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 3, Problem 2P
To determine
Write the cost and revenue types.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Middleton Corp. lends cash and accepts a $1,700 note receivable that offers 7% interest and is due in six months. How much interest revenue will be?
Solve with complete solution and draw the cash flow diagram
You purchased a building five years ago for $200,000. Its annual maintenance expense has been $15,000 per year. At the end of three years, you spent $55,000 on roof repairs. At the end of five years (now), you sell the building for $250,000. During the period of ownership, you rented out the building for $60,000 per year paid at the beginning of each year. If your MARR is 8% per year.
a) Use the PW and AW methods to evaluate this investment. PW = $____ and AW = $____
b) Calculate IRR and ERR(( Ԑ=MARR). IRR = Blank ____% and ERR = Blank ____%
Note: For equivalent worth, round off the final answer to whole number. For Rate of Return, round off to two decimal places (in percentage)
Subject: Engineering Economics
An earth compactor costs Rs. 2,00,000 and has an economic life of 9 years. However, the purchaser needs it for only one project that will be completed in 3 years. At the end of the project, it can be sold for one-half its purchase price. What is the annual cost to the owner, if the required rate of return is 12 percent.
Chapter 3 Solutions
Engineering Economy (16th Edition) - Standalone book
Ch. 3 - Prob. 1PCh. 3 - Prob. 2PCh. 3 - Prob. 3PCh. 3 - Prob. 4PCh. 3 - Prob. 5PCh. 3 - Prob. 6PCh. 3 - Prob. 7PCh. 3 - Prepare a composite (weighted) index for housing...Ch. 3 - Prepare a composite (weighted) index for housing...Ch. 3 - Prob. 10P
Ch. 3 - Prob. 11PCh. 3 - Prob. 12PCh. 3 - Prob. 13PCh. 3 - Prob. 14PCh. 3 - Prob. 15PCh. 3 - A biotech firm is considering abandoning its old...Ch. 3 - Prob. 17PCh. 3 - Prob. 18PCh. 3 - Prob. 19PCh. 3 - Prob. 20PCh. 3 - Prob. 21PCh. 3 - Prob. 22PCh. 3 - Prob. 23PCh. 3 - Prob. 24PCh. 3 - Prob. 25PCh. 3 - Prob. 26PCh. 3 - Prob. 28SECh. 3 - Prob. 31CSCh. 3 - Prob. 32CSCh. 3 - Prob. 36FECh. 3 - Prob. 37FECh. 3 - Prob. 38FECh. 3 - Prob. 39FECh. 3 - Prob. 40FECh. 3 - Prob. 41FE
Knowledge Booster
Similar questions
- ENGINEERING ECONOMY (ALREADY ANSWERED IN BARTLEBY. PLEASE DO NOT COPY) RATE WILL BE GIVEN. WRITE THE COMPLETE SOLUTIONS/EXPLANATION LEGIBLY OR TYPEWRITTEN. GIVE EXPLANATION TO EACH STEPS/PROCEDURE. You have just moved to a new country to take up a two-year assignment. You need to buy a car and are deciding between a new one that costs $20,000 and a threeyear-old one that costs $9,000. The used car has an odometer reading of 25,000 miles. You have $10,000 in savings, and can borrow the rest from your company, repaying them 110% after two years. The value of the new car will depreciate by 50% in two years, while that of the used car will depreciate by one-third. What should you do? Use the seven-step procedure to analyze your situation. Identify the principles that accompany each step.arrow_forwardYou own an apartment complex with 85 bedroom units. Each unit rents for $1250/mo. Annual costs to operate the complex is $1M. If the vacancy rate is 5%, what profit do you earn per year?arrow_forwardA computer hardware firm sells both laptop computers and printers. It has a large inventory of laptops and printers that it wants to sell, so it has not variable production cost. The firm has determined that there are three type of consumers for its products Laptop Printer Bundle (Laptop + printer) Customer type A $800 S100 $900 Customer type B S1,000 $50 $1,050 Customer type C S600 $150 $750 To simplify the analysis, you may assume that there is one customer of each type. (a) If the firm were to charge only individual prices and not the bundle price, what price should it charge for its laptops and what price should it charge for its printers in order to maximize revenue? Assume that the firm has one customer of each type. Please explain. (b) If the laptop and printer are bundled together, what price will the firm charge for the bundle in order to maximize revenue? Assume that only the bundle is sold and the laptop and printer are not available separately. Please explain. (c) Assume…arrow_forward
- Engineering Econ: Recently, you were in a car crash and are looking to decide whether to purchase a gas-powered Toyota RAV4 or the RAV4 hybrid that uses both gasoline and electric power. The traditional, gas-powered RAV4 sells for $26,000 and gets 22 miles per gallon (mpg) of fuel. The hybrid vehicle sells for $32,000 and averages 34 mpg. The resale value of the hybrid RAV4 is $4,000 more than that of the traditional RAV4 after five years of anticipated ownership. Assume that you badly need a new car (since insurance will only cover a rental for so long), such that both alternatives are acceptable; as such, you can consider the traditional RAV4 the baseline for comparison. If you drive 15,000 miles per year and gasoline costs $2.50 per gallon, what is the annual internal rate of return associated with the incremental investment in the hybrid RAV4? (Express your answer as a percentage, rounded to the nearest tenth of a percent, e.g., 17.5 if you believe the answer is 17.5% per year.)arrow_forwardFor a table manufacturing company, selling price for a table is $188.00 per Unit, Variable cost is $28.00 per Unit, rent is $4, 670.00 per month and insurance is $ 271.00 per month. Company wants to expand its business and improve the table quality, it wants to increase the selling price for a table to $350.00 per Unit, Variable cost to $48.00 per Unit, bigger area will have rent $6, 537.00 per month and insurance is $406.00 per month At what point will the company be indifferent between the current mode of operation and the new option?arrow_forwardA process has a cycle time of 10 minutes. The throughput time is 10 hours. If the throughput time is reduced to 5 hours without changing the cycle time, what is the change in inventory (as a percentage)?arrow_forward
- 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?arrow_forwardCindy and Steven are recently married and are both chefs. They have recently graduated from culinary school and are making a starting salary of $15.00 as a sous-chef. They both work 10 hour days, six days a week. Because they are chefs at a mid- level restaurant they live in the downtown core where it is located. The rent on their one bedroom apartment is $1125/month. This includes all utilities. However, they pay an additional $75 for cable and internet. Their joint cell phone bill is $60.00 and they opt not to have a landline to save money. Because they live downtown they have also chosen not to buy a car and spend about $200 a month on public transportation. They eat most meals for free at the restaurant where they work so their grocer bill is only about $200 a month. Do Cindy and Steven earn enough money to cover their expensesarrow_forward1) A company manufactures electrical metering devices that monitor power quality. The company's fixed cost is $68,000 per month. The variable cost is $80 per metering device. The selling price per device can be modeled by S = 170 – 0.05 Q where S is the selling price and Q is the number of metering devices sold. How many metering devices must the company sell per month in order to realize a maximum profit? Draw cash flow diagram.arrow_forward
- ECONOMICS A logistic analysis indicates that if a new bridge across the Cumberland River is constructed near a busy highway intersection in the commercial part of a mid-western town, the transportation cost of delivery trucks can be saved significantly. Logistics TransNet Industrial Consortium estimates that the construction (first) cost of the bridge is $1,900,000 and annual upkeep is estimated to be $25,000 per year. In addition to annual upkeep, major maintenance work is anticipated every ten years at a cost of $350,000 per occurrence. Annual savings in transportation cost is expected to be $150,000 per year. The salvage value of this bridge is negligible. The Consortium uses a MARR of 8% per year. Suppose that the bridge has a useful life of 30 years, what is the exact rate of return of this bridge construction?arrow_forwardAssume you are 25 years old and you are professionally employed. You are approached by two investment providers. Investment provider A guarantees you an annual payment of 325000 Rand (at current value) post retirement age of 65, increasing at a rate of 5% for 20 years after retirement age. Investment provider B guarantees you an annual payment of 375000 Rand (at current value) post retirement age of 65, increasing at a rate of 5% for 15 years after retirement age. Note: First payout is at age 66. Assume average annual inflation pre-retirement and post-retirement to be 7% and average investment growth to be 9%. Calculate the annual payments that need to be paid to the investment providers.arrow_forwardPlease see the attached29arrow_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