Basics Of Engineering Economy
Basics Of Engineering Economy
2nd Edition
ISBN: 9780073376356
Author: Leland Blank, Anthony Tarquin
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Chapter 4, Problem 37P

a:

To determine

Select the project.

b:

To determine

New selection of the project with 5 year time period.

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A project your firm is considering for implementation has these estimated costs and revenues: an investment cost of $56417, a maintenance costs that start at $5,000 at end of year (FOY) one and increase by $1,000 for esch of the next four years, and then remain constant for the following five years; savings of $24851 per year (EOY 1-10); and finally a resale value of $31935 at EOY 10 If the project has a 10 year life and the firm's MARR is 10% per yeat, what is the present worth of the project?.
Since many U.S. Navy aircraft are at or near their usual retirement age of 30 years, military officials want a precise system to assess when aircraft should be taken out of service. A computational method developed at Carnegie Mellon maps in 3-D the microstructure of aircraft materials in their present state so that engineers can test them under different conditions of moisture, salt, dirt, etc. Military officials can then determine if an aircraft is fine, is in need of overhaul, or should be retired. If the 3-D system allows the Navy to use one airplane 2 years longer than it normally would have been used, thereby delaying the purchase of a $20 million aircraft for 2 years, what is the present worth of the assessment system at an interest rate of 8% per year?
BREAK-EVEN ANALYSIS Consider a hybrid vehicle with a price of $30,000. This vehicle will average 30 miles per gallon of gasoline. A comparably equipped gasoline-only vehicle will cost $28,000 and will average 25 miles per gallon of gasoline. Assuming an interest rate of 3% per year and a study period of five years, find the breakeven cost of gasoline ($/gal) if the vehicle will be driven 18,000 miles each year.

Chapter 4 Solutions

Basics Of Engineering Economy

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