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
Question
Chapter 6, Problem 52P
To determine
Calculate the present worth.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
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 or
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 years
Vidhi is investing in some rental property in Collegeville and is investigating her
income from the investment. She knows the rental revenue will increase each year, but
so will the maintenance expenses. She has been able to generate the data that follows
regarding this investment opportunity. Assume that all cash flows occur at the end of
each year and that the purchase and sale of this property are not relevant to the study.
• If Vidhi's MARR = 6% per year, is this investment a profitable undertaking? Use
Future Worth method!
Year Revenue Year Expenses
1
$6,000 1
$3,100
2
6,200
2
3,300
6,300
3
3,500
6,400
4
3,700
6,500
5
3,900
6,600 6
6,100
6,700
7
4,300
6,800 8
4,500
6,900
4,700
7,000
4,900
3
4
5
6
7
8
9
10
9
10
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
Similar questions
- Two electric motors (A and B) are being considered to drive a centrifugal pump. Each motor is capable of delivering 40 horsepower (output) to the pumping operation. It is expected that the motors will be in use 800 hours per year. If electricity costs $0.08 per kilowatt-hour and 1 hp = 0.746 kW, which motor should be selected if MARR = 6% per year? Refer to the data below. The AW for Motor A is $ Initial Cost Electrical Efficiency Annual Maintenance 5 years Click the icon to view the interest and annuity table for discrete compounding when the MARR is 6% per year. (Round to the nearest dollar.) Motor A $1,700 0.75 $50 Life Motor B $900 0.55 $80 5 yearsarrow_forwardAlternative A and B are two mutually exclusive cost alternatives, and one of them must be selected. Using Incremental Analysis, which of the alternatives should be recommended based on ERR (the External Rate of Return)? · MARR (Minimum acceptable rate of return) is 12% per year while the re-investment rate is 10% per year. The study period is 20 years. Assume repeatability is appropriate for this comparison. Alternative A B $ (101,000) $ (6,000) 20 years $ (6,000) $ (18,500 ) 10 years Initial capital investment Annual operating expenses Useful life Salvage value None Nonearrow_forwardTwo 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.arrow_forward
- BREAK-EVEN ANALYSIS Consider a hybrid vehicle with a price of $30,000. This vehicle will average 30 miles per gallon of gasoline. A comparably equipped gasoline-only vehicle will cost $28,000 and will average 25 miles per gallon of gasoline. Assuming an interest rate of 3% per year and a study period of five years, find the breakeven cost of gasoline ($/gal) if the vehicle will be driven 18,000 miles each year.arrow_forwardTwo small engines are designed to help cleaning operation in a petrochemical company. Both seem to be very promising and we need to decide which is better or conditions to make the choice indifferent. COSTS ENGINE 1 Installation/First Costs $ 1,500,000 Operating Costs $/year Salvage Value $ Life in years ENGINE 2 2,250,000 700,000 600,000 100,000 50,000 18 8 If a MARR of 10% per year is provided, then compare Annual Worth and select: [Select] Determine the SALVAGE VALUE for Engine 2 that would make Any choice INDIFFERENT: [Select]arrow_forwardWHICH IS MORE ECONOMICAL? USE METHOD OF COMPARISON OF ALTERNATIVES! In a cold storage plant, it is desired to determine whether to use insulation two inches thick or three inches thick in insulating the walls of the cold storage ware house. Heat absorb through the walls without insulation would cost P96.00 per year per squaremeter. A two-inch insulation will cost P30.40 per square meter and will cut out 89% of the loss. A three-inch insulation will cut out 92% of the loss and will cost P65.00 per square meter. Using a life 15 years for the insulation with no salvage value and a minimum attractive return of 8%, what thickness of insulation should be used?arrow_forward
- One of the mutually exclusive alternatives below must be selected. Base your recommendation on A(Sauer-Glock) cash flows when the MARR=6% per year Q EOY a EOY P/5 ♡ 10 20 0 10 J 20 P 2P Glock 40 Sauer 45 The IRR on A(Sauer-Glock) is 13% (Round to two decimal places)arrow_forwardMARR is 8%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 $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
- Carlisle Company has been cited and must invest in equipment to reduce stack emissions or face EPA fines of $18,500 per year. An emission reduction filter will cost $75,000 and have an expected life of 5 years. Carlisle’s MARR is 10 %/year.arrow_forwardCarlisle Company has been cited and must invest in equipment to reduce stack emissions or face EPA fines of $22,500 per year. An emission reduction filter will cost $95,000 and will have an expected life of 5 years. Carlisle’s MARR is 9 %/year. What is the present worth of this investment? $Carry all interim calculations to 5 decimal places and then round your final answer to the nearest dollar. The tolerance is ±5.arrow_forwardThe PW-based relation for the incremental cash flow series to find A/* between the lower first-cost alternative X and alternative Y has been developed. 0=-38,000+9000(P/A‚¡ *,10) + (-2000(P/F,Ai*,10)) Determine the highest MARR value for which Y is preferred over X. Any MARR value less than % favors Y.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