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 39P
a:
To determine
Select the project.
b:
To determine
New selection of the project.
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Concurris Prototyping is committed to using the newest and finest equipment in its labs. Accordingly, Wilma, a senior engineer, has
recommended that a 2-year-old piece of precision measurement equipment be replaced immediately. She believes it can be
demonstrated that the proposed equipment is economically advantageous at a 15% per year return and a planning horizon of 5 years
Perform the replacement analysis using the annual worth method. a 5-year study period, and the estimates below. Was Wilma correct?
Equipment
Proposed
42,000
Original purchase price. S
Current market value, S
Remaining life, years
stimated value in 5 years, S
Salvage value after 15 years. S
AOCES per year
The AW of the defender a $-
Wilma Click to select correct
Current
-30,000
15.000
5
2000
-13.000
15
30.000
5.000
-3,000
and the AW of the challenger is $-
Concurris Prototyping is committed to using the newest and finest equipment in its labs. Accordingly, Wilma, a senior engineer, has recommended that a 2-year-old piece of precision measurement equipment be replaced immediately. She believes it can be demonstrated that the proposed equipment is economically advantageous at a 15%-per year return and a planning horizon of 5 years. Perform the replacement analysis using the annual worth method, a 5-year study period, and the estimates below. Was Wilma correct?
Equipment
Current
Proposed
Original purchase price, $
−30,000
−36,000
Current market value, $
15,000
--
Remaining life, years
5
15
Estimated value in 5 years, $
7,000
10,000
Salvage value after 15 years, $
--
5,000
AOC, $ per year
−7,000
−3,000
The AW of the defender is $− and the AW of the challenger is $− .
Wilma (Click to select) is is not correct.
Concurris Prototyping is committed to using the newest
and finest equipment in its labs. Accordingly, Wilma, a
senior engineer, has recommended that a 2-year-old piece
of precision measurement equipment be replaced
immediately. She believes it can be demonstrated that the
proposed equipment is economically advantageous at a
15%-per year return and a planning horizon of 5 years.
Perform the replacement analysis using the annual worth
method, a 5-year study period, and the estimates below.
Was Wilma correct?
Equipment
Original purchase price, $
Current market value, $
Remaining life, years
Estimated value in 5 years, $
Salvage value after 15 years, $
AOC, $ per year
Current
-30,000
15,000
5
7,000
-11,000
The AW of the defender is $-
challenger is $-
Wilma ((Click to select)) correct.
Proposed
-40,000
--
15
10,000
5,000
-3,000
and the AW of the
Chapter 4 Solutions
Basics Of Engineering Economy
Ch. 4 - State two conditions under which the do-nothing...Ch. 4 - Prob. 2PCh. 4 - Prob. 3PCh. 4 - Prob. 4PCh. 4 - Prob. 5PCh. 4 - Prob. 6PCh. 4 - Prob. 7PCh. 4 - Prob. 8PCh. 4 - Prob. 9PCh. 4 - The costs associated with manufacturing a...
Ch. 4 - Prob. 11PCh. 4 - Prob. 12PCh. 4 - Prob. 13PCh. 4 - Prob. 14PCh. 4 - Prob. 15PCh. 4 - Prob. 16PCh. 4 - Prob. 17PCh. 4 - Prob. 18PCh. 4 - Prob. 19PCh. 4 - Prob. 20PCh. 4 - Prob. 21PCh. 4 - Prob. 22PCh. 4 - Prob. 23PCh. 4 - Prob. 24PCh. 4 - Prob. 25PCh. 4 - Prob. 26PCh. 4 - Prob. 27PCh. 4 - Prob. 28PCh. 4 - Prob. 29PCh. 4 - Prob. 30PCh. 4 - Prob. 31PCh. 4 - Two mutually exclusive projects have the estimated...Ch. 4 - Prob. 33PCh. 4 - Prob. 34PCh. 4 - Prob. 35PCh. 4 - Prob. 36PCh. 4 - Prob. 37PCh. 4 - The manager of engineering at the 900-megawatt...Ch. 4 - Prob. 39PCh. 4 - Prob. 40PCh. 4 - Prob. 41PCh. 4 - Three different plans were presented to the GAO by...Ch. 4 - The U.S. Army received two proposals for a turnkey...Ch. 4 - Prob. 44PCh. 4 - Prob. 45PCh. 4 - Prob. 46PCh. 4 - Prob. 47PCh. 4 - Prob. 48PCh. 4 - Prob. 49PCh. 4 - Prob. 50PCh. 4 - Prob. 51PCh. 4 - Prob. 52PCh. 4 - Prob. 53PCh. 4 - Prob. 54PCh. 4 - Prob. 55PCh. 4 - Prob. 56PCh. 4 - Prob. 57PCh. 4 - Prob. 58PCh. 4 - Prob. 59PCh. 4 - Prob. 60PCh. 4 - Prob. 61PCh. 4 - Prob. 62PCh. 4 - Prob. 63APQCh. 4 - Prob. 64APQCh. 4 - Prob. 65APQCh. 4 - Prob. 66APQCh. 4 - Prob. 67APQCh. 4 - Prob. 68APQCh. 4 - Prob. 69APQCh. 4 - Prob. 70APQCh. 4 - Prob. 71APQ
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- Concurris Prototyping is committed to using the newest and finest equipment in its labs. Accordingly, Wilma, a senior engineer, has recommended that a 2-year-old piece of precision measurement equipment be replaced immediately. She believes it can be demonstrated that the proposed equipment is economically advantageous at a 15%-per year return and a planning horizon of 5 years. Perform the replacement analysis using the annual worth method, a 5-year study period, and the estimates below. Was Wilma correct Equipment Current Proposed Original purchase price, $ Current market value, $ -30,000 -42,000 15,000 Remaining life, years 5 15 Estimated value in 5 years, $ 7,000 10,000 5,000 -3,000 Salvage value after 15 years, $ AOC, $ per year The AW of the defender is $- Wilma (Click to select) correct. -14,000 and the AW of the challenger is $-arrow_forwardConcurris Prototyping is committed to using the newest and finest equipment in its labs. Accordingly. Wilma, a senior engineer, has recommended that a 2-year-old piece of precision measurement equipment be replaced immediately. She believes it can be demonstrated that the proposed equipment is economically advantageous at a 15%-per year return and a planning horizon of 5 years. Perform the replacement analysis using the annual worth method, a 5-year study period, and the estimates below. Was Wilma correct? Equipment Original purchase price, $ Current market value, $ Remaining life, years Proposed -42,000 Estimated value in 5 years, S Salvage value after 15 years. $ AOC. $ per year The AW of the defender is $- Wilma (Click to select) correct. Current -30,000 15,000 5 7,000 F -13,000 15 10,000 5.000 -3,000 and the AW of the challenger is $-arrow_forwardAn investment of $10,000 can be made that will produce a uniform annual of $5,500 for five years and then have a market (salvage) value of $2,000. Annual expenses will be $3,150 each year. The company is willing to accept any project that will earn 10% per year or more, on all invested capital. Using future worth method, what is the future values of the salvage value?arrow_forward
- Define the term measure of worth. Identify three different commonly-applied measures.arrow_forwardA large textile company is trying to decide among three alternatives of sludge dewatering g, processes. The costs associated with these alternatives are shown below. Alternative Y will need an upgrade of $9700 at the end of year 2. At the end of year 2, alternative Z would be replaced with another alternative Z having the same installed and operating costs. If the MARR is 14% per year, which alternative should be chosen? \table[[Alternative,x,Y,Z 6) A large textile company is trying to decide among three alternatives of sludge dewatering processes. The costs associated with these alternatives are shown below. Alternative Y will need an upgrade of $9700 at the end of year 2. At the end of year 2, alternative Z would be replaced with another alternative Z having the same installed and operating costs. If the MARR is 14% per year, which alternative should be chosen? Alternative X Y Z Installed costs $68,500 $48,500 $33,500 Annual operating costs. $6000 $4000 $5000 Overhaul cost in year 2…arrow_forwardAn investment of $10,000 can be made that will produce a uniform annual of $5,500 for five years and then have a market (salvage) value of $2,000. Annual expenses will be $3,150 each year. The company is willing to accept any project that will earn 10% per year or more, on all invested capital. Using future worth method, what is the future values of the annual profit?arrow_forward
- Economical solar energy and energy from fusion have been identified as two of engineering's grand challenges. While work continues on these grand challenges, conservation of energy from non-renewable sources is vital. On a practical level, installing low thermal emissivity windows (low-e windows) on buildings can contribute to energy conservation. Installing low-e windows on a small office building is estimated to cost $10,500. The windows are expected to last 9 years and have no salvage value at that time. The energy savings from the windows are expected to be $2,525 in the 1st year. After the 1st year, the savings are expected to increase by $200 each year due to escalating fossil fuel costs. MARR is 12% per year and annual worth is the preferred measure of economic worth. Part a Are the low-e windows an economically attractive investment? Click here to access the TVM Factor Table Calculator. The annual worth of installing the low-e windows is $ Carry all interim calculations to 5…arrow_forwardAn aerospace industry decides to purchase a new advanced machine.the cost of the machine are estimated to have a 4year useful life .if the MAAR Is 2096 per year . Determine which machine should be purchased on the basis of a role of return analysis. $annual operation cost 16,000,19,000 $first cost machine 31,000, 29,000arrow_forwardAirodyne Wind, Inc. has wind tunnels that can operate vertically or horizontally for evaluating the effects of air flow on a component’s PCB response and reliability. The company expects to build a new tunnel that will be outfitted with multiple sensor ports. For the estimates below, calculate the equivalent annual cost of the project. First cost, $ −800,000 Replacement cost, year 2, $ −300,000 AOC, $/year −950,000 Salvage value, $ 250,000 Life, years 4 Interest rate, % 10arrow_forward
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