Engineering Economy (17th Edition)
17th Edition
ISBN: 9780134870069
Author: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher: PEARSON
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Chapter 8, Problem 44P
Your company manufactures circuit boards and other electronic parts for various commercial products. Design changes in part of the product line, which are expected to increase sales, will require changes in the manufacturing operation. The cost basis of new equipment required is $220,000 (MACRS five-year property class). Increased annual revenues, in year zero dollars, are estimated to be $360,000. Increased annual expenses, in year zero dollars, are estimated to be $239,000. The estimated market value of equipment in actual dollars at the end of the six-year analysis period is $40,000. General price inflation is estimated at 4.9% per year; the total increase rate of annual revenues is 2.5%, and for annual expenses it is 5.6%; the after-tax MARR (in market terms) is 10% per year (im); and t = 25%. (Chapter 7 and 8.3, 8.7)
- a. Based on an after-tax, actual-dollar analysis, what is the maximum amount that your company can afford to spend on the total project (i.e., changing the manufacturing operations)? Use the PW method of analysis.
- b. Develop (show) your ATCF in real dollars.
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Your company manufactures circuit boards and other electronic parts for various commercial products. Design changes in part of the product line, which are expected to increase sales, will require changes in the manufacturing operation. The cost basis of new equipment required is $220,000 (MACRS five-year property class). Increased annual revenues, in year zero dollars, are estimated to be $360,000. Increased annual expenses, in year zero dollars, are estimated to be $239,000. The estimated market value of equipment in actual dollars at the end of the six-year analysis period is $40,000. General price inflation is estimated at 4.9% per year; the total increase rate of annual revenues is 2.5%, and for annual expenses it is 5.6%; the after-tax MARR (in market terms) is 10% per year (im); and t = 39%. (Refer to Chapter 7 and Problem 8.7)
a. Based on an after-tax, actual-dollar analysis, what is the maximum amount that your company can afford to spend on the total project (i.e., changing…
A company is developing a new electronic
product. It expects to spend $38 million on
Research and Development and then another $6
million on Manufacturing Engineering. After
completing all this, the company expects a cost of
$15 per unit to manufacture and plans to build in a
profit of $5 per unit into the price. The company
needs to recover the cost of R&D plus
Manufacturing Engineering over five years
through sales of 4 million units over those five
years. What will the company need to establish as
the sales price for the unit?
Jumbo Company uses 1,100 units of an particular item each year. Carrying the item in inventory costs $200 per unit per year. It costs $150 for each order of the chemical. The firm uses the item at a constant rate each year. Calculate the Economic Order Quantity
AND
Use the data from problem above and assume that Jumbo Company operates 250 days per year. Also assume that its total usage is 1,100 units per year. There is a lead time of 2 days and Jumbo desires to keep a safety stock of 4 units. Calculate the reorder point
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
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