Engineering Economy (16th Edition) - Standalone book
16th Edition
ISBN: 9780133439274
Author: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 9, Problem 25P
To determine
Replacement of the defender.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
For P500, 000, an engineer purchased a piece of equipment. He added another P40,000 to his budget for installation and other costs. The equipment's expected useful life is ten years. The salvage value is x% of the original cost. The book value at the end of five years using the straight line technique will be P300,500. What is the numerical value of x?
solve it using manual computation; do not use Microsoft Excel
The Ajax Corporation has an overhead crane that has an estimated remaining life of 10 years. The crane can be sold now for $8,000. If the crane is kept in service, it must be overhauled immediately at a cost of $5,000. Operating and maintenance costs will be $3,000 per year after the crane is overhauled. The overhauled crane will have zero MV at the end of the 8-year study period. A new crane will cost $20,000, will last for 8 years, and will have a $4,000 MV at that time. Operating and maintenance costs are $1,000 per year for the new crane. The company uses a before-tax interest rate of 10% per year in evaluating investment alternatives. Should the company replace the old crane?
one factory manager bought a rare machine for $10 million. It is estimated that the sales value of the machine at the end of the first year will be $3 million and the machine will be worth $500,000 due to the demand by the antique dealers. The maintenance cost is expected to be $300,000 in the first 3 years and double each year thereafter. In this way, the maintenance cost of the 4th year is $600,000, the maintenance cost of the 5th year is $1,200,000, etc. Calculate the economic life of this machine based on a 15% MCVO.
A) 7
B) 3
C)12
D) 6
E) 9
Chapter 9 Solutions
Engineering Economy (16th Edition) - Standalone book
Ch. 9 - Prob. 1PCh. 9 - Prob. 2PCh. 9 - Prob. 3PCh. 9 - Prob. 4PCh. 9 - Prob. 5PCh. 9 - Prob. 6PCh. 9 - Prob. 7PCh. 9 - A city water and waste-water department has a...Ch. 9 - Prob. 9PCh. 9 - Prob. 10P
Ch. 9 - Prob. 11PCh. 9 - Prob. 12PCh. 9 - Use the PW method to select the better of the...Ch. 9 - Prob. 14PCh. 9 - Prob. 15PCh. 9 - Prob. 16PCh. 9 - Prob. 17PCh. 9 - Prob. 18PCh. 9 - Prob. 19PCh. 9 - Prob. 20PCh. 9 - Prob. 21PCh. 9 - Prob. 22PCh. 9 - Prob. 23PCh. 9 - Prob. 24PCh. 9 - Prob. 25PCh. 9 - Prob. 26PCh. 9 - Prob. 27SECh. 9 - Prob. 28SECh. 9 - Prob. 29CSCh. 9 - Prob. 30CSCh. 9 - Prob. 31CSCh. 9 - Prob. 32FECh. 9 - Prob. 33FECh. 9 - Prob. 34FECh. 9 - Prob. 35FECh. 9 - Prob. 36FE
Knowledge Booster
Similar questions
- A process plant making 5000 kg/day of a product selling for $1.75/kg has annual variable production cost of $2M at 100 % capacity and fixed costs of $700,000. What is the fixed cost per kg at the break even point ? If the selling price of the product is increased by 10%, what is the dollar increase in net profit at full capacity if the income tax rate is 35% of the gross earnings?arrow_forwardDo not use the excel pv, pmt and fv functions for this question. Automobiles of the future will most likely be manufactured largely with carbon fibers made from recycled plastics, wood pulp, and cellulose. Last year (year 0), Carbon Manufacturing Company purchased a piece of equipment with $50,000 for research on this. The useful life of the machine is 12 years, at the end of which, the machine is estimated to have a $10,000 salvage value. The new machine generates annual revenues of $9,500. The annual operating and maintenance expenses are estimated to be $2,500. If the organization's MARR is 6%, calculate the following: 1. a) Draw the cash flow diagram for the project. 2. b) Calculate the present worth of the project. 3. c) Calculate the annual worth of the project. 4. d) Calculate the future worth of the projectarrow_forwardA- The fuel cost ($/h) for the two generating units in a certain plant are given by: 2 F, = 0.06P, + 8.0P, + 135 and 1 2 F2 = 0.09P, +7.0P,+165 If both units operate at all times. The minimum load on each of them is P MW where P is the last two digits (from right) of your registration number (i.e for the student that has a registration number 202112396, P =96). The maximum loads on each unit 750 MW. 1- For a total plant load of 2*P, calculate the power supplied by each unit for economically dispatch. 2- For a total plant load of 800 MW, calculate the power supplied by each unit for economically dispatch. 3- For the case of a total plant load of 800 MW, find the saving for the economic dispatch compared with the equal distribution of total load between the two units. B- After load flow solution of a certain 5-bus power system, it is found that voltages at buses 4 and 5 are: V4 = 0.9311 +j 0.2529 pu and V5 = 0.9411 +j 0.2265 pu. %3D If the last row of the (5*5) impedance matrix for this…arrow_forward
- Michelin is considering going ‘‘lights-out’’ in the mixing area of the business that operates 24/7. Currently, personnel with a loaded cost of $590,000per year are used to manually weigh real rubber, synthetic rubber, carbon black, oils, and other components prior to manual insertion in a Banbary mixer that provides a homogeneous blend of rubber for making tires (rubber products). New technology is available that has the reliability and consistency desired to equal or exceed the quality of blend now achieved manually. It requires an investment of $2,250,000, with $93,000 per year operational costs and will replace all the manual effort described above. The planning horizon is 8 years, and there will be a $275,000 salvage value at that time for the new technology. Marginal taxes are 25%, and the after-tax MARR is 10%. The new investment relates to the 7-Year Property Class. Part a Determine the annual cost of purchasing the new technology. $enter a dollar amount Carry all interim…arrow_forwardThe fuel inputs per hr of plant-1 and plant-2 are given as F1 = 0.4P12 + 80 P1 +240 OMR/hr %3D F2 = 0.5P12 + 60 P2 +300 OMR/hr %3D Determine the economic operating schedule corresponding cost generation if the total load is 360MW.Neglect the line losses and generator limits. P1 = 188.89 %3D P2 = 171.11 Total Cost = 54,829.12 OMR / hr %3D P1 = 189.89 %3D P2 = 170.11 Total Cost = 52,629.12 OMR / hr %3D None P1 = 185.89 %3D P2 = 174.11 Total Cost = 58,429.12 OMR / hrarrow_forwardA commercial 3D printer is purchased for $ 380,000. The salvage value of the printer decreases by 35% each year that it is held. The cost to operate and maintain the machine the first year it is used is $ 12,500; these costs increase by $ 4,000 each year. What is the optimal replacement interval and minimum EUAC for the printer, assuming a MARR of 10% is used?arrow_forward
- A4-5 A production facility is currently utilizing carbon steel tubing. The current process will require the injection of chemicals to control tubing corrosion due to high temperatures, pressures, and corrosive chlorides in the transported product. It is proposed to replace the car- bon steel that cost $12 per foot with an installation cost of $125,000 last year, with a chrome stainless steel tubing that would cost $68 per foot today (time zero). 20,000 feet of tubing would be required and installation costs are estimated to total $500,000 (also at time zero). Annual cost savings in chemicals, labor, and chemical injection equip- ment are projected to be $550,000 in year one. The year one savings would escalate at an annually compounded rate of 7% per year beginning in year 2. For simplicity, use a 6-year evaluation life with a salvage value of zero at the end of year 6. Assume a 15% minimum ROR. Identify the two mutually exclusive service alternatives in time diagram format and…arrow_forwardA company has been ordered by OSHA to install new safety equipment in an R&D laboratory. It has been determined that either of the two following alternatives will meet the appropriate requirements:arrow_forwardVeritas Inc. has decided to acquire a new Hydraulic Excavator. It has three options. Caterpillar: purchase cost of $354,055 and operating costs of $28,121 per year (paid at the end of each year). John Deere: purchase cost of $288,413 and operating costs of $21,091 per year (paid at the end of each year). Volvo: purchase cost of $323,238 and operating costs of $15,484 per year (paid at the end of each year). Assume that Geek Inc. has a budget of $335,269 and all excavators have a service life of 13 years. Based on the defender-challenger approach and given that the MARR is 10%, compute the incremental Benefit-Cost ratio of choosing the best excavator (note: round your answer to two decimal places; do not include spaces, dollar signs, or commas). Indicate your recommendation as follows: - answer "0" (without the commas) if your recommendation is the Caterpillar; - answer "1" (without the commas) if your recommendation is the John Deere; - write down as your answer the value of the…arrow_forward
- A client has an existing CAD/CAM system that costs $95,000 per year to lease (payable at the end of each year of use) and a new contract the client is considering entering will fix the price for over the next four years. The client is also considering purchasing a CAD/CAM system to replace its currently leased system (rather than renewing / entering a new lease contract). The new system will cost $450,000 to purchase and install. The system has an estimated life of five years, when it is expected to become obsolete, but it will have a salvage value of $25,000. The interest rate is projected to be 6% per year during the life of the project. a. Draw a cash flow diagram for the next four years for the existing system (leased system) and a separate cash flow diagram for the system that is being considered for purchase. b. For each option (leasing and buying), calculate the value of all cash receipts and disbursements at the end of the third year. c. Compare the value of each option at…arrow_forwardAn engineer calculated the AW values shown for retaining a presently owned machine additional years. A challenger has an ESL of 4 years with AW = $-60,000 per year. Assuming all future costs remain the same, when should the company replace the defender? The MARR is 12% per year. Assume used machines like the one presently owned will always be available. Years Retained 12345 a) at year 5 b) at year 4 c) at year 1 d) at year 3 AW of Defender, $ -77,000 -63,000 -58,000 -64,000 -70,000arrow_forwardplease answer in text form and in proper format answer with must explanation , calculation for each part and steps clearlyarrow_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:PEARSON
Engineering 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 Learning
Managerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage Learning
Managerial 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