Engineering Economy (16th Edition) - Standalone book
16th Edition
ISBN: 9780133439274
Author: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher: PEARSON
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Chapter 3, Problem 16P
A biotech firm is considering abandoning its old plant, built 23 years ago, and constructing a new facility that has 50% more square footage. The original cost of the old facility was $300,000, and its capacity in terms of standardized production units is 250,000 units per year. The capacity of the new laboratory is to be 400,000 units per year. During the past 23 years, costs of laboratory construction have risen by an average of 5% per year. If the cost-capacity factor, based on square footage, is 0.80, what is the estimated cost of the new laboratory?
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An integrated, combined cycle power plant produces 285 MW of electricity by gasifying coal. The capital investment for
the plant is $450 million, spread evenly over two years. The operating life of the plant is expected to be 18
years. Additionally, the plant will operate at full capacity 76% of the time (downtime is 24% of any given year). The
MARR is 10% per year.
a. If this plant will make a profit of two cents per kilowatt-hour of electricity sold to the power grid, what is the simple
payback period of the plant? Is it a low-risk venture?
b. What is the IRR for the plant? Is it profitable?
a. The simple payback period of the plant is years. (Round up to one decimal place.)
It's a
venture.
b. The IRR for the plant is%. (Round to one decimal place.)
The plant is
An area can be irrigated by pumping water from a nearby river. Two competing installations are being considered.
The MARR is 12% per year and electric power for the pumps costs $0.06 per kWh. Recall that 1 horsepower (hp) equals 0.746 kilowatts. (11.2, 11.3)
a. At what level of operation (hours per year) would you be indifferent between the two pumping systems? If the pumping system is expected to operate 2,000 hours per year, which system should be recommended?
b. Perform a sensitivity analysis on the efficiency of Pump A. Over what range of pumping efficiency is Pump A preferred to Pump B? Assume 2,000 hours of operation per year, and draw a graph to illustrate your answer.
Chapter 3 Solutions
Engineering Economy (16th Edition) - Standalone book
Ch. 3 - Prob. 1PCh. 3 - Prob. 2PCh. 3 - Prob. 3PCh. 3 - Prob. 4PCh. 3 - Prob. 5PCh. 3 - Prob. 6PCh. 3 - Prob. 7PCh. 3 - Prepare a composite (weighted) index for housing...Ch. 3 - Prepare a composite (weighted) index for housing...Ch. 3 - Prob. 10P
Ch. 3 - Prob. 11PCh. 3 - Prob. 12PCh. 3 - Prob. 13PCh. 3 - Prob. 14PCh. 3 - Prob. 15PCh. 3 - A biotech firm is considering abandoning its old...Ch. 3 - Prob. 17PCh. 3 - Prob. 18PCh. 3 - Prob. 19PCh. 3 - Prob. 20PCh. 3 - Prob. 21PCh. 3 - Prob. 22PCh. 3 - Prob. 23PCh. 3 - Prob. 24PCh. 3 - Prob. 25PCh. 3 - Prob. 26PCh. 3 - Prob. 28SECh. 3 - Prob. 31CSCh. 3 - Prob. 32CSCh. 3 - Prob. 36FECh. 3 - Prob. 37FECh. 3 - Prob. 38FECh. 3 - Prob. 39FECh. 3 - Prob. 40FECh. 3 - Prob. 41FE
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