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 42P
To determine
Selection of alternate.
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Q13. 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.
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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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- 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.arrow_forwardA delivery truck has a book value of $10,000 in year 5. The purchase price of the truck is $30,000. If the minimum acceptable rate of return is 10%, what is the equivalent annual capital cost of the truck in year 7?arrow_forwardBiomet Implants is planning new online patient diagnostics for surgeons while they operate. The new system will cost $300,000 to install in an operating room, $5000 annually for maintenance, and have an expected life of 4 years. The revenue per system is estimated to be $80,000 in year 1 and to increase by $10,000 per year through year 4. Determine if the project is economically justified using PW analysis and an MARR of 10% per year.arrow_forward
- 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.arrow_forwardThe capitalized cost of $ 10,000 , every 5 years forever, starting now at an interest rate of 10% per year? ( thanks in advance)arrow_forwardA piece of new equipment has been proposed by engineers to increase the productivity of a certain manual welding operation. The investment cost is 2,500,000, and the equipment will have a market value of 50,000 at the end of a study period of 15 years. Increased productivity attributable to the equipment will amount to 500,000 per year after extra operating costs have been subtracted from the revenue generated by the additional production. If the firm’s Minimum Attractive Rate of Return is 22% per year, is this proposal a sound one? Use the Present Worth Method and Annual Worth Method.arrow_forward
- A new municipal refuse-collection truck can be purchased for $84,000. Its expected useful life is six years, at which time its market value will be zero. Annual receipts less expenses will be approximately $18,000 per year over the six-year study period. At MARR of 19%, calculate the internal rate of return of the project.arrow_forwardIn order for a higher-cost alternative to be attractive, the incremental rate of return must be__________________.A. Greater than MARRB. Less than or equal to MARRC. Less than MARRD. Greater than or equal to MARRarrow_forwardGarcia and Company is considering four mutually exclusive alternatives for CNC machining. The four alternatives are listed below. If they use a MARR of 10%, which alternative should they select? If the useful life is 10 years for each alternative, find the best alternative using incremental rate of return analysis. MARR = 10%arrow_forward
- What is meant by the term equal service alternative?arrow_forwardVirgin Galactic is considering two materials for certain parts in a re-useable space vehicle: carbon fiber reinforced plastic (CFRP) and fiber reinforced ceramic (FRC). The costs are shown below. Which should be selected on the basis of a present worth comparison at an interest rate of 10% per year? Solve using (a) tabulated factors, and (b) single-cell spreadsheet functions.arrow_forwardTrucking giant Yellow Corp agreed to purchase rival Roadway for $966 million in order to reduce so-called back-office costs, that is, payroll and insurance, by $45 million per year. If the savings are realized as planned, what is the rate of return on the investment?arrow_forward
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Valuation Analysis in Project Finance Models - DCF & IRR; Author: Financial modeling;https://www.youtube.com/watch?v=xDlQPJaFtCw;License: Standard Youtube License