ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Chapter 13, Problem 31P
To determine
To determine the optimum replacement year of pollution testing system and compute the cost advantage of the same.
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Problem 8
A colleague has completed the following set of estimated
costs and salvage values for a proposed machine with an initial cost of $15,000.
However, he doesn't know how to find the most economic useful life. To
demonstrate, you compute the equivalent uniform annual cost (EUAC) for year eight
(EUAC) using a MARR of 15%
Useful Estimated Estimated
Life
End-of-
Salvage
(years)
Year MX
Value
1
$0
$10,000
2
$0
$9000
3
$300
$8000
4
$300
$7000
5
$800
$6000
6
$1300
$5000
7
$1800
$4000
8
$2300
$3000
9
$2800
$2000
10
$3300
$1000
#18
A Restaurant is open only for 25 days in a month.
Expenses for the restaurant include raw material for each sandwich at $6.00 per slice, $1,192.00 as monthly rental and
$278.00 monthly as insurance. They consider the cost of lost sales as $5.00 per item. They are able to sell any leftover
sandwiches for $3. They prepares 200.00 sandwiches and sells them at a rate of $13.00/sandwich.
Today there was a party at nearby office so the demand for sandwiches rose to 210.00. How much profit did the
restaurant earn today?
Submit
Answer format: Currency: Round to: 0 decimal places.
Show Hint
A construction firm purchased a used crane 2 years ago for $445,000. Its operating cost is $325,000 per year and it's expected
salvage value 3 years from now is $145,000. The firm's CEO is considering replacing the presently owned used crane with a brand
new crane with a much higher load limit which will cost $1.5 million. The operating cost of the new crane will be $260,000 per year, but
its higher load limit will allow the contractor to generate extra revenue that is expected to amount to $525,000 per year. The new
crane can probably be sold for $850,000 3 years from now. You have been asked to determine how much the presently owned crane
would have to be worth on the open market today for the annual worth (AW) values of the two machines to be the same over a 3-year
planning period. The contractor's MARR is 9% per year.
The presently owned crane should be worth $
Con the open market.
Chapter 13 Solutions
ENGR.ECONOMIC ANALYSIS
Ch. 13 - Prob. 1QTCCh. 13 - Prob. 2QTCCh. 13 - Prob. 3QTCCh. 13 - Prob. 4QTCCh. 13 - Prob. 5QTCCh. 13 - Prob. 1PCh. 13 - Prob. 2PCh. 13 - Prob. 3PCh. 13 - Prob. 4PCh. 13 - Prob. 5P
Ch. 13 - Prob. 6PCh. 13 - Prob. 7PCh. 13 - Prob. 8PCh. 13 - Prob. 9PCh. 13 - Prob. 10PCh. 13 - Prob. 11PCh. 13 - Prob. 12PCh. 13 - Prob. 13PCh. 13 - Prob. 14PCh. 13 - Prob. 15PCh. 13 - Prob. 16PCh. 13 - Prob. 17PCh. 13 - Prob. 18PCh. 13 - Prob. 19PCh. 13 - Prob. 20PCh. 13 - Prob. 21PCh. 13 - Prob. 22PCh. 13 - Prob. 23PCh. 13 - Prob. 24PCh. 13 - Prob. 25PCh. 13 - Prob. 26PCh. 13 - Prob. 27PCh. 13 - Prob. 28PCh. 13 - Prob. 29PCh. 13 - Prob. 30PCh. 13 - Prob. 31PCh. 13 - Prob. 32PCh. 13 - Prob. 33PCh. 13 - Prob. 34PCh. 13 - Prob. 35PCh. 13 - Prob. 36PCh. 13 - Prob. 37PCh. 13 - Prob. 38PCh. 13 - Prob. 39PCh. 13 - Prob. 40PCh. 13 - Prob. 41PCh. 13 - Prob. 42PCh. 13 - Prob. 43PCh. 13 - Prob. 44PCh. 13 - Prob. 45PCh. 13 - Prob. 46PCh. 13 - Prob. 47PCh. 13 - Prob. 48PCh. 13 - Prob. 49PCh. 13 - Prob. 50PCh. 13 - Prob. 51PCh. 13 - Prob. 52PCh. 13 - Prob. 53PCh. 13 - Prob. 54PCh. 13 - Prob. 55PCh. 13 - Prob. 56P
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