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 6, Problem 20P
Two electric motors (A and B) are being considered to drive a centrifugal pump. Each motor is capable of delivering 50 horsepower (output) to the pumping operation. It is expected that the motors will be in use 1,000 hours per year. If electricity costs $0.07 per kilowatt-hour and 1 hp = 0.746 kW, which motor should be selected if MARR = 8% per year? Refer to the data below (6.4)
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Two electric motors (A and B) are being considered to drive a centrifugal pump. Each motor is capable of delivering
60
horsepower (output) to the pumping operation. It is expected that the motors will be in use
1,200
hours per year. If electricity costs
$0.09
per kilowatt-hour and 1 hp =
0.746
kW, which motor should be selected if MARR =
7%
per year? Refer to the data below.
An integrated, combined cycle power plant produces 285 MW of electricity by gasifying coal. The capital investment for the plant is $570 million, spread evenly over two years. The operating life of the plant is expected to be 20 years. Additionally, the plant will operate at full capacity 75% of the time (downtime is 25% of any given year). The MARR is 6% per year. Solve, a. If this plant will make a profit of three cents per kilowatt-hour of electricity sold to the power grid, what is the simple payback period of the plant? Is it a low-risk venture? b. What is the IRR for the plant? Is it profitable?
A deep water port for imported liquefied natural gas (LNG) is needed for three years. At the end of the third year, it will cost more to dismantle the LNG facility than it
produces in revenues. The cash flows are estimated as follows:
The IRR for this LNG facility is closest to which choice below?
Choose the closest answer below.
A. The IRR for the LNG facility is 9.5% per year.
B. The IRR for the LNG facility is 4.7% per year.
C. The IRR for the LNG facility is 12.2% per year.
D. The IRR for the LNG facility is 14.6% per year.
EOY
0
1
2
3
Net Cash Flow
- $54 million
44 million
40 million
- 24 million
Chapter 6 Solutions
Engineering Economy (17th Edition)
Ch. 6 - An oil refinery finds that it is necessary to...Ch. 6 - The Consolidated Oil Company must install...Ch. 6 - One of the mutually exclusive alternatives below...Ch. 6 - Three mutually exclusive design alternatives are...Ch. 6 - Prob. 5PCh. 6 - Prob. 6PCh. 6 - Fiesta Foundry is considering a new furnace that...Ch. 6 - Prob. 8PCh. 6 - DuPont claims that its synthetic composites will...Ch. 6 - Prob. 10P
Ch. 6 - Which alternative in the table below should be...Ch. 6 - Prob. 12PCh. 6 - The alternatives for an engineering project to...Ch. 6 - Prob. 14PCh. 6 - Prob. 15PCh. 6 - Prob. 16PCh. 6 - Refer to the situation in Problem 6-16. Most...Ch. 6 - An old, heavily used warehouse currently has an...Ch. 6 - Prob. 19PCh. 6 - Two electric motors (A and B) are being considered...Ch. 6 - Two mutually exclusive design alternatives are...Ch. 6 - Pamela recently moved to Celebration, Florida, an...Ch. 6 - Environmentally conscious companies are looking...Ch. 6 - Prob. 24PCh. 6 - Two 100 horsepower motors are being considered for...Ch. 6 - In the Rawhide Company (a leather products...Ch. 6 - Refer to Problem 6-2. Solve this problem using the...Ch. 6 - Prob. 28PCh. 6 - Prob. 29PCh. 6 - Two electric motors are being considered to drive...Ch. 6 - Prob. 31PCh. 6 - Prob. 32PCh. 6 - Prob. 33PCh. 6 - Potable water is in short supply in many...Ch. 6 - Three mutually exclusive investment alternatives...Ch. 6 - Prob. 36PCh. 6 - A companys MARR is 10% per year. Two mutually...Ch. 6 - Prob. 38PCh. 6 - a. Compare the probable part cost from Machine A...Ch. 6 - A one-mile section of a roadway in Florida has...Ch. 6 - Two mutually exclusive alternatives are being...Ch. 6 - Prob. 42PCh. 6 - IBM is considering an environmentally conscious...Ch. 6 - Three mutually exclusive earth-moving pieces of...Ch. 6 - A piece of production equipment is to be replaced...Ch. 6 - Prob. 46PCh. 6 - Prob. 47PCh. 6 - Prob. 48PCh. 6 - Prob. 49PCh. 6 - Prob. 50PCh. 6 - Prob. 51PCh. 6 - Prob. 52PCh. 6 - Prob. 53PCh. 6 - Use the imputed market value technique to...Ch. 6 - Prob. 55PCh. 6 - Prob. 56PCh. 6 - Prob. 57PCh. 6 - Prob. 58PCh. 6 - Prob. 59PCh. 6 - Prob. 60PCh. 6 - Prob. 61PCh. 6 - Prob. 62PCh. 6 - Prob. 63PCh. 6 - Prob. 64PCh. 6 - Prob. 65PCh. 6 - Prob. 66PCh. 6 - Three models of baseball bats will be manufactured...Ch. 6 - Refer to Example 6-3. Re-evaluate the recommended...Ch. 6 - Prob. 69SECh. 6 - Prob. 70SECh. 6 - Prob. 71SECh. 6 - Prob. 72CSCh. 6 - Prob. 73CSCh. 6 - Prob. 74CSCh. 6 - Prob. 75FECh. 6 - Prob. 76FECh. 6 - Prob. 77FECh. 6 - Complete the following analysis of cost...Ch. 6 - Prob. 79FECh. 6 - For the following table, assume a MARR of 10% per...Ch. 6 - Prob. 81FECh. 6 - Problems 6-82 through 6-85. (6.4) Table P6-82 Data...Ch. 6 - Prob. 83FECh. 6 - Problems 6-82 through 6-85. (6.4) Table P6-82 Data...Ch. 6 - Problems 6-82 through 6-85. (6.4) Table P6-82 Data...Ch. 6 - Consider the mutually exclusive alternatives given...Ch. 6 - Prob. 87FE
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
- An industrial coal-fired boiler for process steam is equipped with a 10-year-old electrostatic precipitator (ESP). Changes in coal quality have caused stack emissions to be in noncompliance with federal standards for particulates. Two mutually exclusive alternatives have been proposed to rectify this problem (doing nothing is not an option). The MARR is 9% per year. Make a recommendation regarding which alternative to select. 3. An industrial coal-fired boiler for process steam is equipped with a 10-year-old electrostatic precipitator (ESP). Changes in coal quality have caused stack emissions to be in noncompliance with federal standards for particulates. Two mutually exclusive alternatives have been proposed to rectify this problem (doing nothing is not an option). Capital investment Annual operating expenses Useful Life New Baghouse $1,140,000 $115,500 10 years New ESP $992,500 $73,200 10 years The MARR is 9% per year. Make a recommendation regarding which alternative to select.arrow_forwardA 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_forwardA 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 $732,000, and the geothermal well will reduce natural gas consumption for steam and hot water production by $60,000 per year. The salvage value of the well is negligible. The simple payback period for this well is 13 years. If the MARR of the town is 5% per year and the life of the geothermal well is 23 years, what is the IRR for this project? Choose the closest answer below. A. The IRR for the project is 6.1% per year. B. The IRR for the project is 7% per year. O C. The IRR for the project is 7.4% per year. O D. The IRR for the project is 3.9% per year.arrow_forward
- Advanced Modular Technology (AMT) makes energy cleaner, safer, more secure and more efficient. It typically exhibits net annual revenues that increase over a fairly long period. In the long run, an AMT project may be profitable as measured by IRR, but its simple payback period may be unacceptable. Evaluate this AMT project using the IRR method when the company MARR is 13% per year and its maximum allowable payback period is two years. What is your recommendation? $98,000 $2,000 + Capital investment at time 0 Net revenues in year k $10,000 • (k- 1) $9,000 Market (salvage) value Life 4 yearsarrow_forwardNadine Chelesvig has patented her invention. She is offering a potential manufacturer two contracts for the exclusive right to manufacture and market her product. Plan A calls for an immediate single lump sum payment to her of $30,000. Plan B calls for an annual payment of $1,000 plus a royalty of $0.50 per unit sold. The remaining life of the patent is10 years. Nadine uses a MARR of 10%/year. Solve, a. What must be the uniform annual sales volume of the product for Nadine to be indifferent between the contracts, based on a present worth analysis? b. If the sales volume is below the volume determined in (a), which contract would the manufacturer prefer?arrow_forward← An oil refinery finds that it is necessary to treat the waste liquids from a new process before discharging them into a stream. The treatment will cost $40,000 the first year, but process improvements will allow the costs to decline by $4,000 each year. As an alternative, an outside company will process the wastes for the fixed price of $20,000/year throughout the 8 year period, payable at the beginning of each year. Either way, there is no need to treat the wastes after 8 years. Use the annual worth method to determine how the wastes should be processed. The company's MARR is 13%. Click the icon to view the interest and annuity table for discrete compounding when the MARR is 13% per year. wwwarrow_forward
- An aerodynamic three-wheeled automobile (the Dart) runs on compressed natural gas stored in two cylinders in the rear of the vehicle. The $13,000 Dart can cruise at speeds up to 85 miles per hour, and it can travel 90 miles per gallon of fuel. Another two-seater automobile costs $12,000 and averages 50 miles per gallon of compressed natural gas. If fuel costs $8.00 per gallon and MARR is 10% per year, over what range of annual miles driven is the Dart more economical? Assume a useful life of six years for both cars. Click the icon to view the interest and annuity table for discrete compounding when the MARR is 10% per year. ... Dart is more economical if you are planning on driving more per year. (Round to the nearest whole number.) miles orarrow_forwardYou purchased a building five years ago for $200,000. Its annual maintenance expense has been $15,000 per year. At the end of three years, you spent $55,000 on roof repairs. At the end of five years (now), you sell the building for $250,000. During the period of ownership, you rented out the building for $60,000 per year paid at the beginning of each year. If your MARR is 8% per year. a) Use the PW and AW methods to evaluate this investment. b) Calculate IRR and ERR(( Ԑ=MARR). (Upload the picture of your complete solutions including the correct cash flow diagram and your conclusion.)arrow_forwardYou purchased a building five years ago for $200,000. Its annual maintenance expense has been $15,000 per year. At the end of three years, you spent $55,000 on roof repairs. At the end of five years (now), you sell the building for $250,000. During the period of ownership, you rented out the building for $60,000 per year paid at the beginning of each year. If your MARR is 8% per year. a) Use the PW and AW methods to evaluate this investment. b) Calculate IRR and ERR(( Ԑ=MARR). include the cash flow diagram and conclusionarrow_forward
- You purchased a building five years ago for $200,000. Its annual maintenance expense has been $15,000 per year. At the end of three years, you spent $55,000 on roof repairs. At the end of five years (now), you sell the building for $250,000. During the period of ownership, you rented out the building for $60,000 per year paid at the beginning of each year. If your MARR is 8% per year. a) Use the PW and AW methods to evaluate this investment. b) Calculate IRR and ERR(( Ԑ=MARR).arrow_forwardCapital Investment Annual Revenues Annual Expenses MV at end of useful life Useful Life IRR Alternative 1 $16,000 $7,000 $2,400 $1,600 4 years 9.1% Alternative 2 $23,000 $13,000 $5,000 $600 12 years 33.7% □arrow_forwardNadine Chelesvig has patented her invention. She is offering a potential manufacturer two contracts for the exclusive right to manufacture and market her product. Plan A calls for an immediate single lump sum payment to her of $200,000. Plan B calls for an annual payment of $16,000 plus a royalty of $0.60 per unit sold. The remaining life of the patent is 10 years. Nadine uses a MARR of 10%/year. What must be the uniform annual sales volume of the product for Nadine to be indifferent between the contracts, based on an annual worth analysis? unitsarrow_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
Difference between Renewable and Nonrenewable Resources; Author: MooMooMath and Science;https://www.youtube.com/watch?v=PLBK1ux5b7U;License: Standard Youtube License