ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Question
Chapter 8, Problem 6P
(a)
To determine
To construct:A choice table for interest tables from 0% to 100% based on EUAC or EAUW
(b)
To determine
To select:The best alternative at 15 % MARR.
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A PlayStation is advertised for $500. A credit plan is offered whereby a deposit of 20% may be paid. The rest is to be paid in equal monthly instalments over 2 years at a flat interest rate of 16% per annum. A customer chooses the
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I SEON SPOM
SEOM SERON
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(c) (i) How many repayments will there be? FENOMEEN
ENON SEPON SENOM SEDOM SESON SEDON SETOM SEDON SERVE
to be? 60 60 60 6 6 6 6 6 6 6
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BO
Answer: $
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(d) How much will be paid in total for the PlayStation? OXO OXO OXO OX
Answer: $
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Jean believes the batteries can be expected to last only for the
guarantee period. She does not want to invest extra money in a
battery unless she can expect a 40% rate of return. If she plans to
keep her present car another 2 years, which battery should she buy?
Two investment opportunities are as follows:
A B
First cost
$200 $100
Uniform annual benefit
25
20
End-of-useful-life salvage value 45
Useful life, in years
15
10
At the end of 10 years, Alt. B is not replaced. Thus, the comparison is
15 years of A versus 10 years of B. If the MARR is 8%, which
alternative should be selected?
QZY, Inc. is evaluating new widget machines offered by three companies. The chosen machine will be used for 3 years. a) Construct a choice table for interest rates from 0% to 100%. B) MARR = 15%. From which company if any should you buy the widget machine? Use rate of return analysis.
A
B
C
First cost
$15,000
$25,000
$20,000
Maintenance and operating
1,600
400
900
Annual benefits
8,000
13,000
9,000
Salvage value
3,000
6,000
4,500
a) Construct a choice table for interest rates from 0% to 100%
b) MARR = 15%. From which company if any should you buy the widget machine? Use rate of return analysis
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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