Basics Of Engineering Economy
2nd Edition
ISBN: 9780073376356
Author: Leland Blank, Anthony Tarquin
Publisher: MCGRAW-HILL HIGHER EDUCATION
expand_more
expand_more
format_list_bulleted
Question
Chapter 6, Problem 54P
(a):
To determine
Identify the number of i* values.
(b):
To determine
Calculation of
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
Harley worked for many years to save enough money to start his own residential landscape design business. The net cash flows shown are those he recorded for the first 6 years as his own boss. Find the external rate of return using the modified rate of return approach with a reinvestment rate of 15% per year and a borrowing rate of 8%. Additionally, after using the procedure, use the MIRR function to confirm your answer.
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.
The State of Chiapas, Mexico, decided to fund a program for literacy. The first cost of $300,000 now and an updated budget of $145,000 every 7 years forever is requested. Determine the perpetual equivalent annual cost at an interest rate of 10% per year.
The perpetual equivalent annual cost 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
Knowledge Booster
Similar questions
- A secondary road in a developing country, 20 km long is to be improved by surface treating the gravel surface without any change in length. The cost of improvement is estimated at $150,000 per km (specifically, $80,000 per km at the beginning of year 1 and $70,000 per km at the beginning of year 2). Present annual transport costs (vehicle operating costs and maintenance costs, etc.) for all traffic on the existing road is estimated at $210,000 per km per annum. During the 2-year treatment, all traffic need to detour. The detour may cause a higher network-wide cost (transport cost and management cost) which is estimated to be $7,500,000 per annum in total. After improvement, this is expected to reduce to $150,000 per km per annum. If Minimum Attractive Rate of Return is 8% and project life is 20 years after reconstruction with zero salvage value. Resurfacing will be required 10 years after reconstruction at a costs of 50,000 per km. Use the B/C ratio method to determine whether the…arrow_forwardA small construction company has $100,000 set aside in a capital improvement fund to purchase new equipment. If $30,000 is invested at 30%, $20,000 at 25%, and the remaining $50,000 at 20% per year, what is the overall rate of return on the entire $100,000?arrow_forwardAn investment of $60,000 ten years ago resulted in uniform income of $10,000 per year for the 10-year period. The rate of return on the investment was closest to: (a) 10.6% per year (b) 14.2% per year (c) 16.4% per year (d) 18.6% per yeararrow_forward
- In order to provide drinking water as part of its 50-year plan, a west coast city is considering constructing a pipeline for importing water from a nearby community that has a plentiful supply of brackish ground water. A full-sized pipeline can be constructed at a cost of $122 million now. Alternatively, a smaller pipeline can be constructed now for $80 million and enlarged 20 years from now for another $100 million. The pumping cost will be $25,000 per year higher for the smaller pipeline during the first 20 years, but will be approximately the same thereafter. Both pipelines are expected to have the same useful life with no salvage value. (a) At an interest rate of 6% per year, which alternative is more economical? (b) Write the spreadsheet function to display the PW for the smaller pipeline alternative.arrow_forwardWhat is meant by the term equal service alternative?arrow_forwardAero Serve, Inc. manufactures cleaning nozzles for reverse pulse jet dust collectors. The company spent $40,000 on a production control system that will increase profits by $11,096 per year for 5 years. The rate of return per year on the investment is closest to: (a) 20% (b) 16% (c) 12% (d) Less than 11%arrow_forward
- Dilute hydrogen peroxide (H2O2) is produced in the facility where you work as an engineer. company customer to invest in an additional concentration unit for the production of concentrated hydrogen peroxide (H2O2) in line with the demands of aims. For the establishment of the required unit, the finance company recommends the following financing model for 3 years: First year installments of 100,000 TL per month, 150,000 TL per month in the second year and 175,000 TL per month in the third year. Also at 36 MonthsAn additional balloon payment of 700.000 TL will be made. The monthly interest rate is 2.5%. a) If this proposed financing model was not chosen and all installments were paid equally, equal monthly installments. What would the amount be? b) If no payment was made for this additional concentration facility for 3 years, and at the end of the 3rd year, one-time payment. If so, what would be the amount to be paid? Find what is required by drawing cash flow charts.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_forwardIn order to provide drinking water as part of its 50-year plan, a west coast city is considering constructing a pipeline for importing water from a nearby community that has a plentiful supply of brackish ground water. A full-sized pipeline can be constructed at a cost of $125 million now. Alternatively, a smaller pipeline can be constructed now for $85 million and enlarged 20 years from now for another $90 million. The pumping cost will be $25,000 per year higher for the smaller pipeline during the first 20 years, but it will be approximately the same thereafter. Both pipelines are expected to have the same useful life with no salvage value At an interest rate of 11% per year The present worth of the full-sized pipeline is determined to be what and that of the small-sized pipeline is what Which pipeline is the most economical pipelinearrow_forward
- A 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_forwardIdentify at least three noneconomic attributes that may be used as evaluation criteria in the decisionmaking process.arrow_forwardThe 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_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:PEARSONEngineering 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 LearningManagerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage LearningManagerial 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