Basics Of Engineering Economy
Basics Of Engineering Economy
2nd Edition
ISBN: 9780073376356
Author: Leland Blank, Anthony Tarquin
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Chapter 6, Problem 2P
To determine

Calculate the annual payment.

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The president of Biomed Products is considering a long-term contract to outsource maintenance and operations that will significantly improve the energy efficiency of their imaging systems. The payment schedule has two large payments in the first years with continuing payments thereafter. The proposed schedule is $200,000 now, $300,000 four years from now, $50,000 every 5 years, and an annual amount of $8000 beginning 15 years from now and continuing indefinitely. Determine the capitalized cost at 8% per year.
Because of international competition, a company that manufactures high-speed submersible rotary indexing spindles must upgrade its production equipment to reduce costs over a 6-year planning horizon. The company can invest $80,000 one year from now, 2 years from now, or 3 years from now. Depending on when the investment is made, the savings will vary. That is, the savings will be $29,000, 34,000, or $38,000 per year if the investment is made 1, 2, or 3 years from now, respectively. Will the timing of the investment affect the request to make at least 20% per year return? Use future worth analysis and solve using factors.           (Click to select) No Yes  , the timing of the investment         (Click to select) will not will  affect the request to make at least 20% per year return.   The investment must be made in            (Click to select) 3 2 1  years.
A manufacturer of electronic devices invests $650,000 in equipment for making compact piezoelectric accelerometers for general purpose vibration measurement. Estimate the rate of return from revenue of $225,000 per year for 10 years and $70,000 in salvage value from the used equipment sale in year 10. The company uses an MARR of 25%. Solve (a) Manually using interpolation, and (b) using Excel spreadsheet function.

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Basics Of Engineering Economy

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