Contemporary Engineering Economics (6th Edition)
6th Edition
ISBN: 9780134105598
Author: Chan S. Park
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 6, Problem 3P
To determine
Calculate the annual worth.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Determine the present equivalent value (PW at 0) of the following cash flow when the annual interest rate varies as indicated:
A tire manufacturing plant is considering purchasing $14,000 worth of new tools for use on the production line. It is estimated that the new tools will reduce required labor by $3,000 each year. The payback period for the new tools is approximately
Group of answer choices
5 years
6 years
5.13 years
4.67 years
Consider the following cash flows and compute the equivalent annual worth at i = 12%:
Chapter 6 Solutions
Contemporary Engineering Economics (6th Edition)
Ch. 6 - Prob. 1PCh. 6 - Prob. 2PCh. 6 - Prob. 3PCh. 6 - Prob. 4PCh. 6 - Prob. 5PCh. 6 - Prob. 6PCh. 6 - Consider the cash flows in Table P6.7 for the...Ch. 6 - Prob. 8PCh. 6 - Prob. 9PCh. 6 - The repeating cash flows for a certain project are...
Ch. 6 - Beginning next year, a foundation will support an...Ch. 6 - Prob. 12PCh. 6 - Prob. 13PCh. 6 - Prob. 14PCh. 6 - Prob. 15PCh. 6 - Prob. 16PCh. 6 - Prob. 17PCh. 6 - Prob. 18PCh. 6 - The Geo-Star Manufacturing Company is considering...Ch. 6 - Prob. 20PCh. 6 - Prob. 21PCh. 6 - Prob. 22PCh. 6 - Prob. 23PCh. 6 - Prob. 24PCh. 6 - Prob. 25PCh. 6 - Prob. 26PCh. 6 - Prob. 27PCh. 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 - Prob. 36PCh. 6 - Prob. 37PCh. 6 - Prob. 38PCh. 6 - Prob. 39PCh. 6 - Prob. 40PCh. 6 - Prob. 41PCh. 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. 1STCh. 6 - Prob. 2STCh. 6 - Prob. 3STCh. 6 - Prob. 4ST
Knowledge Booster
Similar questions
- What is the equivalent annual maintenance cost over the infinite servicelife?arrow_forwardYou invest in a piece of equipment costing $30,000. The equipment will be used for two years, at the end of which time the salvage value of the machine is expected to be $10,000. The machine will be used for 5,000 hours during the first year and 8,000 hours during the second year. The expected annual net savings in operating costs will be $25,000 during the first year and $40,000 during the second year. If your interest rate is 10%, what would be the equivalent net savings per machine-hour? Solved in Excel is perfered!arrow_forwardAdvanced Electrical Insulator Company is considering replacing a brokeninspection machine, which has been used to test the mechanical strength of electrical insulators with a newer and more efficient one. If repaired, the old machine can be used for another five years although the firm does not expect to realize any salvage value from scrapping it in five years. Alternatively, the firm can sell the machine to another firm in the industry now for $5,000. If the machine is kept, it will require an immediate $1,200 overhaul to restore it to operable condition. The overhaul will neither extend the service life originally estimated nor increase the value of the inspection machine. The operating costs are estimated at $2,000 during the first year and are expected to increase by $1,500 per year thereafter. Future market values are expected to decline by $1,000 per year. The new machine costs $10,000 and will have operating costs of $2,000 in the first year, increasing by $800 per year…arrow_forward
- A company expects to retire an existing machine at the end of 2024 and will replace it with a new machine for the same task at an estimated cost of P60,035. The old machine is expected to be sold for P5,000 when it is replaced. To provide for the replacement, the company intends to deposit the following amounts in an account earning interest at 8% compounded quarterly: - P20,000 at the end of 2021 - P15,000 at the end of 2022 - P10,000 at the end of 2023 What additional amount is needed at the end of 2024 to purchase the new machine? Draw the Cash flow diagram.arrow_forwardA machine is under consideration for investment. The cost of the machine is 28,000. Each year it operates the machine generate a savings of P16,000. Given an effective annual interest rate of 16%. What is the discounted payback period in years, on the investment in the machine? Show complete solution.arrow_forwardTwo options are available for painting your house: (1) Oil-based painting, which costs $5,000, and (2) water-based painting, which costs $3,000. The estimated lives are 10 years and 5 years, respectively. For either option, no salvage value will remain at the end of the respective service lives. Assume that you will keep and maintain the house for 10 years. If your personal interest rate is 10% per year, which of the following statements is correct?(a) On an annual basis, Option 1 will cost about $850(b) On an annual basis, Option 2 is about $22 less than Option 1(c) On an annual basis, both options cost about the same( d) On an annual basis, Option 2 will cost about $820.arrow_forward
- A new boiler was installed by a textile plant at a cost of P 3M and projected to havea useful life of 15 years. At the end of its life its estimated salvage value is P100,000. Determine its capitalized cost at an interest of 12%.arrow_forwardIf a project costs $90,000 and is expected to return $24,500 annually, how long does it take to recover the initial investment? What would be the discounted payback period at i=14%? Assume that the cash flows occur continuously throughout the year. The payback period is___________years. (Round to one decimal place.)arrow_forwardConsider a palletizer at a bottling plant that has a first cost of $150,000, operating and maintenance costs of $17,500 per year, and an estimated net salvage value of $25,000 at the end of thirty years. Assume an interest rate of 8%. What is the future equivalent cost of the investment if the planning horizon is thirty years? $3,517,000 $3,371,000 $3,623,000 $3,980,000arrow_forward
- Two 150-horsepower (HP) motors are being considered for installation at amunicipal sewage treatment plant. The first costs $4,500 and has an operating efficiency of 83%. The second costs $3,600 and has an operating efficiency of 80%. Both motors are projected to have zero salvage value after a life of 10 years. All the annual charges, such as insurance and maintenance, amount to a total of 15% of the original cost of each motor. If power cost is a flat 5 cents per kilowatt-hour, which alternative should be chosen at 5,000 operating hours per year? Assume an interest rate of 6%. (A conversion factor you might find useful is IHP = 746watts = .746kilowatts.)arrow_forwardA hospital in NYC area bought a diagnostic machine at a cost of $40,000. Maintenance cost is expected to remain constant throughout the life of this machine at $2,000 per year. The salvage value is estimated to be “0” at the end of the useful life of 10 years. Determine the economic life of this machine. MARR = 10% A. 5 years B. 1 year C. 10 years D. 7 yearsarrow_forwardA piece of equipment has an initial cost of $150,000. The market value at the end of each of the next five years is expected to be $65,000, $45,000, $25,000, $5,000 and $0 respectively. The operating and maintenance costs in year 1 are expected to be $10,000 and to increase by $4,000 per year starting in year 2. What is the minimum cost life for this equipment? Assume MARR = 10 %.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