ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Problem3:
Tom has been asked to estimate the cost today of a 10 hp electric motor for a new plant
being analyzed. He has the following data:
- His company paid $1000 for a 5 hp electric motor 5 years ago.
Electric motors within this range of capacity have a power sizing exponent (x) of
0.69.
- Five years ago, the electric motors Cost Index was 125; it is 175 today.
What estimate for the electric motor cost today will Tom obtain?
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Transcribed Image Text:Problem3: Tom has been asked to estimate the cost today of a 10 hp electric motor for a new plant being analyzed. He has the following data: - His company paid $1000 for a 5 hp electric motor 5 years ago. Electric motors within this range of capacity have a power sizing exponent (x) of 0.69. - Five years ago, the electric motors Cost Index was 125; it is 175 today. What estimate for the electric motor cost today will Tom obtain?
Problem1:
A summer camp for youngsters has the following data:
Charge per camper (selling price)
Fixed costs
$144
$4800
Variable cost per camper
Capacity
1. Write the total revenue equation.
2. Write the total cost equation.
3. Determine the breakeven point in units.
4. Calculate the breakeven point in dollars.
5. If fixed costs decrease 10%, what is the new breakeven point in units and in dollars?
6. What is the profit or loss of the session if the camp operates at 80% capacity?
Problem 2:
A company is considering a capital cost of $80000 to acquire new machinery. The expected
annual revenue is $45000. After 6 years its salvage value will be $15000. An overhaul costing
$10000 will be needed in year 3. The operation and maintenance cost (O&M) will be $5000 per
year. Complete the corresponding table and cashflow diagram below.
a. Cash flow table
Year
0
1
2
3
4
5
6
$96
200 campers
Capital Cost Annual
Revenue
b. Cash flow diagram
O&M
Overhaul
Salvage
Cost
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Transcribed Image Text:Problem1: A summer camp for youngsters has the following data: Charge per camper (selling price) Fixed costs $144 $4800 Variable cost per camper Capacity 1. Write the total revenue equation. 2. Write the total cost equation. 3. Determine the breakeven point in units. 4. Calculate the breakeven point in dollars. 5. If fixed costs decrease 10%, what is the new breakeven point in units and in dollars? 6. What is the profit or loss of the session if the camp operates at 80% capacity? Problem 2: A company is considering a capital cost of $80000 to acquire new machinery. The expected annual revenue is $45000. After 6 years its salvage value will be $15000. An overhaul costing $10000 will be needed in year 3. The operation and maintenance cost (O&M) will be $5000 per year. Complete the corresponding table and cashflow diagram below. a. Cash flow table Year 0 1 2 3 4 5 6 $96 200 campers Capital Cost Annual Revenue b. Cash flow diagram O&M Overhaul Salvage Cost
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