Basics Of Engineering Economy
2nd Edition
ISBN: 9780073376356
Author: Leland Blank, Anthony Tarquin
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Textbook Question
Chapter 4, Problem 42P
Three different plans were presented to the GAO by a high-tech facilities manager for operating an identity-theft scanning facility. Plan A involves renewable 1-year contracts with payments of $1 million at the beginning of each year. Plan B is a 2-year contract that requires four payments of $600,000 each, with the first one made now and the other three at 6-month intervals. Plan C is a 3-year contract that entails a payment of $1.5 million now and a second payment of $0.5 million 2 years from now. Assuming that the GAO could renew any of the plans under the same payment conditions, which plan is best on the basis of a present worth analysis at an interest rate of 6% per year compounded semiannually?
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Option i
C/R
Option ii
C/R
One Time Costs
One Time Costs
Land-$10 million (Year 1)
C
Renovations- $35M (Year 0)
C
Construction- $100 million ($50 M per year for 2 years
C
Medical Equipment- $20M (Year 0)
C
Medical equipment- $25million (Year 0)
C
Licensing & Consulting- $5M (Year 0)
C
Licensing & Consulting- $15M
(spread across year 1 and 2)
C
Initial Marketing Campaign- $2M (Year 1)
C
Initial Marketing Campaign- $5 million (Year 3)
C
Annual Values
Annual Values
Operations & Staff- $7M / year (Year 2+)
C
Operations & Staff- $11M / year (Year 3+)
C
Maintenance- $2M / year (Year 2+)
C
Maintenance- $2.5M / year (Year 3+)
C
Tech Updates- $1.2M / year (Year 3+)
C
Tech Updates-$1.5M / year (Year 5+)
C
Overhauls
Overhauls
Equipment Repairs- $13M (Year 10)
C
Equipment Repairs- $18M (Year 10)
C
Facilities Upgrades- $20M (Year 15)
C…
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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