Basics Of Engineering Economy
2nd Edition
ISBN: 9780073376356
Author: Leland Blank, Anthony Tarquin
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Question
Chapter 4, Problem 60P
To determine
Calculate the present worth.
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Students have asked these similar questions
Based on the incremental return shown and the
company's MARR of 16% per year, the alternative
that should be selected is _____
The project initial costs are such that A < C < B.
Comparison Rate of Return, %
(A-DN)
(B-DN)
(C-DN)
(B-A)
(C-A)
(B-C)
Alternative C
Do nothing
Alternative B
Alternative A
Cannot be determined.
17
25
19
14
18
12
Five mutually exclusive cost alternatives that have infinite lives are under consideration for decreasing the fruit-bruising rates of a thin skin-fruit grading and packing operation (peaches, pears, apricots, etc.). The initial costs and cash flows of each alternative are available. If the MARR is 15% per year, the one alternative to select is: Alternative A B C D E Initial cost, $ −11,000 −12,000 −9,000 −14,000 −15,000 Cash flow, $ per year −1000 −900 −1400 −700 −300 (a) A (b) B (c) D (d) E
ChemCo Enterprises is the manufacturer of Ultra-Dry, a hydrophobic coating that will waterproofanything. Over a 5 year period, the costs associated with the pilot test product line were as follows: first cost of $43,000 and annual costs of $18,000. Annual revenue was $40,000 and used equipment was salvaged for $4,000. What rate of return did the company make on the product?
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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Similar questions
- Chemco Enterprises is the manufacturer of Ultra-Dry, a hydrophobic coating that will waterproof anything. Over a 5-year period, the costs associated with the pilot test product line were as follows: first cost of $32,000 and annual costs of $18,000. Annual revenue was $29,000 and used equipment was salvaged for $4,000. What rate of return did the company make on this product? The rate of return the company made on the product is %.arrow_forwardWhat is meant by the term equal service alternative?arrow_forwardAfter 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?arrow_forward
- Determine the FW of the following engineering project when the MARR is 15% per year. Is the project acceptable?arrow_forwardThe PW-based relation for the incremental cash flow series to find Δi* between the lower first-cost alternative X and alternative Y has been developed. 0 = − 40,000 + 9000(P∕A,Δi*,10) − 2000(P∕F,Δi*,10) Determine the highest MARR value for which Y is preferred over X. Write the single-cell spreadsheet function that displays Δi*.arrow_forwardCharlie’s Truck Repair and Service has a new contract that requires him to purchase and maintain new equipment for work on 18-wheeler trucks and heavy road equipment. Two separate vendors have made quotes and estimates for Charlie. Use the estimates and a 6% per year return requirement to find the better economic option. One problem is that Charlie does not currently know if the contract will last for 5, 8, or 10 years. He needs a recommendation for all three time periods. Vendor Ferguson Halgrove First cost P, $ −203,000 −396,000 M&O, $ per year −90,000 −82,000 Salvage value, SV 10% of P 10% of P Maximum life, years 5 10arrow_forward
- For the three mutually exclusive alternatives below, use a MARR of 15% per year to select the best alternative using (a.) rate of return analysis and (b) Aw analysis on the actual cash flow estimates with MARR=15%arrow_forwardThe three elements namely incremental cash flow series, LCM, and multiple roots-are considered primary reasons that the ROR method is often applied incorrectly in engineering economy analyses of multiple alternatives Select one: True Falsearrow_forwardFor each of the following problems, (a) draw the cash flow diagram; (b) present clean and clear manual solutions to the problem; (c) highlight the final answer (only the final answer as required by the problem) by enclosing it within a box. An engineer is trying to decide which process to use to reduce sludge volume prior to disposal. Belt filter presses (BFP) will cost $200,000 to buy and $80,000 per year to operate. Belts will be replaced one time per year at a cost of $5,500. Centrifuges will cost $400,000 to buy and $120,000 per year to operate, but because the centrifuge will produce a thicker cake, the sludge hauling cost to the monofill will be $30,000 per year less than for the belt presses. The useful lives are 5 and 10 years for BFP and the Centrifuge respectively. The salvage values are assumed to be 10% of the first cost of each process whenever they are closed down or replaced. The interest rate is 8%. the PW method and a study period of 15 years.arrow_forward
- For each of the following problems, (a) draw the cash flow diagram; (b) present clean and clear manual solutions to the problem; (c) highlight the final answer (only the final answer as required by the problem) by enclosing it within a box. An engineer is trying to decide which process to use to reduce sludge volume prior to disposal. Belt filter presses (BFP) will cost $200,000 to buy and $80,000 per year to operate. Belts will be replaced one time per year at a cost of $5,500. Centrifuges will cost $400,000 to buy and $120,000 per year to operate, but because the centrifuge will produce a thicker cake, the sludge hauling cost to the monofill will be $30,000 per year less than for the belt presses. The useful lives are 5 and 10 years for BFP and the Centrifuge respectively. The salvage values are assumed to be 10% of the first cost of each process whenever they are closed down or replaced. The interest rate is 8%. Use the PW method to select the more economical process.arrow_forwardWhich is the most efficient analysis method we can use for determining project acceptability on an economic basis?arrow_forwardWhen conducting an ROR analysis of mutually exclusive cost alternatives: (a) All of the projects must be compared against the do-nothing alternative (b) More than one project may be selected (c) An incremental investment analysis is necessary to identify the best one (d) The project with the highest incremental ROR should be selectedarrow_forward
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