Principles of Engineering Economic Analysis
6th Edition
ISBN: 9781118163832
Author: John A. White, Kenneth E. Case, David B. Pratt
Publisher: Wiley, John & Sons, Incorporated
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Question
Chapter 10, Problem 21P
a:
To determine
Calculate the after tax cash flow with straight line depreciation.
b:
To determine
Calculate the after tax cash flow with MACRS depreciation.
c:
To determine
Calculate the after tax cash flow with double declining balance depreciation.
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Students have asked these similar questions
The company you work for wants to start a new
project. The initial cost of the project is $120,000. It
is expected that revenues will be $18,000 annually.
There will be annual operating expenses of $17,000.
At the end of the 9-year life of the project, there is a
salvage value of $25,000. Use a MARR of 5%.
Perform a PW (present worth) analysis. What is the
PW of the project?
Question 2 Part C: Provide the PW value of the
project. Enter your answer in the form: 12345
You are considering investing RM64000 in new
equipment. You estimate that the net cash flows
will be RM14000 during the first year, but will
increase by RM2500 per year the next year and
each year thereafter. The equipment is
estimated to have a 7-year service life and a net
salvage value of RM5300 at that time. Assume
MARR of 9%.
a.Calculate the annual capital cost CR (ownership cost)
for the equipment.
Format : 87348
b.Determine the equivalent annual savings.
Format: 60952
c.Is this a wise investment? Y/N.
Format: A
Financial information about graders planned to be purchased is presented in the table below. Calculate the net
present values of the machines with the least common multiple (LCM) approach. Choose the economically
most suitable grader. MARR is specified as 16%.
Purchase costs (TL)
Annual repair-maintenance cost (TL)
Major repair-maintenance (TL)
Annual income (TL)
Salvage value (end of 4th year) (TL)
Economic life (years)
Machine A
220.000+ 12.500*X
5.000
15.000 (at 3rd year)
110.000+ 2.000*Y
50.000
4
Machine B
300.000 + 14.500*Y
3.500
12.000 (at 3rd year)
140.000 + 1.200*X
70.000
6
Chapter 10 Solutions
Principles of Engineering Economic Analysis
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