Contemporary Engineering Economics (6th Edition)
6th Edition
ISBN: 9780134105598
Author: Chan S. Park
Publisher: PEARSON
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Chapter 7, Problem 56P
To determine
Calculate the present value.
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You are considering two types of automobiles. Model A costs $18,000, andModel B costs $15,624.Although the two models are essentially the same, Model A can be sold for $9,000 after four years of use while Model B can be sold for $6,500 after the same amount of time. Model A commands a better resale value because its styling is popular among young college students. Determine the rate of return on the incremental investment of $2,376. For what range of values of your MARR is Model A preferable?
❖ Problem 1
Using Microsoft Excel, create an investment cash-flow diagram that will have a present worth of
zero using MARR = 12.75%. The study period needs to be exactly 10 years and each year should
have at least one unique cash flow that is different from the cash flows over the other years. Your
answer should contain a table showing the cash flows for each year and a graphical representation
of the cash flows (cash-flow diagram).
Projects A and B are mutually exclusive. The minimum attractive rate of return (MARR) is 12%.
Using rate of return analysis, which project should be selected?
If the image fails to load here, go to https://www.dropbox.com/s/ld6wctqieu8jgwp/ROR.jpg >>
Year
0
A
B
- $750
- $1,150
B-A
- $400
123
$200
$300
$100
$200
$350
$150
$200
$400
$200
4
$600
$700
$100
ROR
17.68%
16.44%
13.69%
Project A
Project B
Both Project A and B
Select none of the project.
Insufficient information to make a decision.
Chapter 7 Solutions
Contemporary Engineering Economics (6th Edition)
Ch. 7 - Prob. 1PCh. 7 - Prob. 2PCh. 7 - Prob. 3PCh. 7 - Prob. 4PCh. 7 - Prob. 5PCh. 7 - Prob. 6PCh. 7 - Prob. 7PCh. 7 - Prob. 8PCh. 7 - Prob. 9PCh. 7 - Prob. 10P
Ch. 7 - Prob. 11PCh. 7 - Prob. 12PCh. 7 - Prob. 13PCh. 7 - Prob. 14PCh. 7 - Consider an investment project with the cash flows...Ch. 7 - Consider the investment projects given in Table...Ch. 7 - Prob. 17PCh. 7 - Prob. 18PCh. 7 - Consider the investment projects given in Table...Ch. 7 - Consider the investment projects given in Table...Ch. 7 - Prob. 21PCh. 7 - Prob. 22PCh. 7 - Consider the investment projects given in Table...Ch. 7 - Prob. 24PCh. 7 - Prob. 25PCh. 7 - Prob. 26PCh. 7 - Prob. 27PCh. 7 - Prob. 28PCh. 7 - Prob. 29PCh. 7 - Prob. 30PCh. 7 - Prob. 31PCh. 7 - Prob. 32PCh. 7 - Prob. 33PCh. 7 - Prob. 34PCh. 7 - Prob. 35PCh. 7 - Prob. 36PCh. 7 - Prob. 37PCh. 7 - Prob. 38PCh. 7 - Prob. 39PCh. 7 - Prob. 40PCh. 7 - Prob. 41PCh. 7 - Prob. 42PCh. 7 - Consider the two mutually exclusive investment...Ch. 7 - You are considering two types of automobiles....Ch. 7 - Prob. 45PCh. 7 - Prob. 46PCh. 7 - Fulton National Hospital is reviewing ways of...Ch. 7 - Prob. 48PCh. 7 - Consider the investment projects given in Table...Ch. 7 - Prob. 50PCh. 7 - Prob. 51PCh. 7 - Prob. 52PCh. 7 - Prob. 53PCh. 7 - Prob. 54PCh. 7 - Prob. 55PCh. 7 - Prob. 56PCh. 7 - Prob. 57PCh. 7 - Prob. 1STCh. 7 - Prob. 2STCh. 7 - Prob. 3STCh. 7 - Prob. 4STCh. 7 - Prob. 5ST
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