ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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- An integrated, combined cycle power plant produces 280 MW of electricity by gasifying coal. The capital investment for the plant is $690 million, spread evenly over two years. The operating life of the plant is expected to be 17 years. Additionally, the plant will operate at full capacity 78% of the time (downtime is 22% of any given year). The MARR is 5% per year. a. If this plant will make a profit of three cents per kilowatt-hour of electricity sold to the power grid, what is the simple payback period of the plant? Is it a low-risk venture? b. What is the IRR for the plant? Is it profitable? Oarrow_forwardMaintenance expenses for a bridge on the Ohio River are estimated to be $25,000 per year for the first 6 years, followed by three seprate $100,000 expenditures in years 12, 15, and 18 . The expected life of the bridge is 50 years , if i = 7% per year, what is the equivalent uniform annual expenses over the entire 50-year period? a) S-16,622 b) $-15,368.03 c) $ -14,725.52 d) None of the abovearrow_forwardQuestion Number 5 You will deposit money into a bank account according to the following schedule: Today 4 year from today 6 years from today 8 years from today 12 years from today $182,000 $78,000 $136,000 $115,000 $94,000 After 12 years from today, what will be the purchasing power of the money in your bank account, expressed in today's dollars?. You bank pays interest at 7.000% per year, compounded annually. Inflation is expected to be 4.520% per year.arrow_forward
- 3) Find the rate of return (IRR-Ch16.3) on a project that will cost $100,000 today and $400,000 in 3 years from today, BUT will return $50,000 at the end of every year for 11 years (4)arrow_forwardProblem 03.013- Annual worth calculations What is the equivalent annual cost in years 1 through 9.00 of a contract that has a first cost of $77,000 in year 0 and annual costs of $17,000 in years 3 through 9.00? Use an interest rate of 15.00% per year. (Round the final answer to three decimal places.) The equivalent annual cost is determined to be $ Iarrow_forwardThe city of Oak Ridge is considering the construction of a three kilometer (km) greenway walking trail. It will cost $1,000 per km to build the trail and $320 per km per year to maintain it over its 23-year life. If the city's MARR is 10% per year, what is the equivalent uniform annual cost of this project? Assume the trail has no residual value at the end of 23 years.arrow_forward
- Problem 03.015- Annual worth calculations Improvised explosive devices (IEDs) are responsible for many deaths in times of strife and war. Unmanned ground vehicles (robots) can be used to disarm the IEDs and perform other tasks as well. If the robots cost $125,000 each and the military arms unit signs a contract to purchase 4,000 of them now and another 7,500 one year from now, what is the equivalent annual cost of the contract over a 8.00-year period at 12.00% per year interest? (Round the final answer to three decimal places.) The equivalent cost of the contract is determined to be $arrow_forwardThe city's Public Works Department must decide between two water purification systems. The cost of system 1 is known and is provided in the table. The cost of chemicals for system 2 is unknown. System 2 uses chemicals at a rate of 58400 pounds per year. At what price (dollars per pound) of chemicals for system 2 are the two options equivalent? Interest rate is 6%, and the analysis period is 20 years. Solve using annual cash flow analysis. Initial cost Annual Chemical Cost Lifetime (years) Part 1 System 1 322000 45000 20 Sysetm 2 539000 Unknown 20 At what price (dollars per pound) of chemicals for system 2 are the two options equivalent? number (rtol-0.01, atol=0.02) 27arrow_forward
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