ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Question
Chapter 8, Problem 16P
(a)
To determine
To construct:A choice table for interest tables from 0% to 100%.
(b)
To determine
To select:The best alternative at 7% MARR.
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Given the data for three different alternatives in the table below, determine the best alternative using the incremental rate of return (∆RoR) analysis. MARR =9%.
A B C
First cost $15,000 $25,000 $20,000
O &M Cost/ year 1,600 400 900
Benefit/year 8,000 13,000 9,000
Salvage value 3,000 6,000 4,600
Life in years 4 4 4
1. The better alternative between the first increment is ________________.
A. Alt. A or Alt. B B. Alt. A C. Alt.C D. Alt. B
2. The better alternative between the second increment is ___________________.
A. Alt. B or Alt. C B. Alt. B C. Alt. C D. Alt. A
A certain brand of Cheddar Cheese can be manufactured with two different processes. Costs associated with each process are shown below. Minimum acceptable rate of return is 10%.What is the present worth of Process B over 10 years?
A design change being considered by Mayberry, Inc., will cost $6,000 and will result in an annual savings of $1,000 per year for the 6-year life of the project. A cost of $2,000 will be avoided at the end of the project as a result of the change. MARR is 8%/yr. Solve, a. What is the internal rate of return of this investment? b. What is the decision rule for judging the attractiveness of investments based on internal rate of return? c. Should Mayberry implement the design change?
Chapter 8 Solutions
ENGR.ECONOMIC ANALYSIS
Ch. 8 - Prob. 1QTCCh. 8 - Prob. 2QTCCh. 8 - Prob. 3QTCCh. 8 - Prob. 4QTCCh. 8 - Prob. 5QTCCh. 8 - Prob. 1PCh. 8 - Prob. 2PCh. 8 - Prob. 3PCh. 8 - Prob. 4PCh. 8 - Prob. 5P
Ch. 8 - Prob. 6PCh. 8 - Prob. 7PCh. 8 - Prob. 8PCh. 8 - Prob. 9PCh. 8 - Prob. 10PCh. 8 - Prob. 11PCh. 8 - Prob. 12PCh. 8 - Prob. 13PCh. 8 - Prob. 14PCh. 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 - Prob. 44PCh. 8 - Prob. 45P
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