National homebuilders Inc plans to purchase new rain gutter forming equipment. Two manufacturers offered the following estimates, First Cost, $ Annual Operating Cost, $/year Salvage Value, $ Life, years Vendor A 15,000 3500 1000 6 Vendor B 18,000 3100 2000 9

A seasonal bus tour firm has 5 buses with a capacity of 60 people each. Each customer pays $25 for a one-day tour. Records show $360,000 in fixed costs per season, incremental costs of $5 per customer, and an average daily occupancy of 80%. The number of days of operation necessary each season to break even is closest to which value? (a) 50 days (b) 75 days (c) 100 days (d) 120 days?

2-8 Consider the accompanying breakeven graph for an investment, and answer the following questions as they pertain to the graph. Euros (x104) €40r 585850 35 30 25 20 15 10 s 0 Total Revenue Total Cost 250 500 750 1000 1250 1500 1750 Output (units/year) Give the equation to describe total revenue for x units per year. (b) Give the equation to describe total costs for x units per year. (c) What is the "breakeven" level of x in terms of costs and revenues? (d) If you sell 1500 units this year, will you have a profit or loss? How much?

SUBJECT: Engineering Economics Number 3

An assembly line can produce 80 units per hour. The line's hourly cost is $4250 on straight time (the first 8 hours). Workers are guaranteed a minimum of 5 hours. There is a 35% premium for overtime, however, productivity for overtime drops by 10%. What are the average and marginal costs per unit for the following daily quantities? (a) 350 (b) 500 (c) 640 (d) 850

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Determine the ESL, at i = 15% per year for equipment that has a first cost of $8,000 and the estimated operating costs and year-end salvage values shown below Year Operation Cost Salvage Value $ per Year $ 1 -1000 2 -1200 3 -1300 4 -2100 1 year 2 years 3 years 4 years 6000 5000 3000 2000