Engineering Economy – Applying Theory to Practice 2nd. Edition by Eschenbach, Ted G | 9781563478369 | 195161521 | Holooly

Engineering Economy

Engineering Economy – Applying Theory to Practice

247 SOLVED PROBLEMS

Question: A.3

JMJ Enterprises The JMJ Enterprises makes two models of networking equipment for the telecommunications industry. The Alpha and Omega products have annual sales volumes of 25,000 and 40,000 units, respectively. Historically, JMJ has used a traditional (absorption-based) cost accounting system ...

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Traditional Costing Method Indirect cost rate = (T...

Question: 19.7

LowTech Manufacturing’s Staged Construction LowTech Manufacturing is building a new office complex next to its manufacturing plant. There are two plans. The first is a five-floor complex, where only three floors are needed for the first 3 to 10 years. The top two floors would remain empty until ...

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First, find the PW for both alternatives with each...

Question: 19.3

Multiple Objectives in Manufacturing Often, the justification for using robots and computer-aided design, drafting, and manufacturing (CAD/CAM) systems relies on objectives that include those listed in Exhibit 19.2.What other objectives might be important? Which of the potential payoffs are ...

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Unlisted objectives include using less floor space...

Question: 18.17

Uncertain N Requires Probability Distribution for PW for Exact Answer Aproject has a first cost of $22,000, no salvage value, and a net annual benefit of $4000. The firm uses an interest rate of 12%. The benefits may last 5, 10, or 15 years, with respective probabilities of 20%, 60%, and 20%. What ...

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An approximate answer can be obtained by using the...

Question: 18.15

Probability Distribution for PW for ElectroToys’ New Product Development (Example 18.6 continued) ElectroToys’ new product idea has an uncertain first cost for development and uncertain annual net revenue, as shown in the accompanying table. Assume that the first cost occurs at time 0 and that the ...

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The first step is to identify the nine combination...

Question: 18.13

Standard Deviation for Micro Pizza Heater’s Market Demand (Examples 18.3 and 18.5 continued) In Example 18.5, the Eannual revenue was calculated to be $278,873. What is the standard deviation of that annual revenue? ...

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Once the expected value of the squared equivalent ...

Question: 18.2

Life of a Crash Absorber The Crooked Mountain Expressway has many bridge abutments with crash-absorbing barriers. Each year, one-third of these barriers are damaged in collisions and must be replaced or repaired. There is no apparent pattern to which bridge abutments are hit; rather, it appears ...

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This mathematical model assumes randomness of coll...

Question: 17.3

Northern Electric Postulate and justify the limits of uncertainty for an electric power-generating facility with the following six parameters: ...

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Northern Electric’s experience is that major build...

Question: 15.16

Depreciation, Interest, and Inflation Assume that the Copper River Valves’ manufacturing equipment evaluated in Example 15.14 will be financed with a 5-year, 11% loan that has equal annual payments. What is the EAC of this equipment? Check this answer by computing the PW of the loan separately ...

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The first step is to calculate the annual payment....

Question: 15.15

Mortgage Interest and Inflation What is the constant-dollar, after-tax cost (the IRR) of a mortgage loan? The loan is for $100K at 9%, with 30 equal annual payments. Assume inflation is 4% and that the taxpayer itemizes and is in the 27.5% tax bracket. ...

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This is a simplification of a typical mortgage, wh...

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