Basics Of Engineering Economy
2nd Edition
ISBN: 9780073376356
Author: Leland Blank, Anthony Tarquin
Publisher: MCGRAW-HILL HIGHER EDUCATION
expand_more
expand_more
format_list_bulleted
Question
Chapter 4, Problem 51P
To determine
Calculate the difference in capitalized cost.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
Last month you lent a work colleague $5000 to cover some overdue bills. He agreed to pay you in 1 month with interest at 2% for the month, thus owing you $5100. Today, when the repayment is due, he asked you to extend the loan for another month and he would pay you the $5100 next month. In the meantime, you have had the offer to invest as much as you wish in an oil-well venture that is expected to pay 25% per year and a hot new IT stock that is estimated to return 30% the first year. If you let your colleague have another month, what is the opportunity cost of your decision? (Note: Express your answer in dollar and percentage amounts.)
After 15 years of employment in the airline industry, John started his own consulting company to use physical and computer simulation in the analysis of commercial airport accidents on runways. He estimates his average cost of new capital at 8% per year for physical simulation projects, that is, where he physically reconstructs the accident using scale versions of planes, buildings, vehicles, etc. He has established 12% per year as his MARR. What net rate of return on capital investments for physical simulation does he expect?
If you receive a $5000 bond as a graduation present and the bond will pay you $75 interest every 3 months for 20 years, what is the bond coupon rate?
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
Knowledge Booster
Similar questions
- Hand written solutions are strictly prohibitedarrow_forwardAccording to Norstrom’s criterion, there is only one positive rate of return value in a cash flow series when: (a) The cumulative cash flow starts out positive and changes sign only once (b) The cumulative cash flow starts out negative and changes sign only once (c) The cumulative cash flow total is greater than zero (d) The cumulative cash flow total is less than zeroarrow_forwardA former student of an engineering department wishes to donate to the department's scholarship fund. Three options are available: Plan A: $60,000 now Plan B: $15,000 per year for 8 years beginning year 1 from now Plan C: $50,000 three years from now and another $80,000, five years from now. From the department's perspective, it wants to select the plan that maximizes the buying power of the dollars received. The department head asked the engineering professor evaluating the plans to account for inflation in the calculations. If the donation earns a real 10% per year and the inflation rate is expected to average 3% per year, which plan should be accepted? O Barrow_forward
- What is the internal rate of return on a $3,000 loan to be repaid as $3,500 two years from nowarrow_forwardSunbelt Corporation, an investment company, is considering building a 50 unit student apartment complex in a growing area near BIUST, in Palapye. Since the long-term growth potential of the town is excellent, it is believed that the company could average 85% full occupancy for the complex each year. If the following financial data are reasonably accurate estimates, determine the minimum monthly rent that should be charged if a 15% rate of return is desired: Land investment cost = P1 000 000 Building investment cost = P15 000 000 Annual upkeep cost = P150 000 Property taxes and insurance = 5% of total initial investment Study period = 25 years Salvage value = only land cost can be recovered in full Insert your answer to 2 decimal places with no units. . . .arrow_forwardAssume you have a total of $200,000 to invest in two corporate stocks identified as Z1 and Z2. The overall rate of return you require on the $200,000 is 26% per year. (a) If $40,000 is invested in Z2 with an estimated i * Z2 of 14% per year, what value must i * Z1 exceed to realize at least 26% per year? (b) If the best return expected from the Z1 stock is 27%, determine the threshold level of investment in Z2 to maintain an overall ROR of 26% per year. Solve by hand or using Goal Seek, as instructed.arrow_forward
- ENGINEERING ECONOMICS The ABC Foundation expects to award Php15,000,000 in grants to public high schools. The grants will extend over a 10-year period and will create an estimated savings of Php1,500,000 per year in faculty salaries and student-related expenses. The Foundation uses a rate of return of 6% per year on all grant awards. This grant program will share Foundation funding with ongoing activities, so an estimated Php200,000 per year will be removed from other program funding. To make this program successful, a Php500,000 per year operating cost will be incurred from the regular M&O budget. Use the B/C method to determine if the grant program is economically justified.arrow_forwardA local company assembling stereo radio cassette produces 300 units per month at a cost of ₱700 per unit. Each stereo radio cassette sells for ₱1,200. If the firm makes a profit of 10% on its 10,000 shares with a par value of ₱200 per share and the total cost per month is ₱20,000. How many units gives the break-even point and how much is the loss or profit if only 100 units are produced in a given month?arrow_forwardA total of $50,000 was allocated to a project to detect and reduce insider theft in the ZipCar auto parts store. Two alternatives identified as Y and Z are under consideration. The overall ROR on the $50,000 is expected to be 40%, with the rate of return on the $20,000 increment between Y and Z at 15% per year. If Z is the higher first-cost alternative, (a) what is the size of the investment required in Y, and (b) what is the rate of return on Y?arrow_forward
- Solve it economicarrow_forwardV9arrow_forwardAloma, a university graduate who started a successful business, wants to start an endowment in her name that will provide scholarships to IE students. She wants the scholarship to provide $10,000 per year and expects the first one to be awarded on the day she fulfills the endowment obligation. If Aloma plans to donate $100,000, what rate of return must the university realize in order to award the $10,000 per year scholarship forever?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Principles of Economics (12th Edition)EconomicsISBN:9780134078779Author:Karl E. Case, Ray C. Fair, Sharon E. OsterPublisher:PEARSONEngineering Economy (17th Edition)EconomicsISBN:9780134870069Author:William G. Sullivan, Elin M. Wicks, C. Patrick KoellingPublisher:PEARSON
- Principles of Economics (MindTap Course List)EconomicsISBN:9781305585126Author:N. Gregory MankiwPublisher:Cengage LearningManagerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage LearningManagerial Economics & Business Strategy (Mcgraw-...EconomicsISBN:9781259290619Author:Michael Baye, Jeff PrincePublisher:McGraw-Hill Education
Principles of Economics (12th Edition)
Economics
ISBN:9780134078779
Author:Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:9780134870069
Author:William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-...
Economics
ISBN:9781259290619
Author:Michael Baye, Jeff Prince
Publisher:McGraw-Hill Education