Engineering Economy (16th Edition) - Standalone book
16th Edition
ISBN: 9780133439274
Author: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 6, Problem 46P
To determine
Calculate the present value.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Two electric motors are being economically evaluated for the use in unmanned vehicle. Each is capable of delivering 90 horsepower to a necessary application that the vehicle performs. Data for the mutually exclusive motors as follows:
If the expected usage of the motor is 700 hours per year, what would the cost of electric power have to be (in $ per kWh) before the Motor Y is favored over the Motor X? Use i =10% per year. (1 horsepower = 0.746 kilowatts)
A machine cost $315,000 to purchase. Fuel, oil, grease, and minor maintenance are
estimated to cost $53.50 per operating hour. A set of tires cost $16,000 to replace, and
their estimated life is 3,100 use hours. A $17,000 major repair will probably be required
after 6,200 hr of use. The machine is expected to last for 9,300 hr, after which it will be
sold at a price (salvage value) equal to 13% of the original purchase price. A final set of
new tires will not be purchased before the sale. How much should the owner of the
machine charge per hour of use, if it is expected that the machine will operate 3,100 hr
per year? The company's cost-of-capital rate is 7.25%.
A Loader cost Ph 2,115,000 to purchase. Fuel, oil grease, and minor maintenance are estimated to cost Ph580 per operating hour. A set of tires cost Ph150,000 to replace, and their estimated life is 2,800 use hours. A Ph282,000 major repair will probably be required after 4,200hr of use. The equipment is expected to last for 8,400 hr, after which it will be sold at a price equal to 15% of the original purchase price. A final set of new tires will not be purchased before the sale. How much should the owner of the Dozer charge per hour of use, if it is expected that the machine will operate 1,400 hr per year? The company’s capital rate is 8%.
Chapter 6 Solutions
Engineering Economy (16th Edition) - Standalone book
Ch. 6 - Prob. 1PCh. 6 - The Consolidated Oil Company must install...Ch. 6 - Prob. 3PCh. 6 - Three mutually exclusive design alternatives are...Ch. 6 - Prob. 5PCh. 6 - Prob. 6PCh. 6 - Fiesta Foundry is considering a new furnace that...Ch. 6 - Prob. 8PCh. 6 - Prob. 9PCh. 6 - Consider the following cash flows for two mutually...
Ch. 6 - Prob. 11PCh. 6 - Prob. 12PCh. 6 - The alternatives for an engineering project to...Ch. 6 - Prob. 14PCh. 6 - Prob. 15PCh. 6 - Prob. 16PCh. 6 - Refer to the situation in Problem 6-16. Most...Ch. 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 - In the Rawhide Company (a leather products...Ch. 6 - Refer to Problem 6-2. Solve this problem using the...Ch. 6 - Prob. 28PCh. 6 - Prob. 29PCh. 6 - Prob. 30PCh. 6 - Prob. 31PCh. 6 - Prob. 32PCh. 6 - Prob. 33PCh. 6 - Potable water is in short supply in many...Ch. 6 - Prob. 35PCh. 6 - Prob. 36PCh. 6 - In the design of a special-use structure, two...Ch. 6 - Prob. 38PCh. 6 - a. Compare the probable part cost from Machine A...Ch. 6 - Prob. 40PCh. 6 - Two mutually exclusive alternatives are being...Ch. 6 - Prob. 42PCh. 6 - IBM is considering an environmentally conscious...Ch. 6 - Three mutually exclusive earth-moving pieces of...Ch. 6 - A piece of production equipment is to be replaced...Ch. 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. 60PCh. 6 - Prob. 61PCh. 6 - Prob. 62PCh. 6 - Prob. 63PCh. 6 - Prob. 64PCh. 6 - Prob. 65PCh. 6 - Prob. 66PCh. 6 - Three models of baseball bats will be manufactured...Ch. 6 - Refer to Example 6-3. Re-evaluate the recommended...Ch. 6 - Prob. 69SECh. 6 - Prob. 70SECh. 6 - Prob. 71SECh. 6 - Prob. 72CSCh. 6 - Prob. 73CSCh. 6 - Prob. 74CSCh. 6 - Prob. 75FECh. 6 - Prob. 76FECh. 6 - Prob. 77FECh. 6 - Complete the following analysis of cost...Ch. 6 - Prob. 79FECh. 6 - For the following table, assume a MARR of 10% per...Ch. 6 - Prob. 81FECh. 6 - Problems 6-82 through 6-85. (6.4) Table P6-82 Data...Ch. 6 - Prob. 83FECh. 6 - Problems 6-82 through 6-85. (6.4) Table P6-82 Data...Ch. 6 - Problems 6-82 through 6-85. (6.4) Table P6-82 Data...Ch. 6 - Consider the mutually exclusive alternatives given...Ch. 6 - Prob. 87FE
Knowledge Booster
Similar questions
- Lennon Hearth Products manufactures glass-door fireplace screens that have two types of mounting brackets for the frame. An L-shaped bracket is used for relatively small fireplace openings and a Ushaped bracket is used for all others. The company includes both types of brackets in the box with their product and the purchaser discards the one not needed. The cost of these two brackets with screws and other parts is $3.50. If the frame of the fireplace screen is redesigned, a single universal bracket can be used that will cost $1.20 to make. However, initial costs of retooling ($6000) and inventory writedowns ($8000) will be incurred immediately. If the company sells 1200 fireplace units per year, should the company keep the old brackets or go with the new ones, assuming the company uses an interest rate of 15% per year and it wants to recover its investment in 5 years. Use the present worth method for your evaluation.arrow_forwardProblem 05.031 Future Worth Analysis A small strip-mining coal company is trying to decide whether it should purchase or lease a new clamshell. If purchased, the "shell" will cost $137,500 and is expected to have a $42,500 salvage value after 6 years. Alternatively, the company can lease a clamshell for only $13,000 per year, but the lease payment will have to be made at the beginning of each year. If the clamshell is purchased, it will be leased to other strip-mining companies whenever possible, an activity that is expected to yield revenues of $9,000 per year. If the company's MARR is 11% per year, should the clamshell be purchased or leased on the basis of a future worth analysis? Assume the annual M&O cost is the same for both options. The future worth when purchased is $ The future worth when leased is $ The clamshell should b✓ (Click to select) leased purchasedarrow_forwardThe initial cost of a pickup truck is $12,748 and will have a salvage value of $4,360 after five years. Maintenance is estimated to be a uniform gradient amount of $121 per year, with zero dollar for first year maintenance. The operation cost is estimated to be $0.3 per mile for 351 miles per month. If the interest rate is 12%, what is the annual equivalent cost (AEC) for the truck?arrow_forward
- A transportation engineer received a request to install dynamic traffic signals to replace static vehicle control devices at an intersection. The engineer must prepare an estimate of an operating budget for a 10-year period, if the signals were installed. The initial cost of the signals is $35,000 and the installation costs are $12,000. The estimated energy cost to operate the signals for the first year is $1000. The energy cost is expected to increase uniformly each year by 1.5% of the first year's energy cost. Assume an interest rate of 8%. What is the EUAC for the operating budget? Salvage value at the end of the 10-year period is negligible.arrow_forwardEngineering Economics You bought a new car which you intend to use as a public utility vehicle for P950,000. The expected life of the car is ten (10) years for its intended use. Your driver and you agreed that for the first five (5) years , your “boundary” is P1,500.00 per day and P1,000.00 per day for the rest of its economic life. You also expected a repair and maintenance costs of P30,000 every six (6) months from year one (1) to five (5) and P50,000 from year six (6) to ten (10). At the end of 10 years you can sell the car for P100,000. If your MARR on invested capital is 15% every (6) months, determine whether this is a good investment. Use the Annual Worth method in your solution. Indicate all other assumptions you use in your analysis.Use manually solve and don't use excel.arrow_forwardEngineering Economics You bought a new car which you intend to use as a public utility vehicle for P950,000. The expected life of the car is ten (10) years for its intended use. Your driver and you agreed that for the first five (5) years , your “boundary” is P1,500.00 per day and P1,000.00 per day for the rest of its economic life. You also expected a repair and maintenance costs of P30,000 every six (6) months from year one (1) to five (5) and P50,000 from year six (6) to ten (10). At the end of 10 years you can sell the car for P100,000. If your MARR on invested capital is 15% every (6) months, determine whether this is a good investment. Use the Annual Worth method in your solution. Indicate all other assumptions you use in your analysis. Manually solve and don't use excel as a solution.arrow_forward
- Engineering Economics You bought a new car which you intend to use as a public utility vehicle for P950,000. The expected life of the car is ten (10) years for its intended use. Your driver and you agreed that for the first five (5) years , your “boundary” is P1,500.00 per day and P1,000.00 per day for the rest of its economic life. You also expected a repair and maintenance costs of P30,000 every six (6) months from year one (1) to five (5) and P50,000 from year six (6) to ten (10). At the end of 10 years you can sell the car for P100,000. If your MARR on invested capital is 15% every (6) months, determine whether this is a good investment. Use the present Worth method in your solution. Indicate all other assumptions you use in your analysis.Use manually solve and don't use excel.arrow_forwardEngineering Economics You bought a new car which you intend to use as a public utility vehicle for P950,000. The expected life of the car is ten (10) years for its intended use. Your driver and you agreed that for the first five (5) years , your “boundary” is P1,500.00 per day and P1,000.00 per day for the rest of its economic life. You also expected a repair and maintenance costs of P30,000 every six (6) months from year one (1) to five (5) and P50,000 from year six (6) to ten (10). At the end of 10 years you can sell the car for P100,000. If your MARR on invested capital is 15% every (6) months, determine whether this is a good investment. Use the Annual Worth method in your solution.Don't use excel.arrow_forwardProblem 06.008 Annual Worth and Capital Recovery Calculations White Oaks Properties builds strip shopping centers and small malls. The company plans to replace its refrigeration, cooking, and HVAC equipment with newer models in one entire center built 11 years ago. 11 years ago, the original purchase price of the equipment was $750,000 and the operating cost has averaged $240,000 per year. Determine the equivalent annual cost of the equipment if the company can now sell it for $234,000. The company's MARR is 19% per year. The equivalent annual cost of the equipment is determined to be $ 399506.4arrow_forward
- Your boss has asked you to look into optimizing the commercial van ownership strategy for your company. The company you work for bought a van for $95,600 for making deliveries. You expect the van to be driven 17,000 miles per year, with each mile costing you around $1.00 per mile in the first year. The operating cost per mile is expected to increase by 7% per year after the first year. The resale value of the van is expected to decrease by 15% in the first year and then by 7% per year from there on out. What is the optimal ownership period (economic life) in years assuming a MARR of 9%? 8 years 4 years 7 years 5 years 3 years 6 yearsarrow_forwardA distribution company is considering three different alternatives to satisfy their customer's demands. Their options are to rent a ready distribution center (D01), Rent and mobilize a center (D02), or outsourcing (OS). The estimate for each method is shown. The lifetime for D01, D02, and OS are 3, 6, and 2 respectively. MARR is 0.04 per year, and the percentage of change for all of the cases are 0 % Note: all units are in thousand $ D01 First Cost, $ Annual Operation Cost, $ Salvage Value, $ a: Calculate the Fw of D01? -136 -92 28 D02 OS -973 0 -59 -123 333 0arrow_forwardYou purchased a building five years ago for $200,000. Its annual maintenance expense has been $15,000 per year. At the end of three years, you spent $55,000 on roof repairs. At the end of five years (now), you sell the building for $250,000. During the period of ownership, you rented out the building for $60,000 per year paid at the beginning of each year. If your MARR is 8% per year. a) Use the PW and AW methods to evaluate this investment. b) Calculate IRR and ERR(( Ԑ=MARR). (Upload the picture of your complete solutions including the correct cash flow diagram and your conclusion.)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