Chapter 18, Problem 16RQ

A warehouse rents for $5,236 per month.  Assuming that the warehouse contains 9,520 square feet (sq. ft.), calculate the annual rent per square foot.

An investor is considering buying some land for $100,000 and constructing an office building on it. Three different buildings are being analyzed.

If the cost of a renovation in 10 years is expected to be $100,000 in “then present” dollars, what is the present worth of this work if the interest rate is 7% and the rate of inflation is 2%?

1. A project your firm is considering for implementation has these estimated costs and revenues: an investment cost of $50,000; maintenance costs that start at $5,000 at the end of year (EOY) 1 and increase by $1,000 for each of the next 4 years, and then remain constant for the following 5 years; savings of $20,000 per year (EOY 1-10); and finally a resale value of $35,000 at the EOY 10. If the project has a 10-year life and the firm's MARR is 10% per year, what is the present worth of the project? Is it a sound investment opportunity? 2. A toll bridge across the Mississippi River is being considered as a replacement for the current 1-40 bridge linking Tennessee to Arkansas. Because this bridge, if approved, will become a part of the U.S. Interstate Highway system, the B-C ratio method must be applied in the evaluation. Investment costs of the structure are estimated to be $17,500,000 and $325,000 per year in operating and maintenance costs are anticipated. In addition, the bridge…

Mrs. Publinsky and her husband, Xander, are planning their dream house. The lot for the house sits high on a hill with a beautiful view of the White Mountains. The plans show the size of the house to be 1,700 square feet. The average price for a lot and house similar to this one has been $116 per square foot. Fortunately, Xander is a retired plumber and feels he can save money by installing the plumbing himself. Mrs. Publinsky feels she can take care of the interior decorating. The following average cost information is available from a local bank that makes loans to local contractors and dispenses progress payments to contractors when specific tasks are verified as complete. 20% Excavation and framing complete 5% Roof and fireplace complete 5% Wiring roughed in 4% Plumbing roughed in 78 Siding on 288 Windows, insulation, walks, plaster, and garage complete 7% Furnace installed 3 Plumbing fixtures installed 8% Exterior paint, light fixtures installed, finish hardware installed Carpet…

An air-conditioning contractor is installing a heat pump system in a privatehome. He has agreed to do the job for the cost of parts and labor plus acontractor’s fee of 9% of the total. The heat pump costs $1,495, the electricalsupplies $53, the ducting $81, and the other supplies $39. Three men work16 hours each to install the system. They are paid $14 per hour. Sales tax is6% of the subtotal of the cost for parts, labor, and contractor’s fee. c. How much is the sales tax?

The AW values of three revenue alternatives are $-23,000 for A, $-21,600 for B, and $-27,300 for C. On the basis of these AW values, the correct decision is to:a. select alternative A.b. select alternative B.c. select alternative C.d. select the do nothing alternative.

An air-conditioning contractor is installing a heat pump system in a privatehome. He has agreed to do the job for the cost of parts and labor plus acontractor’s fee of 9% of the total. The heat pump costs $1,495, the electricalsupplies $53, the ducting $81, and the other supplies $39. Three men work16 hours each to install the system. They are paid $14 per hour. Sales tax is6% of the subtotal of the cost for parts, labor, and contractor’s fee. b. What is the contractor’s fee?

Your employer asks you to design a bridge that will not exceed $1 million to build. After doing a study you determine the following:  An ideal bridge can be built for $1.5 million.  Given the design constraints, a bridge built for $1 million will collapse in a moderate earthquake. Your employer says; “if we don’t build the bridge for $1 million, then we are going to have to fire half of the staff, including you.” He further asks you to go ahead with the next stage of the project. From your own point of view with Engineering ethics being the focal point; DISCUSS what you will do?