Engineering Economy (16th Edition) - Standalone book
16th Edition
ISBN: 9780133439274
Author: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher: PEARSON
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Chapter 5, Problem 7P
To determine
Calculate the present worth.
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AE Criterion - Single Project*
*Blank & Tarquin (2005). Engineering Economy, 7th edition. Example 6.3.
The owner of a pizza shop plans to purchase and install five portable in-car systems to increase delivery speed and
accuracy. Each system costs $4600, has a 5-year useful life, and may be salvaged for an estimated $300. Total
operating cost for all systems is $1000 for the first year, increasing by $100 per year thereafter.
The owner estimates increased net income of $6000 per year for all five systems. Is this project financially viable at
an MARR of 10%?
A portable concrete test instrument used in construction for evaluating and profiling concrete surfaces (MACRS-GDS 5-year property class) is under consideration by a construction firm for $24,000. The instrument will be used for 6 years and be worth $1,000 at that time. The annual cost of use and maintenance will be $11,000. Alternatively, a more automated instrument (same property class) available from the manufacturer costs $28,500, with use and maintenance costs of only $7,500 and salvage value after 6 years of $2,500. The marginal tax rate is 25%, and MARR is an after-tax 12%.Determine which alternative is less costly, based upon comparison of after-tax annual worth. select an alternative Show the AW values used to make your decision:Alternative 1: $enter a dollar amount Alternative 2:
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Chapter 5 Solutions
Engineering Economy (16th Edition) - Standalone book
Ch. 5.A - Use the ERR method with = 8% per year to solve for...Ch. 5.A - Apply the ERR method with = 12% per year to the...Ch. 5.A - Are there multiple IRRs for the following...Ch. 5.A - Are there multiple IRRs for the following cash...Ch. 5 - Tennessee Tool Works (TTW) is considering...Ch. 5 - Prob. 2PCh. 5 - Prob. 3PCh. 5 - Prob. 4PCh. 5 - Prob. 5PCh. 5 - A large induced-draft fan is needed for an...
Ch. 5 - Prob. 7PCh. 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 - Determine the FW of the following engineering...Ch. 5 - Prob. 22PCh. 5 - Fill in Table P5-23 below when P = 10,000, S = 2,...Ch. 5 - Prob. 24PCh. 5 - A simple, direct space heating system is currently...Ch. 5 - Prob. 26PCh. 5 - Prob. 27PCh. 5 - Prob. 28PCh. 5 - Prob. 29PCh. 5 - Prob. 30PCh. 5 - Prob. 31PCh. 5 - Prob. 32PCh. 5 - Stan Moneymaker has been informed of a major...Ch. 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 - To purchase a used automobile, you borrow 10,000...Ch. 5 - Your boss has just presented you with the summary...Ch. 5 - Experts agree that the IRR of a college education...Ch. 5 - A company has the opportunity to take over a...Ch. 5 - The prospective exploration for oil in the outer...Ch. 5 - Prob. 49PCh. 5 - An integrated, combined cycle power plant produces...Ch. 5 - A computer call center is going to replace all of...Ch. 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 - a. Calculate the IRR for each of the three...Ch. 5 - Prob. 61PCh. 5 - Prob. 62PCh. 5 - Prob. 63PCh. 5 - Prob. 64SECh. 5 - Prob. 65SECh. 5 - Prob. 66SECh. 5 - A certain medical device will result in an...Ch. 5 - Refer to Problem 5-61. Develop a spreadsheet to...Ch. 5 - Prob. 69CSCh. 5 - Prob. 70CSCh. 5 - Suppose that the average utilization of the CVD...Ch. 5 - Prob. 72FECh. 5 - Prob. 73FECh. 5 - Prob. 74FECh. 5 - Prob. 75FECh. 5 - Prob. 76FECh. 5 - Prob. 77FECh. 5 - Prob. 78FECh. 5 - Prob. 79FECh. 5 - A new machine was bought for 9,000 with life of...Ch. 5 - Prob. 81FECh. 5 - Prob. 82FECh. 5 - Prob. 83FECh. 5 - Refer to Problem 5-2. Assuming the residual value...
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- The plant manager at a company would like to perform an analysis for a new $250,000 machine. She estimates benefits of $20,000 in the first year, and benefits are increasing by 10% per year. 1) What is the payback period for the machine? 2)Suppose that the machine life is 15 years and machine has a salvage value of 20% of the initial cost at the end of its useful life. If the MARR of the company is 11 % per year, is this investment acceptable? Why?arrow_forwardA new product requires an initial investment of $140,000, and an annual operating expense of $32,000. This product is estimated to generate $47,000 revenue in the first year, and the revenue is expected to increase by $7,000 each year thereafter for 11 years. Determine whether this new product is a good investment using the ERR method. Assume MARR is 4% per year.arrow_forwardA computerized fabricating system has a first cost of $180,000, and an annual operating cost of $84,000 in years 1 and 2, increasing by $5,000 per year thereafter. The salvage value of the system is 25% of the first cost regardless of when the system is retired within the useful life of 5 years. Using a MARR of 15% per year, determine the annual worth of total cost when keeping the system for 2 years and 4 years.arrow_forward
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