ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
expand_more
expand_more
format_list_bulleted
Question
Chapter 6, Problem 48P
To determine
The Equivalent Annual Worth among the given three route 105,205,305.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
It is proposed to place a cable on an existing pole line along the shore of a lake to connect two points on opposite sides. Which is more economical? Use future worth method and present worth method.
Need AsapIllustrate the cashflow diagram and compute for the payback period for a project with the following characteristics, if the minimum attractive rate of return (MARR) is 10%?
First Cost $20,000
Annual Benefits $8,000
Annual Maintenance $2,000 in year, then increasing by $500 per year
Salvage Value $2,000
Useful Life10 years
A dyeing and finishing plant is interested in acquiring a dyeing machine for the production of a new product. Three alternatives are being considered assummarized below. Which alternative should be recommended if the plant’sMARR (hurdle rate) is 15% per year using (a) the IRR method and (b) the annual worth method?
Chapter 6 Solutions
ENGR.ECONOMIC ANALYSIS
Ch. 6 - Prob. 1QTCCh. 6 - Prob. 2QTCCh. 6 - Prob. 3QTCCh. 6 - Prob. 4QTCCh. 6 - Prob. 5QTCCh. 6 - Prob. 1PCh. 6 - Prob. 2PCh. 6 - Prob. 3PCh. 6 - Prob. 4PCh. 6 - Prob. 5P
Ch. 6 - Prob. 6PCh. 6 - Prob. 7PCh. 6 - Prob. 8PCh. 6 - Prob. 9PCh. 6 - Prob. 10PCh. 6 - Prob. 11PCh. 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 - 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. 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 - Prob. 67PCh. 6 - Prob. 68PCh. 6 - Prob. 69PCh. 6 - Prob. 70PCh. 6 - Prob. 71PCh. 6 - Prob. 72PCh. 6 - Prob. 73PCh. 6 - Prob. 74PCh. 6 - Prob. 75PCh. 6 - Prob. 76PCh. 6 - Prob. 77P
Knowledge Booster
Similar questions
- USE PRESENT WORTH. Show complete solution and cash flow diagram There is a continuing requirement for stand by electrical power at a public utilityservice facility. Alternative A involves an initial cost of $72,000, a 3-year useful life.and an annual cost of $2,200 the first year and increasing $300 per year thereafterand a net salvage value of $8,400 at the end of the useful life. Alternative B has aninitial cost of $90,000. a six-year useful life, and annual cost of 2,100 and a netsalvage value of $13,000. The current interest rate is 10% annually. Whatalternative are you going to recommend if you use the repeatability (studyperiod is 6 years) and co terminated (study period is 3 years, epsilon = 10%) assumptions?arrow_forwardQuestions: A.) Future worth of Alternative A, B, C & D B.) Using the future worth method, which Alternative should be chosen? C.) Annual worth of Alternative A, B, C, & D D.) Using Annual worth method, which alternative should be chosen?arrow_forwardAn electric cooperative is considering the use of a concrete electric pole in the expansion of its powerdistribution lines. A concrete pole costs 18,000 each and will last 20 years. The company is presentlyusing creosoted wooden poles which cost 12,000 per pole and will last 10 years. If money is worth 12percent, which pole should be used? Assume annual taxes amount to 1 percent of the first cost and zerosalvage value in both cases. Determine the best alternative using: (i = 12%)a. Annual Cost (AC) Methodb. Equivalent Uniform Annual Cost (EUAC) Methodc. Present Worth Cost (PWC) Methodarrow_forward
- A concrete pavement on a street would cost P 2M and would lasts for 5 years. Minor maintenance cost is P 50,000 per year. At the end of each 5 years, P 100,000 would be spent to remove the old surface before P 1M is spent again to lay a new surface. Find the capitalized cost of the pavement at 6%. Select one: a. P 6.28 M b. P6.09M c. P 6.74 M d. P 6.82 Marrow_forwardA factory needs to increase its facilities and study two alternatives:Alternative 1: Construction of a reinforced concrete shed at a price of $5 million and a useful life of 40 years. The demolition cost $200,000 and its annual maintenance cost is $100,000.Alternative 2: Construction of a masonry shed at a cost of $3 million and a useful life of 40 years with an expected renovation of $2 million at the end of 20 years and a salvage value of $100,000. The annual maintenance cost is $150,000.Considering a TMAR of 20% per year, what is the best alternative?arrow_forwardA one-mile section of a roadway in Florida has been washed out by heavy rainfall. The county is considering two options for rebuilding the road. Pertinent data are presented below. If the county's MARR for this type of project is 9% per year, which replacement option should be chosen? Assume repeatability. 1) The equivalent uniform annual cost for the asphalt option is $ ? 2) The equivalent uniform annual cost for the concrete option is $ ? 3) Select the ? option.arrow_forward
- An economic evaluation of the following mutually exclusive alternatives is being conducted. Since they have different service lives, repeatability is assumed and an analysis period of 18 years is used. The MARR is 12%. Alternative A Alternative B Initial cost $40,000 $120,000 Annual revenues $25,000 $40,000 Service life (years) 6 9 Answer the following two questions: (1) The net AW of Alternative A over the analysis period is (select the closest value) A.$34,729 B.$19,483 C.$8,448 D.$15,271 (2) The net PW of Alternative A over the analysis period is (select the closest value) A.$61,242 B.$141,242 C.$110,710 D.$62,785arrow_forwardUsing exactly the same information from Problem No. 1 above, calculate the Annual Worth of Project X at 8% per year interest rate. You can see the data in picture 1, please answer this problem asap. Thank you for your help.arrow_forwardThe Logan Well Services Group is considering two sites for storage and recovery of reclaimed water. The mountain site (MS) will use injection wells that cost $4.2 million to develop and $280,000 per year for M&O. This site will be able to accommodate 150 million gallons per year. The valley site (VS) will involve recharge basins that cost $11 million to construct and $400,000 per year to operate and maintain. At this site, 720 million gallons can be injected each year. If the value of the injected water is $3.00 per thousand gallons, which alternative, if either, should be selected according to the B/C ratio method? Use an interest rate of 8% per year and a 20-year study period. The B/C ratio is . Select alternative (Click to select) neither of the alternatives mountain site valley site .arrow_forward
- ■Consider the following four mutually exclusive alternatives, each with a 10-yr life. X Y Z $4,000 $1,500 $750 710 300 167.5 Cost If the MARR is 10%, which alternative should be selected? Solve the problem by using: Uniform annual benefit a) The payback period b) Benefit-cost ratio analysisarrow_forwardBased on the information below, determine if an annual revenue of $5,000 is large enough to cover both the capital and operating costs? P=$20,000, S=$4000, AOC=$500, n=5 years and i=10%arrow_forwarda company is considering the purchase of a new Lathe, where there are 3 alternative Lathes with brands D, E and F with economic value for each Lathe as follows; Lathe Machine D Lathe Machine E Lathe Machine F Initial Cost (Million Rp) 530 540 480 Maintenance Cost (MillionRp) 90 80 100 Residual Value (Million Rp) 60 130 80 Operating Life 10 10 10 Question: Do a Present Worth Analysis to be able to determine the Alternative chosen from the three Generators with MARR = 13%?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Managerial Economics: Applications, Strategies an...EconomicsISBN:9781305506381Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. HarrisPublisher:Cengage Learning
Managerial Economics: Applications, Strategies an...
Economics
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:Cengage Learning