Engineering Economic Analysis 11th. Edition by Eschenbach, Ted G.; Newnan, Donald G.; Lavelle, Jerome P | 9780199778126 | 199778124 | Holooly

Engineering Economy

Engineering Economic Analysis

204 SOLVED PROBLEMS

Question: 13.10

Some new production machinery has a first cost of $100,000 and a useful life of 10 years. Its estimated operating and maintenance (O&M) costs are $10,000 the first year, which will increase annually by $4000. The asset’s before-tax market value will be $50,000 at the end of the first year and then ...

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To find this new production machinery’s minimum co...

Question: 13.9

Refer to Example 13-2, where we calculated the before-tax marginal costs for a new piece of production machinery. Calculate the asset’s after-tax marginal costs considering this additional information. • Depreciation is by the straight-line method, with S = $0 and n = 5 years, so ...

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The after-tax marginal cost of ownershipwill invol...

Question: 9.3

A firm is trying to decide which of two devices to install to reduce costs. Both devices have useful lives of 5 years and no salvage value. Device A costs $1000 and can be expected to result in $300 savings annually. Device B costs $1350 and will provide cost savings of $300 the first year, but ...

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We have used three types of analysis thus far to s...

Question: 9.4

In Example 7-15 we analyzed two machines that were being considered for purchase. Ass ...

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Assuming a 12-year analysis period, the cash flow ...

Question: 7A.7

(7A-2 and 7A-5 revisited) Adding an oil well to an existing field had the cash flows summarized in Figure 7A-5. If the firm normally borrows money at 8% and invests at 15%, find the modified internal rate of return (MIRR). ...

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Figure 7A-6 shows the spreadsheet calculations. It...

Question: 7A.6

(7A-3 revisited) A project has a first cost of $120,000. Net revenues begin at $30,000 in Year 1, and then increase by $2000 per year. In Year 5 the facility is expanded at a cost of $60,000 so that demand can continue to expand at $2000 per year. Howmany roots for the PWequation have a positive value for i? ...

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Figure 7A-4 shows the spreadsheet calculations and...

Question: 7A.5

(7A-2 revisited) Adding an oil well to an existing field had the following cash flow diagram. How many roots for the PW equation exist and what are they? ...

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Figure 7A-3 shows the spreadsheet calculations and...

Question: 7A.4

This project is representative of ones with a salvage cost. How many roots for the PW equation exist? ...

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Figure 7A-2 shows the spreadsheet calculations and...

Question: 7A.3

A project has a first cost of $120,000. Net revenues begin at $30,000 in Year 1 and then increase by $2000 per year. In Year 5 the facility is expanded at a cost of $60,000 so that demand can continue to expand at $2000 per year. How many roots for the PW equation are possible? ...

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The first step is to draw the cash flow diagram. T...

Question: 16.7

Consider again Example 16–4, wherewe evaluated power plants designs. Remember that government projects are often opposed and supported by different groups in the populace. Thus, decision makers become very aware of potential political aspects when they are considering such projects. ...

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For the electric power plant decision, several pol...

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