Basics Of Engineering Economy
2nd Edition
ISBN: 9780073376356
Author: Leland Blank, Anthony Tarquin
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Chapter 6, Problem 60APQ
To determine
Lowest
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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 $43,000 and annual costs of $18,000. Annual revenue was
$27,000 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
4.51 %.
Janice V. bought a 6% $1000 20-year bond for $825. She received a semiannual dividend for 8 years, then sold it immediately after
the sixteenth dividend for $850. What rate of return did she make per semiannual period, and per year (nominal)?
The rate of return that she made per semiannual period is
The rate of return that she made per year is
%.
A start-up chemical company has an average cost of capital of 15% per year.Additionally, it has a long-term goal of making at least a 20% per year rate of return onall investments; however, because of market opportunity the ROR can be reduced for thecurrent project by 3%. If the company acquired $50 million in venture capital, how muchdid it have to earn in the first year?
Chapter 6 Solutions
Basics Of Engineering Economy
Ch. 6 - Prob. 1PCh. 6 - Prob. 2PCh. 6 - Prob. 3PCh. 6 - Prob. 4PCh. 6 - Prob. 5PCh. 6 - Prob. 6PCh. 6 - Prob. 7PCh. 6 - Prob. 8PCh. 6 - A University of Massachusetts study found that...Ch. 6 - Prob. 10P
Ch. 6 - The Closing the Gaps initiative by the Texas...Ch. 6 - Prob. 12PCh. 6 - Prob. 13PCh. 6 - Prob. 14PCh. 6 - Prob. 15PCh. 6 - Prob. 16PCh. 6 - Prob. 17PCh. 6 - Prob. 18PCh. 6 - Prob. 19PCh. 6 - Prob. 20PCh. 6 - Prob. 21PCh. 6 - Prob. 22PCh. 6 - Prob. 23PCh. 6 - Prob. 24PCh. 6 - Prob. 25PCh. 6 - A company that manufactures rigid shaft couplings...Ch. 6 - For each of the following scenarios, state whether...Ch. 6 - Prob. 28PCh. 6 - Prob. 29PCh. 6 - Prob. 30PCh. 6 - Prob. 31PCh. 6 - Prob. 32PCh. 6 - Prob. 33PCh. 6 - Prob. 34PCh. 6 - Prob. 35PCh. 6 - The four alternatives described below are being...Ch. 6 - Prob. 37PCh. 6 - Prob. 38PCh. 6 - Ashley Foods, Inc. has determined that only one of...Ch. 6 - Five revenue projects are under consideration by...Ch. 6 - Four different machines are under consideration...Ch. 6 - Prob. 42PCh. 6 - Prob. 43PCh. 6 - Prob. 44PCh. 6 - Prob. 45PCh. 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 - Prob. 54PCh. 6 - Prob. 55PCh. 6 - Prob. 56PCh. 6 - Prob. 57PCh. 6 - Prob. 58PCh. 6 - Prob. 59PCh. 6 - Prob. 60APQCh. 6 - Prob. 61APQCh. 6 - Prob. 62APQCh. 6 - Prob. 63APQCh. 6 - Prob. 64APQCh. 6 - Prob. 65APQCh. 6 - Prob. 66APQCh. 6 - Prob. 67APQCh. 6 - Prob. 68APQCh. 6 - Prob. 69APQCh. 6 - Prob. 70APQ
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- A plastics company is considering two injection molding processes. Process X will have a first cost of $600,000, annual costs of $200,000, and a salvage value of $100,000 after 5 years. Process Y will have a first cost of $800,000, annual costs of $150,000, and a salvage value of $230,000 after 5 years. (a) What is the rate of return on the increment of investment between the two? (b) Which process. should the company select on the basis of a rate of return analysis, if the MARR is 20% per year?arrow_forwardAn investment of $100,000 resulted in income of $25,000 per year for 10 years. The rate of investment was closest to, (A) 25% 15% 21% 17%arrow_forwardE4 An engineer at Delphi Systems is considering the projects below, all of which can be considered to last indefi nitely. The companyās MARR is 13% per year. (a) Determine which projects should be selected on the basis of IROR if the budget limitation is $39,000. (b) What is the overall rate of return if the money not invested in projects is assumed to earn a rate of return equal to the MARR?arrow_forward
- In comparing alternatives, What is rate of return (ROR)?arrow_forwardHow is the decision procedure used when comparing two or more mutually exclusive projects on the basis of the rate-of-return measure?arrow_forwardChemCo 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?arrow_forward
- Answer the following question with completeĀ SOLUTIONSĀ andĀ CASH FLOW DIAGRAM. An engineer launches a project in the country's top technohub. This involves rental of a computer unit for online class students. He felt that because of the density of students in the area, 90% of his 30-units will be occupied per sem (5 months each) per year. He desires a rate of return of 20%. Other pertinent data are the following: Assess the project using (1)Ā ROR, (2)Ā PresentĀ Worth Method, and (3)Ā Future Worth Method. (4) Estimate theĀ payback periodĀ of this project.arrow_forwardThe Engineering Economist is a quarterly journal that once cost $20 for 1 year, $38 for 2 years, or $56 for 3 years. (a) Ā What is the IRR for subscribing for 2 years rather than for 1 year at a time? (b) Ā What is the IRR for subscribing for 3 years rather than for 1 year at a time?arrow_forwardAlternative Overall Incremental Rate Of Return in % When Initial Alternative Investment,$ Rate of Return, % Compared with Alternative A Š A - 40,000 29 B - 75,000 15 1 -100,000 16 7 20 D -200,000 14 10 13 12 If the alternatives are independent, which should be selected if the company's MARR is 15% per year? (Include: procedure and explain) O Only alternative A O Alternatives A and B O Alternatives A and C Alternatives A, B, and C O Oarrow_forward
- ABZ is a manufacturer of household appliances. Over a 5-year period, the costs associated with one product line were as follows: first cost of $30,000 and annual costs of $18,000. Annual revenue was $27,000, and the used equipment was salvaged for $4000. What rate of return did the company make on this product?.arrow_forward1) All engineering economy problems involve the element of time n and interest rate i Select one: True False 2) In practice, interest rates do not stay the same over time unless by contractual obligation. Select one: True False Ā 3) When interest over a specific time unit is expressed as a percentage of the original amount (principal), the result is called rate of return.Ā Select one: True Falsearrow_forwardwhat's the PW of Alternative A and B?arrow_forward
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