Chapter 8, Problem 2P

custom-designed home, FD, the prime contractor, realized he was not going to make the big profit that he had anticipated due to the many unique features of the home for which he had not correctly estimated the cost to the owners. The contract was fixed-price with no more than 10% override on the total cost. As time proceeded, FD took the choices of the owners on appliances, finishing work on the floors and walls, and many other features and purchased look-alike substitutes from questionable-quality, internationallybased manufacturers and vendors. After living in the house for only 3 years, the owners were so disappointed with the quality of work that they decided to bring a law suit against FD and his company for breach of contract. However, they needed sound reasons upon which to base their legal claims against FD, were the case to go to court. One of the owners, being an engineer, decided to consult the Code of Ethics for Engineers to gain insight into what may be substantial…

The Sundance Detective Agency has purchased new surveillance equipment with the following estimates. The year index is k= 1, 2, 3, ... First cost = $1200 Annual maintenance cost = $75 + 5k Extra annual revenue = $250 + 50k Salvage value = $750 for all years Calculate the payback period to make a return of 10% per year. The payback period to make a return of 10% per year is years.

A small company heats its building and spends $8,800 per year on natural gas for this purpose. Cost increases of natural gas are expected to be 9% per year starting one year from now (i.e., the first cash flow is $9,592 at EOY one). Their maintenance on the gas furnace is $355 per year, and this expense is expected to increase by 12% per year starting one year from now (i.e. the first cash flow for this expense is $397.60 at the EOY one). If the planning horizon is 14 years, what is the total annual equivalent expense for operating and maintaining the furnace? The interest rate is 15% per year. Click the icon to view the interest and annuity table for discrete compounding when /- 0% per year. Click the icon to view the interest and annuity table for discrete compounding when /-12% per year. Click the icon to view the interest and annuity table for discrete compounding when / 15% per year. CORD The total annual equivalent expense for operating and maintaining the fumace is $thousands…

A corn refining company produces corn gluten cattle feed at a variable cost of ​$83  per ton. If fixed costs are ​$130,000 per month and the feed sells for ​$134 per​ ton, how many tons should be sold each month to have a monthly profit of ​$55​0,000?

Adams Manufacturing spent $30,000 on a new sterilization conveyor belt, which resulted in a cost savings of $4202 per year. The length of time it should take to recover the investment at 8% per year is closest to: (a) Less than 6 years (b) 7 years (c) 9 years (d) 11 years

A company that manufactures brushes blowers invested $650,000 in an automated quality controlsystem for blower housings. The resultant savings was $160,000 per year for 5 years. If the equipmenthad a salvage value of $50,000, what rate of return per year did the company make? (Initial guess i = 5%)

Calculate the annual worth of a machine that has an initial cost of $35,000, a life of 10 years, and an annual operating cost of $10,000 for the first 4 years, increasing by 1000 per year hereafter. Use an interest rate of 15% per year.

An engineer borrowed P1,000,000 to start a business with an interest rate of 13% per year. The term of the loan is 5 years and payment will start 3 years from now. Determine the equal yearly payment. show solution/formula.

The price of a car you want is $42,000 today. Its price is expected to increase by $1000 each year. You now have $25,000 in an investment account, which is earning 10% per year. How many years will it be before you have enough to buy the car without borrowing any money? Solve by (a) trial and error, and (b) by spreadsheet.