Engineering Economy (17th Edition)
17th Edition
ISBN: 9780134870069
Author: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher: PEARSON
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Chapter 5.A, Problem 3P
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Ellis Equipment sold a used Massey Ferguson tractor for $55,000 to a South Kansas farmer 10 years ago. (a) What is the uniform net cash flow that the farmer had to receive each year to realize payback and a return of 5% per year on his investment over a period of 3 years? 5 years? 8 years? All 10 years? (b) If the net cash flow was actually $6000 per year, what is the amount the farmer should have paid for the tractor to realize payback plus the 5% per year return over these 10 years?
The capitalized cost of $ 10,000 , every 5 years forever, starting now at an interest rate of 10% per year?
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A company that manufactures amplified pressure transducers wishes to decide between the machines shown—variable speed (VS) and dual speed (DS). Compare them on the basis of rate of return and determine which should be selected if the MARR = 15% per year. VS DS First cost, $ −250,000 −225,000 AOC, $ per year −231,000 −235,000 Overhaul in year 3, $ — −26,000 Overhaul in year 4, $ −39,000 — Salvage value, $ 50,000 10,000 Life, years 6 6
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
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- A large textile company is trying to decide which sludge dewatering process it should use ahead of its sludge drying operation. The costs associated with centrifuge and belt press systems are shown. Compare them on the basis of their annual worths using an interest rate of 10% per year. System Centrifuge Belt Press First cost, $ −235,000 −150,000 AOC, $/year −48,000 −41,000 Overhaul in year 2, $ -- −26,000 Salvage value, $ 40,000 10,000 Life, years 6 4 The annual worth of the centrifuge system is $− , and the annual worth of the belt press system is $− . The system selected on the basis of the annual worth analysis is the (Click to select) belt press centrifuge system.arrow_forwardFairmont Industries primarily relies on 100% equity financing to fund projects. A goodopportunity is available that will require $250,000 in capital. The Fairmont owner can supply themoney from personal investments that currently earn an average of 8.5% per year. The annualnet cash flow from the project is estimated at $30,000 for the next 15 years. Alternatively, 60%of the required amount can be borrowed for 15 years at 9% per year. If the MARR is the WACC,determine which plan, if either is better. This is a before-tax analysisarrow_forwardA product generates an income of P7300per month and an operating expense of P3000 per month. The initial cost of this product is P15000. The payback period for this investment if MARR is 10% per month is close to: *arrow_forward
- incremental rate of return analysis MARR = 20% %3| 1st 0=-8000 + 12.886,63(P/A,i*,15) + 533,33(P/Fi",15) I*= ? 2nd 0=-2800 + 864,87(P/A,i",15) + 186,67(P/F,i*,15) 1*= ? 3rd 0=-2960 + 1297,32(P/A,i*,15) + 197,33(P/F,i*,15) |*= ? wie 4th 0=-1040 + 2767,6(P/A,i*,15) + 69,33(P/E.i*,15) I*2 0=-2000 + 2508,13(P/A.i*,15)+ 133,34(P/E.i*,15) I*= ?arrow_forwardAn investor buys a rental house for $150,000 and rents it out at an average of $900 per month. During ownership, he incurs maintenance costs averaging $150 per month. He sells the house after five years for $180,000. The monthly rate of return on the investment is nearest to:arrow_forwardDetermine the FW of the following engineering project when the MARR is 15% per year. Is the project acceptable?arrow_forward
- A town in Wyoming wants to drill a geothermal well to provide district heating steam and hot water for its businesses and residences. After government subsidies, the capital investment for the well is $418,000, and the geothermal well will reduce natural gas consumption for steam and hot water production by $50,000 per year. The salvage value of the well is negligible. The simple payback period for this well is 9 years. If the MARR of the town is 6% per year and the life of the geothermal well is 25 years, what is the IRR for this project? Choose the closest answer below. OA. The IRR for the project is 12.1% per year. OB. The IRR for the project is 8.3% per year. OC. The IRR for the project is 13% per year. OD. The IRR for the project is 11.1% per year. CXXarrow_forwardCDO City started a Solid Waste Management initiative in partnership with Tetra Pak Philippines and BXTRA Philippines. This project enables Kagayanons to earn cash/environmental points with every 15 pieces 1 liter UBC of any brand. Profits from recycling Used Beverage Containers (UBCS) have increased at a constant rate of Php 1100 in each of the last 3 years. If this year's profit (end of year 1) is expected to be Php 6000 and the profit trend continues through year 5, what will the profit be at the end of year 5? О а. Р 10400 О Б. Р1100 О с. Р7100 O d. P 6000arrow_forwardA delivery truck has a book value of $10,000 in year 5. The purchase price of the truck is $30,000. If the minimum acceptable rate of return is 10%, what is the equivalent annual capital cost of the truck in year 7?arrow_forward
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