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 67APQ
To determine
Selection of alternatives.
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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 %.
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?
RKI Instruments manufactures a ventilation controller designed for monitoring and controlling carbon monoxide in parking garages, boiler rooms, tunnels, etc. The net cash flow associated with one plant for the first 3 years of operation is shown. (a) What do the two rules about sign changes indicate concerning i* values? (b) Find all rate of return values between 0 and 100%. Year Net Cash Flow, $ 0 ā30,000 1 20,000 2 15,000 3 ā2000
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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- Please answer the follow up questions in part (d) and (f) pleasearrow_forwardThe survey firm of Layer, Anderson, and Pope (MAP) LLP is considering the purchase of a pieceof new GPS equipment. Data concerning the alternative under consideration are presented below.First Cost $28,000Annual Income 7,000Annual Costs 2,500Recalibration at end of Year 4 4,000Salvage Value 2,800If the equipment has a life of eight years and MAPās minimum attractive rate of return (MARR) is5%, what is the annual worth of the equipment?arrow_forwardTwo alternatives for a construction project are being considered. Both projects have a 5-year life. Alternative A's initial cost is $2,260 and yields $355 annually for 5 years. Alternative B initially costs $5500 and yields $1,250 annually for 5 years. The rate of return on the difference between the alternatives is approximately Group of answer choices 3.6% 15% 8% 12%arrow_forward
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- Swagelok Enterprises is a manufacturer of miniature fittings and valves. 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_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_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
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