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 8, Problem 31P
To determine
Calculate the equivalent annual worth.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
what is the EUAC corresponding to an overhaul cost of 4000 at year 3 for a machine with 7 years of useful life? use i=8%
The heat loss through the exterior walls of a certain manufacturing plant is estimated to cost
$29000 at EOY 1. ABC Insulation, Inc., told the owner of the plant that the heat loss can be
reduced by 80% if he is willing to spend $401,000 to install its innovative insulation material.
The cost of heat loss is expected to rise by $2100 per year (uniform gradient) after the next year.
The owner plans to keep the present building for 15 more years. Assume MARR (minimum
acceptable rate of return) is 4% per year.
(a) What is the present equivalent value of the cost savings in the reduction of heat loss for
these 15 years? Round off your final answer to nearest thousand.
(b) Using AW method, would you recommend the owner to install ABC's new insulation
material? Why?
Milwaukee Machine Tool is planning to buy a
machine for S15,000 with a salvage value of 20% of
the initial cost after a life of 10 years. The company
estimates it will need $900 for supplies, $250 for
maintenance, $100 for utilities and S1,500 for
overhead. They estimate these will increase by S1200,
8%, 10% and $200 respectively over the 10-year
machine life. If interest rate is 5% per year, what is the
net present value of the project?
-$78,301.03
2 -$82,216.08
3 -$93,301.03
-$52,216.08
Chapter 8 Solutions
Engineering Economy (17th Edition)
Ch. 8 - The seasonal energy efficiency ratio (SEER) is 13...Ch. 8 - Prob. 2PCh. 8 - Prob. 3PCh. 8 - Prob. 4PCh. 8 - Prob. 5PCh. 8 - Prob. 6PCh. 8 - Prob. 7PCh. 8 - Prob. 8PCh. 8 - Prob. 9PCh. 8 - Prob. 10P
Ch. 8 - Prob. 11PCh. 8 - Prob. 12PCh. 8 - Prob. 13PCh. 8 - A commercial building design cost 89/square-foot...Ch. 8 - Prob. 15PCh. 8 - Prob. 16PCh. 8 - Prob. 17PCh. 8 - Prob. 18PCh. 8 - Prob. 19PCh. 8 - Prob. 20PCh. 8 - Prob. 21PCh. 8 - Prob. 22PCh. 8 - Prob. 23PCh. 8 - Prob. 24PCh. 8 - Prob. 25PCh. 8 - Prob. 26PCh. 8 - Prob. 27PCh. 8 - Prob. 28PCh. 8 - Prob. 29PCh. 8 - Prob. 30PCh. 8 - Prob. 31PCh. 8 - Prob. 32PCh. 8 - Prob. 33PCh. 8 - Prob. 34PCh. 8 - Prob. 35PCh. 8 - Prob. 36PCh. 8 - Prob. 37PCh. 8 - Prob. 38PCh. 8 - Prob. 39PCh. 8 - Prob. 40PCh. 8 - Prob. 41PCh. 8 - Prob. 42PCh. 8 - Prob. 43PCh. 8 - Your company manufactures circuit boards and other...Ch. 8 - Prob. 45PCh. 8 - Prob. 46PCh. 8 - Prob. 47PCh. 8 - Prob. 48PCh. 8 - Prob. 49SECh. 8 - Prob. 50SECh. 8 - Prob. 51SECh. 8 - Prob. 52CSCh. 8 - Suppose the cost of electricity is expected to...Ch. 8 - Prob. 54CSCh. 8 - Prob. 55FECh. 8 - Prob. 56FECh. 8 - Prob. 57FECh. 8 - Prob. 58FECh. 8 - Prob. 59FECh. 8 - Prob. 60FECh. 8 - Prob. 61FE
Knowledge Booster
Similar questions
- Mrs Right just purchased a new machine and wants to also set aside cash for future maintenance expenses. The machine has a bumper-to-bumper warranty for the first four years. Right estimates that she will need approximately $3,000 per year in maintenance expenses for years 5-10, at which time she will sell the machine. How much money should Right deposit into an account today, at 1% per month, so that she will have sufficient funds in that account to cover her projected maintenance expenses?arrow_forwardRequired information Eight years ago. Ohio Valley Trucking purchased a large-capacity dump truck for $116,000 to provide short-haul earth-moving services. The company sold it today for $45,000. Operating and maintenance costs averaged $10,900 per year. A complete overhaul at the end of year 3 costs an extra $3600. Calculate the annual cost of the truck at /= 8% per year. The annual cost of the truck is $- per year.arrow_forwardSuppose that annual income from a rental property is expected to start at $1,300 per year and decrease at a uniform amount of $60 each year after the first year for the 12-year expected life of the property. The investment cost is $8,600, and iis 8% per year. Is this a good investment? Assume that the investment occurs at time zero (now) and that the annual income is first received at EOY one. Click the icon to view the interest and annuity table for discrete compounding when i = 8% per year. The present equivalent of the rental income equals $ (Round to the nearest dollar.)arrow_forward
- Practice Problem Irene just purchased a new sports car and wants to also set aside cash for future maintenance expenses. The car has a bumper-to-bumper warranty for the first five years. Irene estimates that she will need approximately $2,000 per year in maintenance expenses for years 6-10, at which time she will sell the vehicle. How much money should Irene deposit into an account today, at 8% per year, so that she will have sufficient funds in that account to cover her projected maintenance expenses?arrow_forwardRequired information Assume that 25 years ago your dad invested $320,000, plus $32,000 in years 2 through 5, and $49,000 per year from year 6 on. Determine the annual retirement amount that he can withdraw forever starting next year (year 26), if the $49,000 annuity stopped at year 25. The interest rate being 14% per year. The annual retirement amount is determined to be $arrow_forwardYou are 20 years old. In five years, you will have access to a trust fund that will be worth $20,000 (at the time of access). If you leave that money in an investment account earning 8% per year until you are 60, how much will be in the account?arrow_forward
- Suppose that annual income from a rental property is expected to start at $1,300 per year and decrease at a uniform amount of $60 each year after the first year for the 12-year expected life of the property. The investment cost is $8,600, and i is 8% per year. Is this a good investment? Assume that the investment occurs at time zero (now) and that the annual income is first received at EOY one. Click the icon to view the interest and annuity table for discrete compounding when i = 8% per year. The present equivalent of the rental income equals $ (Round to the nearest dollar.)arrow_forward20 years later, Alex is has $1,000,000 in his investment account. He plans to spend $200,000 each year from his account. How many years would it take before his account is depleted? Use i = 8% per year.arrow_forwardLifetime savings accounts, known as LSAs, allow people to invest after-tax money without being taxed on any of the gains. If an engineer invests $14,000 now and $14,000 each year for the next 10 years, how much will be in the account immediately after the last deposit, provided the account grows by 11% per year? After the last deposit, the balance in the account will be $arrow_forward
- The council members of a small town have decided that the earth levee that protects the town from flooding should be rebuilt and strengthened. The town engineer estimates that the cost of the work at the end of the first year will be $68,000. He estimates that in subsequent years the annual repair costs will decline by $7000, making the second-year cost $61,000; the third-year $54,000, and so forth. The council members want to know what the equivalent present cost is for the first 5 years of repair work if interest is 6%.arrow_forwardA large textile company is trying to decide among three alternatives of sludge dewatering processes. The costs associated with these alternatives are shown below. Alternative Y will need an upgrade of $9700 at the end of year 2. At the end of year 2, alternative Z would be replaced with another alternative Z having the same installed and operating costs. If the MARR is 12% per year, which alternative should be chosen? Alternative Y Installed costs S68500 S48500 $33500 Annual operating costs S6000 S4000 S5000 Overhaul cost in year 2 $9700 Salvage value (S) [your student ID/10) ID +10 ID- 10 ID- 10 Useful life, years 2.arrow_forwardThe following data for X and Y are in format [XY]. First cost in $: [-80,000,-95,000], Annual cost in $: [-20,000, -15,000], Salvage value in $: [10,000, 30,000], $ Life in years [2,4]. The interest rate is 10% per year. The equation that will calculate the present worth of machine X is: Select one: a. b. O c. PWX = -80,000 - 20,000(P/A, 10%,2) + 10,000(P/F,10%,2) PWX = -80,000 - 15,000(P/A, 10%,4) + 30,000[P/F,10%,4) PWX = -80,000 - 20,000(P/A,10%,4) - 70,000[P/F,10%,2) + 10,000(P/F,10%,4) O d. PWX = -80,000 - 20,000(P/A, 10%,4) - 80,000(P/F,10%,2) + 10,000 (P/F,10%,4)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