Contemporary Engineering Economics (6th Edition)
6th Edition
ISBN: 9780134105598
Author: Chan S. Park
Publisher: PEARSON
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Chapter 5, Problem 57P
To determine
Calculate the present worth.
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Problem 11.017 Economic Service Life A piece of equipment has a first cost of $180,000, a maximum useful life of 7
years, and a market (salvage) value described by the relation S = 120,000 - 11,000k, where k is the number of years
since it was purchased. The salvage value cannot go below zero. The AOC series is estimated using AOC
= 60,000+8,000k. The interest rate is 11% per year. Determine the economic service life and the respective AW. The
economic service life is year(s) and the AW value is $
A)Two options of feed-water storage installation are being considered to serve over 20 years
of useful life:
Option 1: Build a 20,000-gallon tank on a tower. The cost of installing the tank and tower
is estimated to be $170,000. The annual operating and maintenance cost after tax
adjustment is estimated to be $2,000. The salvage value is estimated to be negligible.
Option 2: Place a 20,000-gallon tank of equal capacity on a hill near the refinery. The cost
of installing the tank on the hill, including the extra length of service lines, is estimated to
be $120,000 with negligible salvage value. The annual operating and maintenance cost of
the water tank is estimated to be $1,500 after tax adjustment. Because of the location, an
additional investment of 13,000 in pumping equipment is required. The pumping
equipment is expected to have a service life of 10 years with a salvage value of $2,000 at
the end of that time. The annual operating and maintenance cost (including any incometax…
Compute the AW (annual worth) of The Bella. Remember to include your calculations in your supporting work.
Round your answer to the nearest dollar.
Chapter 5 Solutions
Contemporary Engineering Economics (6th Edition)
Ch. 5 - Prob. 1PCh. 5 - Prob. 2PCh. 5 - If a project costs 100,000 and is expected to...Ch. 5 - Refer to Problem 5.2, and answer the following...Ch. 5 - Prob. 5PCh. 5 - Prob. 6PCh. 5 - Prob. 7PCh. 5 - Prob. 8PCh. 5 - Consider the cash flows from an investment...Ch. 5 - Prob. 10P
Ch. 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 - Consider the project balances in Table P5.19 for a...Ch. 5 - Your RD group has developed and tested a computer...Ch. 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. 30PCh. 5 - Prob. 31PCh. 5 - Prob. 32PCh. 5 - Geo-Star Manufacturing Company is considering a...Ch. 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 - Two methods of carrying away surface runoff water...Ch. 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. 1STCh. 5 - Prob. 2ST
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