ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Question
Chapter 5, Problem 26P
To determine
To find: The best alternative out of the two alternatives A and B.
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Students have asked these similar questions
A former student of an engineering department wishes to donate to the
department's scholarship fund. Three options are available:
Plan A: $60,000 now
Plan B: $15,000 per year for 8 years beginning year 1 from now
Plan C: $50,000 three years from now and another $80,000, five years from
now.
From the department's perspective, it wants to select the plan that
maximizes the buying power of the dollars received. The department head
asked the engineering professor evaluating the plans to account for inflation
in the calculations. If the donation earns a real 10% per year and the
inflation rate is expected to average 3% per year, which plan should be
accepted?
O B
The payback period analysis is not the best decision making method for high tech industry as the method chooses the best choice based on how fast an investment can
be recovered.
O True
O False
Which is the most efficient analysis method we can use for determining project acceptability on an economic basis?
Chapter 5 Solutions
ENGR.ECONOMIC ANALYSIS
Ch. 5 - Prob. 1QTCCh. 5 - Prob. 2QTCCh. 5 - Prob. 3QTCCh. 5 - Prob. 1PCh. 5 - Prob. 2PCh. 5 - Prob. 3PCh. 5 - Prob. 4PCh. 5 - Prob. 5PCh. 5 - Prob. 6PCh. 5 - Prob. 7P
Ch. 5 - Prob. 8PCh. 5 - Prob. 9PCh. 5 - Prob. 10PCh. 5 - Prob. 11PCh. 5 - Prob. 12PCh. 5 - Prob. 13PCh. 5 - Prob. 14PCh. 5 - Prob. 15PCh. 5 - Prob. 16PCh. 5 - Prob. 17PCh. 5 - Prob. 18PCh. 5 - Prob. 19PCh. 5 - Prob. 20PCh. 5 - Prob. 21PCh. 5 - Prob. 22PCh. 5 - Prob. 23PCh. 5 - Prob. 24PCh. 5 - Prob. 25PCh. 5 - Prob. 26PCh. 5 - Prob. 27PCh. 5 - Prob. 28PCh. 5 - Prob. 29PCh. 5 - Prob. 31PCh. 5 - Prob. 32PCh. 5 - Prob. 33PCh. 5 - Prob. 34PCh. 5 - Prob. 35PCh. 5 - Prob. 36PCh. 5 - Prob. 37PCh. 5 - Prob. 38PCh. 5 - Prob. 39PCh. 5 - Prob. 40PCh. 5 - Prob. 41PCh. 5 - Prob. 42PCh. 5 - Prob. 43PCh. 5 - Prob. 44PCh. 5 - Prob. 45PCh. 5 - Prob. 46PCh. 5 - Prob. 47PCh. 5 - Prob. 48PCh. 5 - Prob. 49PCh. 5 - Prob. 50PCh. 5 - Prob. 51PCh. 5 - Prob. 52PCh. 5 - Prob. 53PCh. 5 - Prob. 54PCh. 5 - Prob. 55PCh. 5 - Prob. 56PCh. 5 - Prob. 57PCh. 5 - Prob. 58PCh. 5 - Prob. 59PCh. 5 - Prob. 60PCh. 5 - Prob. 61PCh. 5 - Prob. 62PCh. 5 - Prob. 63PCh. 5 - Prob. 64PCh. 5 - Prob. 65PCh. 5 - Prob. 66PCh. 5 - Prob. 67PCh. 5 - Prob. 68PCh. 5 - Prob. 69PCh. 5 - Prob. 70PCh. 5 - Prob. 71PCh. 5 - Prob. 72PCh. 5 - Prob. 73PCh. 5 - Prob. 74PCh. 5 - Prob. 75PCh. 5 - Prob. 76PCh. 5 - Prob. 77PCh. 5 - Prob. 78PCh. 5 - Prob. 79PCh. 5 - Prob. 80PCh. 5 - Prob. 81PCh. 5 - Prob. 82PCh. 5 - Prob. 83PCh. 5 - Prob. 84PCh. 5 - Prob. 85PCh. 5 - Prob. 86PCh. 5 - Prob. 87PCh. 5 - Prob. 88PCh. 5 - Prob. 89PCh. 5 - Prob. 90PCh. 5 - Prob. 91PCh. 5 - Prob. 92PCh. 5 - Prob. 93PCh. 5 - Prob. 94PCh. 5 - Prob. 95PCh. 5 - Prob. 96PCh. 5 - Prob. 97PCh. 5 - Prob. 98PCh. 5 - Prob. 99PCh. 5 - Prob. 100PCh. 5 - Prob. 101P
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Similar questions
- When conducting an ROR analysis of mutually exclusive cost alternatives: (a) All of the projects must be compared against the do-nothing alternative (b) More than one project may be selected (c) An incremental investment analysis is necessary to identify the best one (d) The project with the highest incremental ROR should be selectedarrow_forwardWhy do most of the engineers and financial managers prefer rate-of-return analysis to the PW method?arrow_forwardFor each of the following problems, (a) draw the cash flow diagram; (b) present clean and clear manual solutions to the problem; (c) highlight the final answer (only the final answer as required by the problem) by enclosing it within a box. The cost of constructing a roundabout (R/A) in a low-traffic residential neighborhood 5 years ago was $625,000. A civil engineer designing another R/A that is almost the same design estimates the cost today will be $940,000. Determine the inflation rate if the real interest rate is 4% no excelarrow_forward
- An alumni of CSUN's engineering department would like to donate to the department's scholarship fund. Three options are available: Plan A. $60,000 now. Plan B. $15,000 per year for 8 years beginning 1 year from now. Plan C. $50,000 three years from now and another $80,000, five years from now. The department want to select the plan that maximizes the buying power of the dollars received, and to account for inflation in the calculations. If the donation earns a real 10% per year and the inflation rate is expected to average 3% per year, which plan should be accepted?arrow_forwardWhy is an incremental analysis necessary when conducting a rate of return evaluation of cost alternatives?arrow_forwardWhen evaluating projects by the present worth method, how do you know which one(s) to select, if the (a) projects are independent, and (b) alternatives are mutually exclusive?arrow_forward
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