ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
expand_more
expand_more
format_list_bulleted
Question
Chapter 5, Problem 34P
To determine
To find:Whether automated system or the existing labor-intensive system should be preferred to line G.
Expert Solution & Answer
Answer to Problem 34P
Present worth for labor intensive is less -$432,912than the present worth of automated system which is
Explanation of Solution
Given information:
| LaborintensiveSystem | AutomatedSystem | |
| Initial cost | $0 | $110,000 |
| Installation cost | $0 | $18,500 |
| Firs year O&M cost | $2000 | $4800 |
| Annual increase | $450 | $950 |
| First year labor cost | $72,000 | $47,500 |
| Annual increase | 5% | 5% |
| Salvage value (EOY 15) | 2500 | 20,000 |
Interest rate is
No. of years are
Formula used:
Spreadsheet Function to calculate net present worth
NPV −
CF1:CF2 − Cash flow data range without the initial cost
Calculation:
By using the above-mentioned formula, labor intensive system &automated system’spresent Worth is calculated.
Present worth of labor-intensive system
Present worth of automated system
Present worth for labor intensive is
Want to see more full solutions like this?
Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!
Students have asked these similar questions
Engineering Economics 0008
Please provide a step by step solution for me to understand it well thankyou
ENGINEERING ECONOMICSKyle is a grade 5 student currently taking his modular class at home since the pandemic happened in the lastmonth of the first quarter of that year 2020 here in the Philippines. His Mom Lea tried to invest in Kyle’s future forcollege which saves money of 500PhP twice a month which started at the beginning of the second quarter. Whatwill be the accumulated value after he finished his Senior High School level assuming that the last contributionand his graduation will be held at the end of the second quarter with the equivalent of 8% cost of moneycompounded on the stated period of contribution?a. List the given variablesb. Formula & Complete solution
eBook
A father is now planning a savings program to put his daughter through college. She is 13, plans to enroll at the university in 5
years, and she should graduate 4 years later. Currently, the annual cost (for everything - food, clothing, tuition, books,
transportation, and so forth) is $19,000, but these costs are expected to increase by 5% annually. The college requires total
payment at the start of the year. She now has $10,000 in a college savings account that pays 8% annually. Her father will make
six equal annual deposits into her account; the first deposit today and sixth on the day she starts college. How large must each
the six payments be? (Hint: Calculate the cost (inflated at 5%) for each year of college and find the total present value of those
costs, discounted at 8%, as of the day she enters college. Then find the compounded value of her initial $10,000 on that same
day. The difference between the PV of costs and the amount that would be in the savings account must…
Chapter 5 Solutions
ENGR.ECONOMIC ANALYSIS
Ch. 5 - Prob. 1QTCCh. 5 - Prob. 2QTCCh. 5 - Prob. 3QTCCh. 5 - Prob. 1PCh. 5 - Prob. 2PCh. 5 - Prob. 3PCh. 5 - Prob. 4PCh. 5 - Prob. 5PCh. 5 - Prob. 6PCh. 5 - Prob. 7P
Ch. 5 - Prob. 8PCh. 5 - Prob. 9PCh. 5 - Prob. 10PCh. 5 - Prob. 11PCh. 5 - Prob. 12PCh. 5 - Prob. 13PCh. 5 - Prob. 14PCh. 5 - Prob. 15PCh. 5 - Prob. 16PCh. 5 - Prob. 17PCh. 5 - Prob. 18PCh. 5 - Prob. 19PCh. 5 - Prob. 20PCh. 5 - Prob. 21PCh. 5 - Prob. 22PCh. 5 - Prob. 23PCh. 5 - Prob. 24PCh. 5 - Prob. 25PCh. 5 - Prob. 26PCh. 5 - Prob. 27PCh. 5 - Prob. 28PCh. 5 - Prob. 29PCh. 5 - Prob. 31PCh. 5 - Prob. 32PCh. 5 - Prob. 33PCh. 5 - Prob. 34PCh. 5 - Prob. 35PCh. 5 - Prob. 36PCh. 5 - Prob. 37PCh. 5 - Prob. 38PCh. 5 - Prob. 39PCh. 5 - Prob. 40PCh. 5 - Prob. 41PCh. 5 - Prob. 42PCh. 5 - Prob. 43PCh. 5 - Prob. 44PCh. 5 - Prob. 45PCh. 5 - Prob. 46PCh. 5 - Prob. 47PCh. 5 - Prob. 48PCh. 5 - Prob. 49PCh. 5 - Prob. 50PCh. 5 - Prob. 51PCh. 5 - Prob. 52PCh. 5 - Prob. 53PCh. 5 - Prob. 54PCh. 5 - Prob. 55PCh. 5 - Prob. 56PCh. 5 - Prob. 57PCh. 5 - Prob. 58PCh. 5 - Prob. 59PCh. 5 - Prob. 60PCh. 5 - Prob. 61PCh. 5 - Prob. 62PCh. 5 - Prob. 63PCh. 5 - Prob. 64PCh. 5 - Prob. 65PCh. 5 - Prob. 66PCh. 5 - Prob. 67PCh. 5 - Prob. 68PCh. 5 - Prob. 69PCh. 5 - Prob. 70PCh. 5 - Prob. 71PCh. 5 - Prob. 72PCh. 5 - Prob. 73PCh. 5 - Prob. 74PCh. 5 - Prob. 75PCh. 5 - Prob. 76PCh. 5 - Prob. 77PCh. 5 - Prob. 78PCh. 5 - Prob. 79PCh. 5 - Prob. 80PCh. 5 - Prob. 81PCh. 5 - Prob. 82PCh. 5 - Prob. 83PCh. 5 - Prob. 84PCh. 5 - Prob. 85PCh. 5 - Prob. 86PCh. 5 - Prob. 87PCh. 5 - Prob. 88PCh. 5 - Prob. 89PCh. 5 - Prob. 90PCh. 5 - Prob. 91PCh. 5 - Prob. 92PCh. 5 - Prob. 93PCh. 5 - Prob. 94PCh. 5 - Prob. 95PCh. 5 - Prob. 96PCh. 5 - Prob. 97PCh. 5 - Prob. 98PCh. 5 - Prob. 99PCh. 5 - Prob. 100PCh. 5 - Prob. 101P
Knowledge Booster
Similar questions
- Engineering Economics سنarrow_forwardZiopy is eaming S40.000 per year working for Joe's Car Repair. He also has savings of 5150,000, on which he is eaming 10% annual interest. He decides to leave Joe's Car Repair to invest his savings in starting his own car repair business In the first year, Zippy's Speedy Car Repair eama revenues of $250,000 and has expliot costs of $150,000 Ziooys economic profit for loss) in the frst year in S (Round your answer to the nearest doler)arrow_forwardENGINEERING ECONOMICSMenchie bought his brother a laptop 5 years ago which has a cost of around 25,000PhP. The laptop’s life span willlast until 5 years. She has a friend which is a computer technician who advised her that the laptop’s life span couldextend until 10 years if she could spend semi-annual maintenance of 100Php with a 10Php increase rate startingthe next period of maintenance inspection. How much is the total future cost assuming that the money will havea rate of 2% compounded semi-annually if she decided to enjoy using her laptop beyond the expected life spanupon purchasing?arrow_forward
- Please answer from (d) Take the reference from following answer till solve answer (c).arrow_forwardPlease Solve In 15mins e-harrow_forwardEngineering economic. ecoeco have borrowed $10000 from bank with the understanding that you will pay it off with lump sum of $12000 after 2 years. Find the annual rate of interest on this loan.arrow_forward
- What is engineering economiarrow_forwardPlease explain how to know what formula to use for factor notation in engineering economic. Ex. (F/A,I,n) or (F/P,i,n)arrow_forward1 Uniform Annual Cash Flow An engineer has an Huct uating fut ure budget for the maint enance of a particular machine. During cach of the first 5 years, $10,000 per year will he budget ed. During the second 5 years, the annual budget will be $15,000 per year. In addition, $5000 will be budgeted for an overhaul (major repair) of the machine at end of the 4th year, and again at the end of the 8th year. What uniform annual expenditure (EUAC) would be equivalent, if interest rate is 8% per year?arrow_forward
- One of your asked -amount deposited till which year 59th or 60th birthday? Soo it's amount deposited till 59th birthday...if the answer is not matching with the options, still submit the solution.arrow_forwardGive 5 example of intangible products.arrow_forwardpls provide graph and diagram if necesarry. Thank youarrow_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