ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Required information
Parker Hannifin of Cleveland, Ohio, manufactures CNG fuel dispensers. It needs replacement equipment to streamline one
of its production lines for a new contract, but it plans to sell the equipment at or before its expected life is reached at an
estimated market value for used equipment.
Select between the two options using the corporate MARR of 15% per year and a future worth analysis for the expected use period.
Option
First Cost
AOC, per Year
Expected Market Value
Expected Use
$-74,000
$-14,000
$-84,000
$-10,000
$11,000
б years
$10,000
З уears
The future worth of option D is $
The future worth of option E is $
Option (Click to select) v is selected.
expand button
Transcribed Image Text:Required information Parker Hannifin of Cleveland, Ohio, manufactures CNG fuel dispensers. It needs replacement equipment to streamline one of its production lines for a new contract, but it plans to sell the equipment at or before its expected life is reached at an estimated market value for used equipment. Select between the two options using the corporate MARR of 15% per year and a future worth analysis for the expected use period. Option First Cost AOC, per Year Expected Market Value Expected Use $-74,000 $-14,000 $-84,000 $-10,000 $11,000 б years $10,000 З уears The future worth of option D is $ The future worth of option E is $ Option (Click to select) v is selected.
A remotely located air sampling station can be powered by solar cells or by running an electric line to the site and using conventional
power, Solar cells will cost $12.600 to install and will have a useful life of 4 years with no salvage value. Annual costs for inspection,
cleaning, etc. are expected to be $1,400. A new power line will cost $11,000 to install, with power costs expected to be $800 per year.
Since the air sampling project will end in 4 years, the salvage value of the line is considered to be zero, At an interest rate of 10% per
year, which alternative should be selected on the basis of a future worth analysis?
The future worth of solar cells is $
and that of electric line is $
(Click to select) v should be selected on the basis of a future worth analysis.
expand button
Transcribed Image Text:A remotely located air sampling station can be powered by solar cells or by running an electric line to the site and using conventional power, Solar cells will cost $12.600 to install and will have a useful life of 4 years with no salvage value. Annual costs for inspection, cleaning, etc. are expected to be $1,400. A new power line will cost $11,000 to install, with power costs expected to be $800 per year. Since the air sampling project will end in 4 years, the salvage value of the line is considered to be zero, At an interest rate of 10% per year, which alternative should be selected on the basis of a future worth analysis? The future worth of solar cells is $ and that of electric line is $ (Click to select) v should be selected on the basis of a future worth analysis.
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