Engineering Economy (17th Edition)
Engineering Economy (17th Edition)
17th Edition
ISBN: 9780134870069
Author: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher: PEARSON
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Chapter 2, Problem 23P
To determine

To cost of the fuel without considering time value of money.

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Your boss has asked you to evaluate the economics of replacing 1,000 60-Watt incandescent light bulbs (ILBs) with 1,000 compact fluorescent lamps (CFLs) for a particular lighting application. During your investigation you discover that 13-Watt CFLs costing $2.00 each will provide the same illumination as standard 60-Watt ILBs costing $0.50 each. Interestingly, CFLs last, on average, eight times as long as incandescent bulbs. The average life of an ILB is one year over the anticipated usage of 1,000 hours each year. Each incandescent bulb costs $1.90 to install/replace. Installation of a single CFL costs $2.90, and it will also be used 1,000 hours per year. Electricity costs $0.12 per kilowatt hour (kWh), and you decide to compare the two lighting options over an 8-year study period. If the MARR is 10% per year, compare the economics of the two alternatives and write a brief report of your findings for the boss. Assume that both installation cost and cost of the bulbs occur at the…
Your boss has asked you to evaluate the economics of replacing 1,000 60-Watt incandescent light bulbs (ILBS) with 1,000 compact fluorescent lamps (CFLs) for a particular lighting application. During your investigation you discover that 13-Watt CFLS costing $2.00 each will provide the same illumination as standard 60-Watt ILBS costing $0.50 each. Interestingly, CFLs last, on average, eight times as long as incandescent bulbs. The average life of an ILB is one year over the anticipated usage of 1,000 hours each year. Each incandescent bulb costs $2.00 to install/replace. Installation of a single CFL costs $3.00, and it will also be used 1,000 hours per year. Electricity costs $0.12 per kilowatt hour (kWh), and you decide to compare the two lighting options over an 8-year study period. If the MARR is 12% per year, compare the economics of the two alternatives and write a brief report of your findings for the boss. Assume that both installation cost and cost of the bulbs occur at the…
Jenny Tanaka wants to buy a new car, and the annual gasoline expense is a major consideration. Her present car gets 25 miles per gallon (mpg), and she is considering purchasing a new car that gets 40 mpg. Jenny now drives about 12,000 miles per year and pays $3.25 per gallon of gasoline. She therefore calculates an annual gasoline consumption of 480 gallons for her 25 mpg car (12,000 miles/25 mpg) compared to 300 gallons consumed per year for the 40 mpg car (12,000 miles/40 mpg). Since driving the higher- mileage car would use 180 gallons less per year, Jenny estimates the new car will save her $585 in gasoline expense per year (180 gallons 3 $3.25 per gallon). Suppose Jenny buys the 40 mpg car. According to economic theory, Jenny's actual annual savings on gasoline will be 7 1 C 1 U C VI 10 V K W S TACAZEC 10 GUNS TOMBER 2 than her initial estimate of $585.
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