Contemporary Engineering Economics (6th Edition)
6th Edition
ISBN: 9780134105598
Author: Chan S. Park
Publisher: PEARSON
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Chapter 6, Problem 6P
To determine
Calculate the annual worth.
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Consider the cash flows represented in the figure below and compute the equivalent annual worth at i = 12%.
$140
$190
$190
$90
$80
2
ans-($12.088256)
1
3
4
5
6
$170
$260
Consider the accompanying cash flow diagram represented below. Compute the equivalent annual worth at i= 9%.
$21,000
Answer- $3681.26
Years
1
3
4
6
$4,000 $4,000
$7,000
$10,000,
$13,000
$16,000
Consider the accompanying cash flow diagram. Compute the equivalent annual
worth at i
=
13%.
0
$2,000
$8,000
$3,000
1 2
$4,000
$4,000
$5,000
3 4
Years
$6,000
$7,000
$4,000
5 6
$1,000
Ans: $ 627.5
Chapter 6 Solutions
Contemporary Engineering Economics (6th Edition)
Ch. 6 - Prob. 1PCh. 6 - Prob. 2PCh. 6 - Prob. 3PCh. 6 - Prob. 4PCh. 6 - Prob. 5PCh. 6 - Prob. 6PCh. 6 - Consider the cash flows in Table P6.7 for the...Ch. 6 - Prob. 8PCh. 6 - Prob. 9PCh. 6 - The repeating cash flows for a certain project are...
Ch. 6 - Beginning next year, a foundation will support an...Ch. 6 - Prob. 12PCh. 6 - Prob. 13PCh. 6 - Prob. 14PCh. 6 - Prob. 15PCh. 6 - Prob. 16PCh. 6 - Prob. 17PCh. 6 - Prob. 18PCh. 6 - The Geo-Star Manufacturing Company is considering...Ch. 6 - Prob. 20PCh. 6 - Prob. 21PCh. 6 - Prob. 22PCh. 6 - Prob. 23PCh. 6 - Prob. 24PCh. 6 - Prob. 25PCh. 6 - Prob. 26PCh. 6 - Prob. 27PCh. 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 - Prob. 36PCh. 6 - Prob. 37PCh. 6 - Prob. 38PCh. 6 - Prob. 39PCh. 6 - Prob. 40PCh. 6 - Prob. 41PCh. 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. 1STCh. 6 - Prob. 2STCh. 6 - Prob. 3STCh. 6 - Prob. 4ST
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- Consider the accompanying cash flow diagram represented below. Compute the equivalent annual worth at i = 9%. $21,000 Years Tum 1 2 3 4 0 $4,000 $4,000 $7,000 5 I I $10,000 $13,000 6 $16,000arrow_forwardYou are considering buying a company for $699, 000. If you expect the business to earn $97,000 per year, how long is the discounted payback period if your MARR is 5% ? (in years)arrow_forwardFind the Future Worth (F) of the following geometric series cash flow: 0 1 1000 i = 10% 23 4 1100 1210 g= 10% 10 2,358arrow_forward
- 12.Find the equivalent worth of the following cash flow at t=0 if the interest rate is 12% 0 1 1000$ 2 3 1500$ 2000$ 9arrow_forwardDetermine the equivalent value of x from the cash flow indicated in the diagram on the left side. 2 G₁ 7 59 10 i% Xarrow_forwardThe manager of Automated Products is contemplating the purchase of a new machine that will cost$300,000 and has a useful life of five years. The machine will yield (year-end) cost reductions toAutomated Products of $50,000 in year 1, $60,000 in year 2, $75,000 in year 3, and $90,000 in years4 and 5. What is the present value of the cost savings of the machine if the interest rate is 8 percent?arrow_forward
- Consider the accompanying cash flow diagram below. Compute for the equivalent annual worth at i=12%. 7,000 6,000 4,000 5,000 3,000 2,000 2 4 1,000 4,000 4,000 8,000arrow_forwardYou are being asked to evaluate the worthiness of an investment that requires you to spend $120,000 today in return for receiving $25,000 each year for seven years (starting one year from now). At the end of the seven year study period, the investment can be sold for $10,000. The MARR = 12% per year. Compute the AW of this investment. Round your answer to the nearest dollar. Answer should be -301arrow_forwardIt is estimated that a certain piece of equipment can save $22,000 per year in labor and materials costs. The equipment has an expected life of five years and no market value. If the company must earn a 5% annual return on such investments, how much could be justified now for the purchase of this piece equipment?arrow_forward
- Suppose that you purchase a tractor for $170,000 and sell it in 10 years for $50,000. What is the annualized cost (capital recovery) if your required return on capital is 12%?arrow_forwardGarnette Corp is considering the purchase of a new machine that will cost $342,000 and provide the following cash flows over the next five years: $99,000, $88,000, $92,000. $87,000, and $72,000. Calculate the IRR for this piece of equipment. For further instructions on internal rate of return in Excel. see Appendix C.arrow_forwardCleanville Environmental Services is considering investing in a new water treatment system. On the basis of the information given below for two alternatives, a fully automated and a partially automated system, construct a spreadsheet for computing the annual worths for each alternative with a variable MARR. Through trial and error, determine the MARR at which the annual worth of the two alternatives is equivalent. Year 0 1 2 3 4 5 6 7 8 9 10 Fully Automated System Disburse- ments $1 000 000 30 000 30 000 80 000 30 000 30 000 80 000 30 000 30 000 80 000 30 000 Net Cash Flow 0 - $1 000 000 270 000 270 000 220 000 270 000 270 000 220 000 270 000 270 000 220 000 270 000 Receipts $ 300 000 300 000 300 000 300 000 300 000 300 000 300 000 300 000 300 000 300 000 Partially Automated System Disburse- ments $650 000 30 000 30 000 35 000 35 000 40 000 40 000 45 000 45 000 50 000 50 000 Net Cash Flow Receipts $ 0 - $650 000 220 000 190 000 220 000 190 000 220 000 185 000 220 000 185 000 220 000…arrow_forward
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