Engineering Economy (17th Edition)
17th Edition
ISBN: 9780134870069
Author: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher: PEARSON
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Question
Chapter 10, Problem 8P
(a):
To determine
Calculate the present worth.
(b):
To determine
Calculate the new benefit cos ratio.
(c):
To determine
Calculate the incremental benefit cos ratio.
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Students have asked these similar questions
Here are the data for an asset that is being considered:
Initial cost=$35,000
Salvage value at 5 years=$5000
Rebuild cost at 3 years=$25,000
Annual net cash flow=$22,000
per year
What is the ROR for this asset? (You can use the excel function "IRR" for this problem)
a)53.0%
b)41.0%
c)43.9%
d)42.8%
QUESTION 1
A new production system for a factory is to be purchased and installed for $179,949. This system will save
approximately 300,000 kWh of electric power each year for a 6-year period. Assume the cost of electricity is $0.10 per
kWh, and factory MARR is 15% per year, and the salvage value of the system will be $8,703 at year 6. Using the AW
method to analyzes if this investment is economically justified
A- calculate the AW of the above investment and insert the result below.
-44377.1565
1.a You are faced with a decision on an investment proposal. Specifically, the estimated additional income from the investment is $125,000 per year; the investment cost is $400,000; and the first year estimated expense of $20,000 and will increase a rate of 5% per year. Assume an 8-year analysis period, no salvage value, and MARR = 15% per year. Calculate the PW and FW of this proposal?
Show the whole solution, not in excel please
Chapter 10 Solutions
Engineering Economy (17th Edition)
Ch. 10 - Prob. 1PCh. 10 - Prob. 2PCh. 10 - Prob. 3PCh. 10 - A retrofitted space-heating system is being...Ch. 10 - Prob. 5PCh. 10 - Prob. 6PCh. 10 - Prob. 7PCh. 10 - Prob. 8PCh. 10 - Prob. 9PCh. 10 - Prob. 10P
Ch. 10 - Prob. 11PCh. 10 - Prob. 12PCh. 10 - Prob. 13PCh. 10 - Prob. 14PCh. 10 - Prob. 15PCh. 10 - Prob. 16PCh. 10 - Four mutually exclusive projects are being...Ch. 10 - Two municipal cell tower designs are being...Ch. 10 - Prob. 19PCh. 10 - Prob. 20PCh. 10 - Prob. 21PCh. 10 - Prob. 22PCh. 10 - You have been requested to recommend one of the...Ch. 10 - Prob. 24PCh. 10 - Prob. 25PCh. 10 - Prob. 26FECh. 10 - Prob. 27FECh. 10 - Prob. 28FECh. 10 - Prob. 29FECh. 10 - Prob. 30FECh. 10 - Prob. 31FE
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- You are faced with a decision on an investment proposal. Specifically, the estimated additional income from the investment is $125,000 per year; the investment cost is $400,000; and the first year estimated expense of $20,000 and will increase a rate of 5% per year. Assume an 8-year analysis period, no salvage value, and MARR = 15% per year. a. Calculate the PW and FW of this proposal? b. What is the ERR ( Ԑ=MARR) of this proposal? c. What is the Simple and Discounted payback? (Upload the picture of your complete solutions including the correct cash flow diagram and your conclusion.)arrow_forwardYou are faced with a decision on an investment proposal. Specifically, the estimated additional income from the investment is $125,000 per year; the investment cost is $400,000; and the first year estimated expense of $20,000 and will increase a rate of 5% per year. Assume an 8-year analysis period, no salvage value, and MARR = 15% per year. a. Calculate the PW and FW of this proposal? b. What is the ERR ( Ԑ=MARR) of this proposal? c. What is the Simple and Discounted payback? include the cash flow diagram and conclusionarrow_forwardGive typing answer with explanation and conclusion A piece of equipment has a first cost of $175,000, a maximum useful life of 7 years, and a market (salvage) value described by the relation S = 120,000 – 11,000k, where k is the number of years since it was purchased. The salvage value cannot go below zero. The AOC series is estimated using AOC = 60,000 + 14,000k. The interest rate is 12% per year. Determine the economic service life and the respective AW. The AW at the Economic Service Life, (in $)arrow_forward
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