EBK ENGINEERING ECONOMY
17th Edition
ISBN: 9780134838229
Author: Sullivan
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 8, Problem 30P
To determine
Calculate the time period.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Wylie has been offered the choice of receiving $4,700 today or an agreed-upon amount in 1 year. While negotiating the future
amount, Wylie notes that he would be willing to take no less than $5,500 if he has to wait a year. What is his TVOM in %?
%
Carry all interim calculations to 5 decimal places and then round your final answer to 1 decimal place. The tolerance is ±0.2.
Shao Airlines is considering the purchase of two alternative planes. Plane A has an expected life of 5 years, will cost $100 million, and will produce net cash flows of $30 million per year. Plane B has a life of 10 years, will cost $132 million, and will produce net cash flows of $25 million per year. Shao plans to serve the route for only 10 years. Inflation in operating costs, airplane costs, and fares are expected to be zero, and the company's cost of capital is 12%. By how much would the value of the company increase if it accepted the better project (plane)? Do not round intermediate calculations. Enter your answer in millions. For example, an answer of $1.234 million should be entered as 1.234, not 1,234,000. Round your answer to three decimal places.
What is the equivalent annual annuity for each plane? Do not round intermediate calculations. Enter your answers in millions. For example, an answer of $1.234 million should be entered as 1.234, not 1,234,000. Round your answers to…
Required information
A regional infrastructure building and maintenance contractor must decide to buy a new compact horizontal directional
drilling (HDD) machine now, or wait and buy it 2 years from now when a large pipeline contract will require the new
equipment. The HDD machine will include an innovative pipeloader design and a maneuverable undercarriage system.
The cost of the system is $67,300 if purchased now or an estimated $81,300 if purchased 2 years from now.
At i= 12% per year and f= 4% per year, determine if the contractor should buy now or later without any adjustment for inflation.
The contractor should buy the drilling machine (Click to select) v for $
Chapter 8 Solutions
EBK ENGINEERING ECONOMY
Ch. 8 - The seasonal energy efficiency ratio (SEER) is 13...Ch. 8 - Prob. 2PCh. 8 - Prob. 3PCh. 8 - Prob. 4PCh. 8 - Prob. 5PCh. 8 - Prob. 6PCh. 8 - Prob. 7PCh. 8 - Prob. 8PCh. 8 - Prob. 9PCh. 8 - Prob. 10P
Ch. 8 - Prob. 11PCh. 8 - Prob. 12PCh. 8 - Prob. 13PCh. 8 - A commercial building design cost 89/square-foot...Ch. 8 - Prob. 15PCh. 8 - Prob. 16PCh. 8 - Prob. 17PCh. 8 - Prob. 18PCh. 8 - Prob. 19PCh. 8 - Prob. 20PCh. 8 - Prob. 21PCh. 8 - Prob. 22PCh. 8 - Prob. 23PCh. 8 - Prob. 24PCh. 8 - Prob. 25PCh. 8 - Prob. 26PCh. 8 - Prob. 27PCh. 8 - Prob. 28PCh. 8 - Prob. 29PCh. 8 - Prob. 30PCh. 8 - Prob. 31PCh. 8 - Prob. 32PCh. 8 - Prob. 33PCh. 8 - Prob. 34PCh. 8 - Prob. 35PCh. 8 - Prob. 36PCh. 8 - Prob. 37PCh. 8 - Prob. 38PCh. 8 - Prob. 39PCh. 8 - Prob. 40PCh. 8 - Prob. 41PCh. 8 - Prob. 42PCh. 8 - Prob. 43PCh. 8 - Your company manufactures circuit boards and other...Ch. 8 - Prob. 45PCh. 8 - Prob. 46PCh. 8 - Prob. 47PCh. 8 - Prob. 48PCh. 8 - Prob. 49SECh. 8 - Prob. 50SECh. 8 - Prob. 51SECh. 8 - Prob. 52CSCh. 8 - Suppose the cost of electricity is expected to...Ch. 8 - Prob. 54CSCh. 8 - Prob. 55FECh. 8 - Prob. 56FECh. 8 - Prob. 57FECh. 8 - Prob. 58FECh. 8 - Prob. 59FECh. 8 - Prob. 60FECh. 8 - Prob. 61FE
Knowledge Booster
Similar questions
- A vertical oil well has been drilled and completed. The productive zone is between the depths of 2,800 and 2,900 feet, you can assume there is oil in the entire thickness (gross = net). The average porosity is 10%, average water saturation is 20% and the oil formation volume factor is 1.3 RB/Stb. Other reservoirs with similar properties have drainage areas of 40 acres and the recovery factor 10.47305% (it is known with extreme precision!) a) Compute STOIIP and ultimate recovery, using the formals presented in lecture b) This well will also have a gas oil ratio (GOR) of 800 scf/bbl, how much gas is expected to be produced from this well?arrow_forwardAn engineer analyzing cost data about hydrogen sulfide monitors discovered that the information for the first three years was missing. However, he knew the cost in year 4 was $1250 and that it increased by 5% each year thereafter. If the same trend applied to the first three years, the cost in year 1 was:a. $1312.50b. $1190.48c. $1028.38d. $1079.80arrow_forwardBalance of payment data was reported at -878.000 OMR (Millions) in 2020. This records a decrease from the previous number of -539.000 (Millions) OMR for 2019. Balance of payment data is updated yearly, averaging 333.000 (Millions) from December 1996 to 2020, with 25 observations. The data reached an all-time of high of 4,725.000 (Millions) OMR in 2013 and record low of -3,615.000 (Millions) OMR in 2016. Based on the above case study, what suggestions would you like to give to the government to reduce the gap of balance of payment?arrow_forward
- UNIFORM ARITHMETIC GRADIENT. SHOW CASHFLOW DIAGRAM. DO NOT USE EXCEL. A parcel of land in a downtown area, suitable for parking lot, can be leased for a period of 10 years. Initial development costs for clearing, paving and constructing a small office shed on the lot is estimated to be P150,000. If the net annual revenue for the first year is P22,000 and increases by 10% per year thereafter until the tenth year, and the improvements revert to the owner of the land at the end of 10 years, what is the rate of return on the investment?arrow_forwardThe Cornballer, invented by George Bluth in the mid-1970s, is a device used to make cornballs. Itsold for $29.95. Suppose that 10,000 Cornballers were sold in 1981; 11,000 in 1982; and salesincreasing by 10% each year until it was last sold in 1990 (when it was made illegal). Assume aninterest rate of 12% per year. Assume sales were made at EOY. What was the worth of these cashflows in 1980? Show in standard factor notation and show the cash flow diagrams.arrow_forwardA company has invested in machinery that $23,000 to purchase and install and the company purchased a 3 year warranty for $5,000. The warranty covers all maintenance and repairs for three years with no cost to the company. At year 4, the maintenance costs are estimated at $2,000 and will increase by $1,200 per year after that. Operating costs are expected to be $800 every year. The machinery will last nine years. If the interest rate is 6%, what is the machinery's economic life that minimizes the EUAC?arrow_forward
- Beth has a no-annual-fee Visa credit card that charges an APR of 12.5% per year. Interest is compounded monthly. If a payment is missed by even 1 day, the rate jumps to an APR of 24.5% for the remainder of the time she keeps the card or until the total debt is paid off. (This is not an uncommon practice for many banks that issue credit cards when you read the fine print.) The current balance is $2000 and there is a minimum payment of $20.83 per month at the 12.5% rate. Beth decided “enough already”; she decided to stop using the card immediately and pay the balance off as soon as her budget allowed. She realizes that if she misses a payment due date, the minimum will increase to $40.83 per month until the total balance is paid at this higher APR. a. Verify the monthly minimums for both nominal (APR) rates for a balance of $2000. b. If she pays well over the minimum at $40 per month on time, how many months and years will it take to become debt-free of this card? Use an equation and a…arrow_forwardSuppose I develop a new carbonated beverage that has Pomegranate, Orange, Watermelon, Strawberry, and Apple juice. I trademark the name POWSA (to rhyme with YOWSA for an intended marketing campaign about how deliciously refreshing it is... POWSA!!). Then I perfect the tastiest ingredient mix with the essential acronym aligned components... POWSA!! I believe it is possible to get a $10 million annual SOM by selling 10 million cans at $1 each while the cost (at that scale of operation) will be sixty cents per can. However, I need to invest $20 million in the marketing, so I need a VC or angel investor to buy an equity stake for $20 million. I pitch the idea of getting Sugar Ray Leonard to do the ads for that "light-weight-sugar champion" POWSA Punch element of the marketing campaign. I claim the ad campaign with Sugar Ray would be effective with the $20 million budget. Now suppose Warren Buffet agrees with all my numbers and also has a 10% opportunity cost of capital (he believes the $20…arrow_forward6.33 Liquid Sleeve, Inc. is a company that makes a sealing solution for machine shaft surfaces that have been compromised by abrasion, high pres- sures, or inadequate lubrication. The manager is considering adding a metal-based nanoparticle (Type Al or Fe) to its solution to increase the prod- uct's performance at high temperatures. The costs associated with each type are estimated. If the company's MARR is 20% per year, which nanopar- ticle type should the company select? Utilize a rate of return analysis. Туре Fe Туре Al First cost, $ - 150,000 -280,000 Annual operating cost, S/year -92,000 -74,000 Salvage value, $ 30,000 70,000 Life, years 2 4arrow_forward
- The Generic Genetic (GG) Corporation pays no cash dividends currently and is not expected to for the next four years. Its latest EPS was $5.80, all of which was reinvested in the company. The firm's expected ROE for the next four years is 24% per year, during which time it is expected to continue to reinvest all of its earnings. Starting in year 5, the firm's ROE on new investments is expected to fall to 23% per year. GG's market capitalization rate is 23% per year. a. What is your estimate of GG's intrinsic value per share? (Round your answer to 2 decimal places.) GG's intrinsic value b. Assuming its current market price is equal to its intrinsic value, what do you expect to happen to its price over the next year? Price should at a rate of % over the next year.arrow_forwardRestoring balance to the nitrogen cycle is one of the challenges facing engineers. Improving the effectiveness and economical use of fertilizer has been identified as an important step in the right direction. Engineers have designed an improved way to transport fertilizer and then to apply it directly at the point where crops are grown. Further development, assessment, and optimization of the necessary equipment is estimated to require $220,000 in year 1, increasing by a gradient of $80,000 in each of years 2, 3, and 4. Then, it will begin to decrease by $95,000 in years 5, 6, 7, and 8. Interest is 14% per year. Part c What gradient series, beginning with the $220,000 in year 1 is equivalent to these cash flows? Click here to access the TVM Factor Table calculator.arrow_forwardThe packing cooling tower that cools condensing water for a power plant progressively detcriorates and results in gradually rising costs due to reduced plant efficiency. These costs are treated as lump sums at the end of the year, as showm in Fig 3:6-The cost is zero for the first year and then increases $1000 per year until the packing is 16 years old, when replacement is mandatory. At a point 8 years into the life of the packing (just aſter the $7000. annual cost has been assessed), a decision is to be made on the plan for the next 8 years i.e., whether to replace the packing or to continue with the existing packing. Money can be borrowed at 9 percent interest, compounded annually. What is the maxinmum amount that could be paid for the packing in order to justify its replacement ?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:PEARSON
Engineering 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 Learning
Managerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage Learning
Managerial 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