ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Question
Chapter 8, Problem 28P
(a)
To determine
To construct:A choice table for interest tables from 0% to 100%
(b)
To determine
To select:The best alternative at MARR of 12%
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You are being asked to select a piece of machinery for the company you work for.
Operating costs are an important criteria when selecting what machinery would be
the best choice.
What is the EUAW (Equivalent Uniform Annual Worth) of this investment that
costs $59,900, has annual benefits of $8,343/year, annual costs of $2,450/year,
and a disposal cost of $4,300 at the end of its useful life? It has a useful life of 12
years. Use a 10% MARR.
Two numerically controlled drill presses are being considered by the production department of Zunni's Manufacturing; one must be
selected. Comparison data is shown in the table below. MARR is 10%/year.
Drill Press T Drill Press M
Click here to access the TVM Factor Table Calculator
Part a
* Your answer is incorrect.
Initial Investment
Estimated Life
Estimated Salvage Value
Annual Operating Cost
Annual Maintenance Cost
What is the future worth of each drill press?
Drill Press T: $
Drill Press M: $
40000
60000
$20,000
10 years
$5,000
$12,000
$2,000
$30,000
10 years
$7,000
$6,000
$4,000
Carry all interim calculations to 5 decimal places and then round your final answer to the nearest dollar. The tolerance is ±20.
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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