Engineering Economy (17th Edition)
17th Edition
ISBN: 9780134870069
Author: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Textbook Question
Chapter 1, Problem 18P
Owing to the rising cost of copper, in 1982 the U.S. Mint changed the composition of pennies from 95% copper (and 5% zinc) to copper (and 97.5% zinc) 2.5% to save money. Your favorite aunt has a collection of 5,000 pennies minted before 1982, and she intends on gifting the collection to you.
- a. What is the collection’s value based on metal content alone? Copper sells for $3.50 per pound and zinc for $1 per pound. It takes approximately 130 pre-1982 pennies to add up to one pound of total weight.
- b. If it cost the U.S. Mint $0.017 to produce a penny in 2012, is it time to eliminate pennies and round off all financial transactions to the nearest 5 cents (nickel)? As a matter of interest, it cost the government almost 10 cents to produce a nickel in 2012.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
Suppose you are considering whether to purchase a house off of Lake Erie for $400,000. You expect the total costs of maintaining the property (utilities, repairs, etc.) to equal $15,000/year, and that you would be able to generate $35,000/year in revenue if you were to put the house on the short term rental market.
Suppose you are deciding between purchasing the home or whether to invest $400,000 in an interest-bearing account. If your objective is to maximize your own net income, what would the interest rate have to equal for you to invest in the interest-bearing account?
Can you help me just figure out how to set this up? I get that we need the investment to equal 20k but not sure on how to figure out interest rates.
Suppose you are considering whether to purchase a house off of Lake Erie for $400,000. You expect the total costs of maintaining the property (utilities, repairs, etc.) to equal $15,000/year, and that you would be able to generate $35,000/year in revenue if you were to put the house on the short term rental market.
Suppose you are deciding between purchasing the home or whether to invest $400,000 in an interest-bearing account. If your objective is to maximize your own net income, what would the interest rate have to equal for you to invest in the interest-bearing account?
Suppose you decide to buy the house, and now you have to decide whether/when to list the house on the short term rental market (like Airbnb) or stay in the house yourself. Briefly explain what this decision would depend on. What are the implicit (opportunity) costs associated with renting the house to someone else on a given day? What are the implicit costs associated with the staying in the house yourself?…
Tokyo Corporation plans to establish a lockbox arrangement that would reduce its collection float by five (5) days. TC normally receives an average of $160,000 in payments each day. If its opportunity cost is 12 percent, how much should TC be willing to pay each month for the lockbox arrangement? No decimal point, no dollar sign. Use comma. (_____)
Additional Business Textbook Solutions
Find more solutions based on key concepts
Determine the price elasticity of demand if, in response to an increase in price of 10 percent, quantity demand...
Microeconomics
A case study in this chapter discusses the federal minimum-wage law. a. Suppose the minimum wage is above the e...
Principles of Economics (MindTap Course List)
Using the midpoint formula, calculate elasticity for each of the following changes in demand.
Principles of Economics (12th Edition)
Determine the price elasticity of demand if, in response to an increase in price of 10 percent, quantity demand...
Microeconomics
• Illustrate and interpret shifts in the short-run and long-run aggregate supply curves.
Economics of Money, Banking and Financial Markets, The, Business School Edition (5th Edition) (What's New in Economics)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Similar questions
- Are Diamonds Forever? How much would you spend on a diamond engagement ring? If you answered around the national average of $4,000 then you too have fallen victim to one of the most incredible marketing campaigns of all time. A diamond is intrinsically worthless, and against popular belief, they really aren’t that rare. Their resale value is next to nothing. So why are we willing to spend so much on a ring? Well, we can trace that back to the 19th century. Before 1866, diamonds had been rare, but when massive discoveries were found in South Africa, the rock was on the verge of losing its value. Thats when Cecil Rhodes stepped in and founded De Beers Corporation – consolidating the mines and restricting supply, maintaining the fiction that diamonds were scarce and had inherent value. The real change was in 1938, when the company hired N.W. Ayer to increase sales. By tying their product to love, and specifically to a marriage proposal, by the end of the century, over 80% of all brides…arrow_forwardD7 You run an oil company that wants to extract an oil reserve. The total stock of oil in the reserve is 600 barrels. You must sell all of the oil in two time periods, so the quantity extracted will be q1 +q2 = 600. The price per barrel you can sell the oil for is pt = 710 − 1 2 qt in each period. The cost of extracting a single barrel is not constant, but increases as more oil is extracted in a period, c(qt) = 1 2 qt. If the interest rate is 5%, how much oil will you extract in periods 1 and 2 if you wanted to maximize profits.arrow_forward_______ is that money Which is accepted as a medium of exchange because of the trust between the payer and the Payee in economicsarrow_forward
- If you regularly purchase Pepsi for that you pay Rs. 100 per bottle. After taking the drink out of that, if you have 50 empty bottles at your home now, can we term these bottles as money as because you have spent money for these too? If yes then how and if no then whyarrow_forward3. Assuming equilibrium for gold is one hundred times the price of silver, $Au = 100$Ag, which of the following describes an action by an arbitrageur (arb)? a. when Au and Ag prices increase 10%, arb buys gold b. when Au and Ag prices decrease 10%, arb buys gold c. when $Au > 100$Ag, arb buys gold d. when $Au > $100Ag, arb sells goldarrow_forwardWhile on a trip to Baja California, Mexico, in January 1994, Mary bought a house worth $160,000 Mexican pesos. At that time, $1 was worth 3.10 Mexican pesos. One year later $1 was worth 5.64 pesos.Was Mary's investment a good decision? Why or why not?arrow_forward
- Give an example of some action that has both a monetary and non moneraty opportunity costarrow_forward1. Suppose you buy an accessory that will be used in your production activity and is worth a thousand of pesos (P1,000.00). In economic perspective, would you contend that is the only cost involved? Why or why not??arrow_forwardName and explain 2 differences between using oil futures to fix the price of future purchases. Graph if helpfularrow_forward
- How is the value of money originally determined? a. By a discount cash flow analysis of the commodity in question b. By whichever asset is decreed by a government as the money of the land c. By using game theory, where market participants appraise how other participants value it d. By its use in the production of other goods, such as when it is used in the production of high-value goodsarrow_forwardSuppose that the cost of a movie ticket is 30TL, and a latte costs 15TL. Why would the theater management say the cost of a movie ticket is 30TL and not two lattes? Explain why it is more efficient to compare the value of commodities in monetary termsarrow_forwardAnswer the questions on the right based on the following scenario: Buying a Home - Personal Notes Scenario: You are getting a loan to buy your first home. It is a $250,000 home with 3 bedrooms and 2 bathrooms. The price is so low because the economy was bad, a lot of people lost their jobs, and few people are buying homes. You got the following information from the bank: Loan Amount: $150,000 Interest Rate 1 month ago: 4.5% Today: 4.1% Loan Period: 15 years (180 months) a. Based on what you are hearing from friends and what you know about supply and demand in financial markets, what would you predict about the level of interest rates for house loans in the future? Will they stay the same, increase, or decrease? b. Explain your answer by drawing and explaining 2 supply and demand curves, one showing the interest rate today (assume it is 4.1%) and one predicting what the interest rate will look like in 1 month. c. Based on what you know in this situation, does it matter when you…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Economics: Private and Public Choice (MindTap Cou...EconomicsISBN:9781305506725Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage LearningMicroeconomics: Private and Public Choice (MindTa...EconomicsISBN:9781305506893Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage Learning
Economics: Private and Public Choice (MindTap Cou...
Economics
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning
Microeconomics: Private and Public Choice (MindTa...
Economics
ISBN:9781305506893
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning
Decision Tree Analysis - Intro and Example with Expected Monetary Value; Author: Vincent Stevenson;https://www.youtube.com/watch?v=cbCsCQ4l4Zs;License: Standard Youtube License