Engineering Economy (17th Edition)
17th Edition
ISBN: 9780134870069
Author: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter 5, Problem 24P
An asset has an initial capital investment of$4 million. Its terminal value at the end of an eight-year life is -$1 million (i.e., it costs more to dispose of this asset than it is worth in the marketplace). The MARR is 10% per year. What is the capital recovery amount of this asset? (5.5)
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
It is likely that your college tuition will increase an average of 8% per year for the next 4 years. The annual cost of tuition at the beginning of your freshman year in college will be $12,000 (A1). How much money will you and your parents have to deposit in a mutual fund account one year prior to your freshman year to pay for your tuition for the 4 years you will spend earning your degree in engineering? The mutual fund will earn an average of 5% annual interest.
An industrial firefighting truck costs $100,000. Savings in insurance premiums and uninsured
losses from the acquisition and operation of this equipment is estimated at $60,000/yr. Salvage
value of the apparatus after 5 yrs. is expected to be $20,000. A full-time driver during operating
hours will accrue an added cost of $10,000/yr. What would the rate of return be on this investment?
@ 40% present worth
@ 50% present worth
A bond with a face value of $10,000 pays interest of 5% per year. This bond will be redeemed at its face value at the end of 15 years. How much should be paid now for this bond when the first interest payment is payable one
year from now and a 4% yield is desired? (5.3.2)
Chapter 5 Solutions
Engineering Economy (17th Edition)
Ch. 5.A - Use the ERR method with = 8% per year to solve for...Ch. 5.A - Apply the ERR method with = 12% per year to the...Ch. 5.A - Are there multiple IRRs for the following...Ch. 5.A - Are there multiple IRRs for the following cash...Ch. 5 - Tennessee Tool Works (TTW) is considering...Ch. 5 - Prob. 2PCh. 5 - Prob. 3PCh. 5 - Prob. 4PCh. 5 - What is the capitalized worth of a project that...Ch. 5 - A large induced-draft fan is needed for an...
Ch. 5 - Prob. 7PCh. 5 - Prob. 8PCh. 5 - Prob. 9PCh. 5 - A corporate bond pays 5% of its face value once...Ch. 5 - Prob. 11PCh. 5 - Prob. 12PCh. 5 - Prob. 13PCh. 5 - The cash-flow diagram below has an internal rate...Ch. 5 - Prob. 15PCh. 5 - Prob. 16PCh. 5 - Prob. 17PCh. 5 - Prob. 18PCh. 5 - Prob. 19PCh. 5 - Your firm is thinking about investing 200,000in...Ch. 5 - Determine the FW of the following engineering...Ch. 5 - Prob. 22PCh. 5 - Fill in Table P5-23 below when P = 10,000, S = 2,...Ch. 5 - An asset has an initial capital investment of4...Ch. 5 - A simple, direct space heating system is currently...Ch. 5 - Prob. 26PCh. 5 - Prob. 27PCh. 5 - Prob. 28PCh. 5 - Prob. 29PCh. 5 - Its easier to make money when interest rates in...Ch. 5 - Prob. 31PCh. 5 - Prob. 32PCh. 5 - Stan Moneymaker has been informed of a major...Ch. 5 - The required investment cost of a new, large...Ch. 5 - Prob. 35PCh. 5 - A parking garage has a capital investment cost of...Ch. 5 - The city of Oak Ridge is considering the...Ch. 5 - Prob. 38PCh. 5 - Prob. 39PCh. 5 - Prob. 40PCh. 5 - Prob. 41PCh. 5 - Prob. 42PCh. 5 - Prob. 43PCh. 5 - To purchase a used automobile, you borrow 10,000...Ch. 5 - Your boss has just presented you with the summary...Ch. 5 - Experts agree that the IRR of a college education...Ch. 5 - A company has the opportunity to take over a...Ch. 5 - The prospective exploration for oil in the outer...Ch. 5 - Prob. 49PCh. 5 - An integrated, combined cycle power plant produces...Ch. 5 - A computer call center is going to replace all of...Ch. 5 - Prob. 52PCh. 5 - Prob. 53PCh. 5 - Prob. 54PCh. 5 - The upturned wingtips on jet aircraft reduce drag...Ch. 5 - Prob. 56PCh. 5 - Prob. 57PCh. 5 - Prob. 58PCh. 5 - In southern California a photovoltaic (PV) system...Ch. 5 - a. Calculate the IRR for each of the three...Ch. 5 - Prob. 61PCh. 5 - A hospital germ-fighting and floor cleaning robot,...Ch. 5 - Prob. 63PCh. 5 - Prob. 64SECh. 5 - Prob. 65SECh. 5 - Prob. 66SECh. 5 - A certain medical device will result in an...Ch. 5 - Refer to Problem 5-61. Develop a spreadsheet to...Ch. 5 - Prob. 69CSCh. 5 - Prob. 70CSCh. 5 - Suppose that the average utilization of the CVD...Ch. 5 - Prob. 72FECh. 5 - Prob. 73FECh. 5 - Prob. 74FECh. 5 - Prob. 75FECh. 5 - Prob. 76FECh. 5 - Prob. 77FECh. 5 - Prob. 78FECh. 5 - Prob. 79FECh. 5 - A new machine was bought for 9,000 with life of...Ch. 5 - Prob. 81FECh. 5 - Prob. 82FECh. 5 - Prob. 83FECh. 5 - Prob. 84FECh. 5 - Prob. 85FE
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Similar questions
- A company purchase a piece of manufacturing equipment for an additional income. The expected income is $4.500 per semester. Its useful Me is 9 years Expenses are estimated to be $500 semiannually. If the purchase price is $44,000 and there is a salvage value of $4,500, what is the prospective rate of return (IRR) of this investment? The MARR is 10% compounded semiannually a IRR-6.02% semiannual Ob. IRR 12% semiannual OcIRR-623% semiannual Od. IRR-3% semiannualarrow_forwardYou have received the proposal to invest $1,000,000 in exchange for receiving income of $75,000 at the end of the first month that would decrease 0.3% each month starting from the 2nd month. Expenses are estimated at $25,000 at each end of the month, starting from the 1st month. Assume that the proposal will last 5 years and that the minimum acceptable rate of return (m) is 1.5% per month. What does the Present Value criterion recommend? Show your work. If flow patterns are found (uniform, arithmetic, exponential), use factors.arrow_forwardHow much approx., would be the FW of P30,000 be worth after 50 years if a rate of 10%/yr (compounded monthly) is applied? * a. P4.36M b. P30.45M c. P6.45M d. P3.06Marrow_forward
- You decide to save slightly less than that and save $600 a month to invest into a retirement account promising an annual return of 4% from when you start working at 24 until you retire at 64 years young. How much will you have in your retirement account when you retire? Saving slightly less than the 16 % annual income of 46000or 613.33 per montharrow_forwardA small company purchased now for 1.15M will lose 75,000 each year for the first 4 years. An additional P400,000 invested in the company during the 4th year will result in a profit of 27,500 from the 5th year through the 15th year. At the end of 15 years, the company can be sold for 1.65M.a. Determine the IRR. b. Calculate FW if MARR is 12%/year.c. Calculate ERR ϵ = 12% per year. Not in excelarrow_forwardNeed Solutions ASAP... Felix Jones, a recent engineering graduate, expects a starting salary of $35,000 per year. His future employer has averaged 5% per year in salary increases for the last several years. What is the PW and equivalent annuity for Felix’s salary over the next 5 years? Felix uses an interest rate of 6%. (Answer: PW = $162,009)arrow_forward
- Fitness, Inc. Is advertising a new exercise machine for $1999.99. they will finance the purchase at 6.0% APR for 24 months. How much interest will be paid if someone pays no money down and finances this equipment purchase?arrow_forwardBob and Mary Johnson are expecting their first child.They have decided to deposit $1000 into a savings account that pays 6% interest compounded annually on the day the child is born. They will then deposit $1000 on each birthday through the child’s 18th birthday. How much money will be in the account on the child’s 19th birthday to finance a college education? (Answer must be: $35,786) Solutions manual only with formula, without using Microsoft Excel.arrow_forwardPeter got a 8-year assignment in Argentina. Consequently, he will rent out his three-bedroom house in Hancock to an old friend, and given their friendship, Peter only requires end of the year payments (thus no monthly pmts) to be deposited in a savings account created solely for this purpose. Rental income will be 13,709 dollars per year but maintenance/repair costs will be 503 dollars in the first year and thereafter increase by 213 dollars per year. The tenant will be doing the maintenance/repair operations and therefore, at the end of each year, deposits the annual rent amount net of maintenance costs. Compute how much money will Peter have in his savings account upon his return (8 years from now) given that the proxy interest rate is 7% per year, compounded annually. (note: round your answer to the nearest cent, and do not include spaces, currency signs, plus or minus signs, or commas)arrow_forward
- Determine the FW of the following engineering project when the MARR is 15% per year. Is the project acceptable? (5.4) *A negative market value means that there is a net cost to dispose of an asset. Investment cost Expected lifeMarket (salvage) value* Annual receiptsAnnual expenses $10,000 5 years -$1,000 $8,000 $4,000arrow_forwardSuppose a friend of yours invests $100 each month in an individual retirement account (IRA) for a decade and earns an unbelievable APR of 12% a year (1% per month) on her investment. She will end up with $100 (F/A, 1%, 120) = $100 (230.0387) = $23,003.87 after 10 years. If you decide to invest $200 each month over 10 years, but can earn only a meager APR of 3% per year on it, roughly how much will you have accumulated after 10 years?Choose the closest answer. (a) $19,000 (b) $24,000 (c) $28,000 (d) $46,000.arrow_forwardClick the icon to view the alternatives description. Click the icon to view the interest and annuity table for discrete compounding when the MARR is 10% per year. The FW of the Alternative 1 is $ (Round to the nearest dollar.) Ĵ Today, you have $40,000 to invest. Two investment alternatives are available to you. One would require you to invest your $40,000 now, the other would require the $40,000 investment two years from now. In either case, the investments will end five years from now. The cash flows for each alternative are provided below. Using a MARR of 10%, what should you do with the $40,000 you have? Click the icon to view the alternatives description. Click the icon to view the interest and annuity table for discrete compounding when the MARR is 10% per year. The FW of the Alternative 1 is S. (Round to the nearest dollar.)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:PEARSON
Engineering 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 Learning
Managerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage Learning
Managerial 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
DATA GEMS: How to Access Income Data Tables and Reports From the CPS ASEC; Author: U.S. Census Bureau;https://www.youtube.com/watch?v=BWpVC-Clczw;License: Standard Youtube License