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 37P
To determine
Selection of independent alternative on the basis of overall
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A Company purchased equipment that has two year warranty and AOC = $1500 per year, beginning in year 3 and continuing through the equipment's 10-year life. What is the approximate PW of the operating cost if the interest rate is 9%?
An oil refinery finds that it is necessary to treat the waste liquids from a new process before discharging them into a stream. In-house treatment will have an annual cost of
$50,000
the first year, but process improvements will allow the annual cost to decline by
$5,000
each subsequent year. As an alternative, an outside company will process the wastes for an initial cost of
$32,400
and an annual fixed price of
$30,400/year
throughout the
13
year period. Either way, there is no need to treat the wastes after
13
years. Using the AW method, calculate the equivalent uniform annual cost (EUAC) of each alternative and determine how the waste should be processed. The company's MARR is
8%.
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8%
per year.
White Oaks Properties builds strip shopping centers and small malls. The company plans to replace its refrigeration, cooking, HVAC, and other equipment with newer models in the entire center built 9 years ago. The original purchase price of the equipment was $766,000 nine years ago and the operating cost has averaged $240,000 per year. Determine the equivalent annual cost of the installed equipment, if the company can now sell it for $160,000. The company’s MARR is 25% per year.
The equivalent annual cost of the installed equipment is $−
Chapter 6 Solutions
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
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- What is the present worth difference between an investment of $30,000 per year for 40 years and aninvestment of $30,000 per year forever at an interest rate of 15% per year?arrow_forwardAn engineer is trying to decide which process to use to reduce sludge volume prior to disposal. Belt filter presses (BFP) will cost $203,000 to buy and $85,000 per year to operate. Belts will be replaced one time per year at a cost of $5500. Centrifuges (Cent) will cost $396,000 to buy and $119,000 per year to operate, but because the centrifuge will produce a thicker “cake”, the sludge hauling cost to the monofill will be $37,000 per year less than for the belt presses. The useful lives are 5 and 10 years for alternatives BFP and Cent, respectively, and the salvage values are assumed to be 10% of the first cost of each process whenever they are closed down or replaced. Use PW evaluation to select the more economical process at an interest rate of 6% per year over (a) the LCM of lives, and (b) a study period of 8 years. Are the decisions the same?arrow_forwardA company must relocate one of its factories in three years. Equipment for the loading dock is being considered for purchase. The original cost is P 220 000, the salvage value of the equipment after three years is P8000. The company’s rate of return(i) on the money is 10%. Determine the capital rate per year.arrow_forward
- (a) How long would it take to recover an investment of $245,000 in enhanced CNC controls that include axis control to eight axes on the milling model, if the associated income is $92,000 per year, expense is $38,000 per year, and the salvage value is estimated to be 15% of the first cost? Use a MARR of 15% per year. (b) Also, write the spreadsheet function that determines np.arrow_forwardThe initial cost of a packed-bed degassing reactor for removing trihalomethanes from potable water is $84,000. The annual operating cost for power, site maintenance, etc. is $13,000. If the salvage value of the pumps, blowers, and control systems is expected to be $9000 at the end of 10 years, the AW of the packed-bed reactor, at an interest rate of 8% per year, is closest to: (a) $−26,140 (b) $−25,518 (c) $−24,900 (d) $−13,140arrow_forwardThe Civil Engineering department at RRCP plans to purchase a 3D printer for the CARSI lab. One option is the purchase of a brand new machine (purchase price $1900), and will have a salvage value of $700 after three years. A second option is the purchase of a refurbished machine (purchase price $1200), which will cost $250 per year to maintain, with a salvage value of $250 after three years. What is the interest rate that will make these two options equivalent with respect to Present Worth?arrow_forward
- The production of polyamide from raw materials of plant origin, such as castor oil, requires 20% less fossil fuel than conventional production methods.Darvon Chemicals borrowed $6 million to implement the process. If the interest rate on the loan is 10% per year for 10 years, what is the amount of interest for year 2?arrow_forwardWhat is the Present Worth of Alternative A (Round off answer to 2 decimal places)arrow_forwardDetrich Products is planning to upgrade an aging manufacturing operation 5 years from now at a cost of $100,000. If the company plans to deposit money into an account each year for 4 years beginning 2 years from now (first deposit is in year 2) to pay for the expansion, the amount of the deposit at 10% per year interest is closest to: (a) $30,211 (b) $21,547 (c) $16,380 (d) $14,392arrow_forward
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