Engineering Economy
16th Edition
ISBN: 9780133582819
Author: Sullivan
Publisher: DGTL BNCOM
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Textbook Question
Chapter 1, Problem 7P
A large electric utility company has proposed building an $820 million combined cycle, gas-powered plant to replace the electric generation capacity at one of its coal-fired facilities. Develop three other alternatives for replacing this electric generation capacity.
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Question 3
Consider a proposal to enhance production of tortillas en a
taqueria.
The new machine is estimated to cost $33 million and will
incur an additional $1.5 million per year in maintenance
costs.
The machine will produce annual savings of $4.5 million each
year.
The Minimum acceptable rate of return (MARR) is 8.5% per
year, and the study period is five years at which time the
machine will be obsolete (worthless).
What is the maximum (minimum) percentage of initial
investmet change that reverse your decision?
You are weighing the economics of installing a triple-glazed energy efficient window system in your building. The following life cycle costs and savings are provided. The study period is 25 years, and the discount rate is 10%. Is this an economically viable approach based on the Savings-to-Investment Ratio (SIR)? Triple- Glazed Energy Efficient Windows: Window Quantity takeoff: 10000 sf Initial Cost: $100/sf Annual Operating Costs: $2.5/sf Annual Energy Saving: $10/sf
A hypothetical wind turbine takes one year to build and costs 1.5 million TL. The operating and maintenance costs are 300,000 TL per year which increases by 2 % each year. The wind turbine’s lifespan is 10 years, and it is estimated to produce 3 million kWhe each year. The associated discount rate for the project is 8 %. What is the levelized cost of electricity for this project?
Chapter 1 Solutions
Engineering Economy
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