. 6 - Prob. 22PCh. 6 - Prob. 23PCh. 6 - Prob. 24PCh. 6 - Prob. 25PCh. 6 - A company that manufactures rigid shaft couplings...Ch. 6 - For each of the following scenarios, state whether...Ch. 6 - Prob. 28PCh. 6 - Prob. 29PCh. 6 - Prob. 30PCh. 6 - Prob. 31PCh. 6 - Prob. 32PCh. 6 - Prob. 33PCh. 6 - Prob. 34PCh. 6 - Prob. 35PCh. 6 - The four alternatives described below are being...Ch. 6 - Prob. 37PCh. 6 - Prob. 38PCh. 6 - Ashley Foods, Inc. has determined that only one of...Ch. 6 - Five revenue projects are under consideration by...Ch. 6 - Four different machines are under consideration...Ch. 6 - Prob. 42PCh. 6 - Prob. 43PCh. 6 - Prob. 44PCh. 6 - Prob. 45PCh. 6 - Prob. 46PCh. 6 - Prob. 47PCh. 6 - Prob. 48PCh. 6 - Prob. 49PCh. 6 - Prob. 50PCh. 6 - Prob. 51PCh. 6 - Prob. 52PCh. 6 - Prob. 53PCh. 6 - Prob. 54PCh. 6 - Prob. 55PCh. 6 - Prob. 56PCh. 6 - Prob. 57PCh. 6 - Prob. 58PCh. 6 - Prob. 59PCh. 6 - Prob. 60APQCh. 6 - Prob. 61APQCh. 6 - Prob. 62APQCh. 6 - Prob. 63APQCh. 6 - Prob. 64APQCh. 6 - Prob. 65APQCh. 6 - Prob. 66APQCh. 6 - Prob. 67APQCh. 6 - Prob. 68APQCh. 6 - Prob. 69APQCh. 6 - Prob. 70APQ
Knowledge Booster
Similar questions
- What is the internal rate of return on a $3,000 loan to be repaid as $3,500 two years from nowarrow_forwardThe annual revenues (in $1000 units) associated with several large apartment complexes are $0, $350, $290, $460, $150, and $320 for years 0, 1, 2, 3, 4, and 5, respectively. Determine (1) whether each cash flow series is conventional or nonconventional, (2) the maximum number of real-number roots, and (3) if there is one, positive real-number i* value. The cash flows for years 0, 1, 2, 3, 4, and 5, respectively, are: (a) $−1500, $−90, $−40, $−85, $−60, and $−90 (b) $−1500, $−450, $−300, $−400, $−125, and $−400 (c) $1500, $−450, $−300, $−500, $−200, $−400 (d) $−1500, $−450, $−300, $−400, $−125, and $−310arrow_forwardEllis Equipment sold a used Massey Ferguson tractor for $55,000 to a South Kansas farmer 10 years ago. (a) What is the uniform net cash flow that the farmer had to receive each year to realize payback and a return of 5% per year on his investment over a period of 3 years? 5 years? 8 years? All 10 years? (b) If the net cash flow was actually $6000 per year, what is the amount the farmer should have paid for the tractor to realize payback plus the 5% per year return over these 10 years?arrow_forward
- Darnell Enterprises constructed an addition to its building at a cost of $70,000. Extra annual expenses are expected to be $1850, but extra income will be $14,000 per year. How long will it take for the company to recover its investment at an interest rate of 10% per year? Also, write the spreadsheet function that determines np.arrow_forwardWhy is an incremental analysis necessary when conducting a rate of return evaluation of cost alternatives?arrow_forwardQ13. A small construction company has $190,000 set aside in a capital improvement fund to purchase new equipment. If $18,000 is invested at 16%, $34,000 at 21%, and the remaining $138,000 at 19% per year, what is the overall rate of return on the entire $190,000? The overall rate of return on the entire $190,000 is % per year.arrow_forward
- A cookie company wants to expand its retail operations. Based on a preliminary study, 10 stores are feasible in various parts of the country. The cash flow at each store is expected to be $150 per year for five consecutive years. Each store requires an immediate investment of $400 to set up operations. Assuming a required rate of return 6%, what is the NPV of each store?arrow_forwardAn endowment of $1,000,000M has been setup to fund ten engineering scholarships every year in a state university in Tennessee. If the endowment is expected an earn 9% rate of return, the amount of scholarship that can be given from year 2 is $9,000. True / Falsearrow_forwardLesco Chemical is considering two processes for making a cationic polymer. Process A has a first cost of $116,000 and an annual operating cost (AOC) of $57,000 per year. The first cost of process B is $165,000. If both processes will be adequate for 5.000 years and the rate of return on the increment between the alternatives is 25%, what is the amount of the AOC for process B? (Round the final answer to three decimal places.) The amount of the AOC for process B is $?arrow_forward
- According to Norstrom’s criterion, there is only one positive rate of return value in a cash flow series when: (a) The cumulative cash flow starts out positive and changes sign only once (b) The cumulative cash flow starts out negative and changes sign only once (c) The cumulative cash flow total is greater than zero (d) The cumulative cash flow total is less than zeroarrow_forwardYou are considering two types of automobiles. Model A costs $18,000, andModel B costs $15,624.Although the two models are essentially the same, Model A can be sold for $9,000 after four years of use while Model B can be sold for $6,500 after the same amount of time. Model A commands a better resale value because its styling is popular among young college students. Determine the rate of return on the incremental investment of $2,376. For what range of values of your MARR is Model A preferable?arrow_forwardIf a national industry invests SR 200,000 in a natural gas that is expected to provide income of SR 29,000 per year. At an interest rate of 10% per year, what is the number of years required to recover the initial investment?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