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Engineering Economy
Engineering Economic Analysis
219 SOLVED PROBLEMS
Question: 10.9
A dam is being considered to reduce river flooding. But if a dam is built, what height should it be? Increasing the dam’s height will (1) reduce a flood’s probability, (2) reduce the damage when floods occur, and (3) cost more. Which dam height minimizes the expected total annual cost? The state ...
Verified Answer:
The easiest way to solve this problem is to choose...
Question: 8.5
The following information refers to three mutually exclusive alternatives. The decision maker wishes to choose the right machine but is uncertain what MARR to use. Create a choice table that will help the decision maker to make the correct economic decision. ...
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In this example, the lives of the three alternativ...
Question: 7A.1
A piece of land may be purchased for $610,000 to be strip-mined for the underlying coal. Annual net income will be $200,000 for 10 years. At the end of 10 years, the surface of the land will be restored as required by a federal law on strip-mining. The reclamation will cost $1.5 million more than ...
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In Example 5–11 the NPW was calculated to be $41,0...
Question: 7.14
Two machines are being considered for purchase. If the MARR is 10%, which machine should be bought? Use an IRR analysis comparison. ...
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The solution is based on a 12-year analysis period...
Question: 7.8
An engineering student is deciding whether to buy two 1-semester parking permits or an annual permit. The annual parking permit costs $180 due August 15th; the semester permits are $130 due August 15^th and January 15^th. What is the rate of return for buying the annual permit? ...
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TABLE SOLUTION Before we solve this mathematically...
Question: 7.6
A regional furniture company is offering either a discount equal to twice the state sales tax or interest-free financing for 60 months. The state sales tax is 6%. What is the effective annual interest rate for financing versus the discount? Assume you are buying $1000 worth of furniture. How will ...
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TABLE SOLUTION We set each option’s PW equal to ea...
Question: 5.11
A piece of land may be purchased for $610,000 to be strip-mined for the underlying coal. Annual net income will be $200,000 for 10 years. At the end of the 10 years, the surface of the land will be restored as required by a federal law on strip-mining. The reclamation will cost $1.5 million more ...
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The investment opportunity may be described by the...
Question: 5.4
Two pumps are being considered for purchase. If interest is 7%, which pump should be bought? Their maintenance costs are the same. ...
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TABLE SOLUTION Since the maintenance costs are the...
Question: 5.3
A firm is trying to decide which of two weighing scales it should install to check a package-filling operation in the plant. The ideal scale would allow better control of the filling operation, hence less overfilling. If both scales have lives equal to the 6-year analysis period, which one should ...
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TABLE SOLUTION Atlas Scale PW of brnefits - PW of ...
Question: 5.2
Wayne County will build an aqueduct to bring water in from the upper part of the state. It can be built at a reduced size now for $300 million and be enlarged in 25 years for an additional $350 million. An alternative is to construct the full-sized aqueduct now for $400 million.Both alternatives ...
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TABLE SOLUTION This problem illustrates staged con...
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