ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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- Most likely estimates for a project are as follows MARR Useful life Initial investment Receipts Expenses (R-E) Determine whether the statement "An initial investment of $3,450 is profitable." is true or false Click the icon to view the relationship between the PW and the percent change in parameter Click the icon to view the interest and annuity table for discrete compounding when the MARR is 10% per year. Choose the correct choice below. False O True 10% per year 6 years $3,000 $1,000/year BIODarrow_forwardQuestion 5 The second, Van Y, has a useful life of 10 years and will cost you $33,000 in Year 0. You expect it to earn the same additional $8,000 per year in profit, and have a salvage value of $5,000 at the end of Year 10. Using the coterminated assumptions and a study period of 15 years, what is the Future Worth of Van Y? Assume that you reinvest all cash flows at the MARR after the end of the useful life of the van. Typed numeric answer will be automatically saved.arrow_forwardGalvanized Products is considering the purchase of a new computer system for their enterprise data management system. The vendor has quoted a purchase price of $80,000. Galvanized Products is planning to borrow 1/4th of the purchase price from a bank at 19% compounded annually. The loan is to be repaid using equal annual payments over a 3-year period. The computer system is expected to last 5 years and has a salvage value of $7,000 at that time. Over the 5-year period, Galvanized Products expects to pay a technician $29,000 per year to maintain the system but will save $58,000 per year through increased efficiencies. Galvanized Products uses a MARR of 17%/year to evaluate investments. What is the external rate of return of this investment?arrow_forward
- A new highway is to be constructed. Design A calls for a concrete pavement costing $80 per foot with a 20-year life; four paved ditches costing $3 per foot each; and four box culverts every mile, each costing $10,000 and having a 20-year life. Annual maintenance will cost $1,600 per mile; the culverts must be cleaned every five years at a cost of $400 each per mile. Design B calls for a bituminous pavement costing $55 per foot with a 10-year life; four sodded ditches costing $1.40 per foot each; and four pipe culverts every mile, each costing $2,100 and having a 10-year life. The replacement culverts will cost $2,450 each. Annual maintenance will cost $2,600 per mile; the culverts must be cleaned yearly at a cost of $225 each per mile; and the annual ditch maintenance will cost $1.55 per foot per ditch. Compare the two designs on the basis of equivalent worth per mile for a 20-year period. Find the most economical design on the basis of AW and PW if the MARR is 12% per year. Click the…arrow_forwardPlease use a financial calculator to solve. Be sure to list your steps. You are evaluating two different silicon wafer milling machines. The Techron I costs $237,000, has a three-year life, and has pretax operating costs of $62, 000 per year. The Techron II costs $ 415,000, has a five - year life, and has pretax operating costs of $ 35,000 per year. For both milling machines, use straight - line depreciation to zero over the project's life and assume a salvage value of $39, 000. If your tax rate is 21 percent and your discount rate is 8 percent, compute the EAC for both machines. (Your answer should be a negative value and indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)arrow_forwardA deep water port for imported liquefied natural gas (LNG) is needed for three years. At the end of the third year, it will cost more to dismantle the LNG facility than it produces in revenues. The cash flows are estimated as follows: The IRR for this LNG facility is closest to which choice below? Choose the closest answer below. A. The IRR for the LNG facility is 9.5% per year. B. The IRR for the LNG facility is 4.7% per year. C. The IRR for the LNG facility is 12.2% per year. D. The IRR for the LNG facility is 14.6% per year. EOY 0 1 2 3 Net Cash Flow - $54 million 44 million 40 million - 24 millionarrow_forward
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