EBK CONTEMPORARY ENGINEERING ECONOMICS
EBK CONTEMPORARY ENGINEERING ECONOMICS
6th Edition
ISBN: 9780134123950
Author: Park
Publisher: PEARSON CUSTOM PUB.(CONSIGNMENT)
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Chapter 7, Problem 11P

(a):

To determine

Simple investment and non-simple investment.

(b):

To determine

Calculate rate of return for project A.

(c):

To determine

Plot the present worth.

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Suppose we have four mutually exclusive projects, D1, D2, D3, and D4, whose internal rates of return on incremental investment between the projects is given as follows:IRR (Dl - D2) = 27.62%IRR {Dl - D3) = 14.26%IRR {Dl - D4) = 25.24%IRR (D3 - D2) = 30.24%IRR (D2- D4) = 17.34%IRR (D3 - D4) = 16.14%Which project should be selected at MARR 15%?
A Houston American Cement factory will require an investment of $200 million to construct the cement plant. Delays beyond the anticipated implementation year of 2012 will require additional money to construct the factory. Assuming that the interest rate is 10% per year, compound interest, using both the single payment formula and spread sheet functions, determine the following for the board of directors of the South American company that plans to develop the plant. The equivalent investment needed if the plant is built in 2015. The equivalent investment needed had the plant been constructed in the year 2008.
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