Engineering economy 7th Edition Leland Blank, Anthony Tarquin - Solutions

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At some colleges and universities, economics professors receive higher salaries than professors in some other fields.a. Why might this be true?b. Some other colleges and universities have a policy of paying equal salaries to professors in all fields. At some of these schools, economics professors
Imagine that someone offered you a choice: You could spend four years studying at the world’s best university, but you would have to keep your attendance there a secret. Or you could be awarded an official degree from the world’s best university, but you couldn’t actually attend. Which choice
When recording devices were first invented almost 100 years ago, musicians could suddenly supply their music to large audiences at low cost. How do you suppose this development affected the income of the best musicians? How do you suppose it affected the income of average musicians?
A current debate in education is whether teachers should be paid on a standard pay scale based solely upon their years of training and teaching experience, or whether part of their salary should be based upon their performance (called “merit pay”).a. Why might merit pay be desirable?b. Who
When Alan Greenspan (who would later become chairman of the Federal Reserve) ran an economic consulting firm in the 1960s, he primarily hired female economists. He once told the New York Times, “I always valued men and women equally, and I found that because others did not, good women economists
Suppose that all young women were channeled into careers as secretaries, nurses, and teachers; at the same time, young men were encouraged to consider these three careers and many others as well.a. Draw a diagram showing the combined labor market for secretaries, nurses, and teachers. Draw a
This chapter considers the economics of discrimination by employers, customers, and governments. Now consider discrimination by workers. Suppose that some brunette workers did not like working with blonde workers. Do you think this worker discrimination could explain lower wages for blonde workers?
What does the poverty rate measure? Describe three potential problems in interpreting the measured poverty rate.
Pam earns more than Pauline. Someone proposes taxing Pam to supplement Pauline’s income. How would a utilitarian, a liberal, and a libertarian evaluate this proposal?
List three policies aimed at helping the poor, and discuss the pros and cons of each.
How does the extent of income inequality in the United States compare to that of other nations around the world?
What groups in the U.S. population are most likely to live in poverty?
When gauging the amount of inequality, why do transitory and life cycle variations in income cause difficulties?
How would a utilitarian, a liberal, and a libertarian determine how much income inequality is permissible?
What are the pros and cons of in-kind (rather than cash) transfers to the poor?
Describe how antipoverty programs can discourage the poor from working. How might you reduce this disincentive? What are the disadvantages of your proposed policy?
Table shows that income inequality in the United States has increased since 1970. Some factors contributing to this increase were discussed in Chapter 19. What arethey?
Table shows that the percentage of children in families with income below the poverty line far exceeds the percentage of the elderly in such families. How might the allocation of government money across different social programs have contributed to this phenomenon?Group Poverty RateAll
Economists often view life cycle variation in income as one form of transitory variation in income around people’s life time, or permanent, income. In this sense, how does your current income compare to your permanent income? Do you think your current income accurately reflects your standard of
The chapter discusses the importance of economic mobility.a. What policies might the government pursue to increase economic mobility with in a generation?b. What policies might the government pursue to increase economic mobility across generations?c. Do you think we should reduce spending on
Consider two communities. In one community, ten families have incomes of $100,000 each and ten families have incomes of $20,000 each. In the other community, ten families have incomes of $200,000 each and ten families have incomes of $22,000 each.a. In which community is the distribution of income
This chapter uses the analogy of a “leaky bucket” to explain one constraint on the redistribution of income.a. What elements of the U.S. system for redistributing income create the leaks in the bucket? Be specific.b. Do you think that Republicans or Democrats generally believe that the bucket
Suppose there are two possible income distributions in a society of ten people. In the first distribution, nine people have incomes of $30,000 and one person has an income of $10,000. In the second distribution, all ten people have incomes of $25,000.a. If the society had the first income
The poverty rate would be substantially lower if the market value of in-kind transfers were added to family income. The largest in-kind transfer is Medicaid, the government health program for the poor. Let’s say the program costs $7,000 per recipient family.a. If the government gave each
Consider two of the income security programs in the United States: Temporary Assistance for Needy Families (TANF) and the Earned Income Tax Credit (EITC).a. When a woman with children and very low income earns an extra dollar, she receives less in TANF benefits. What do you think is the effect of
In the spring of 2010, President Barack Obama signed sweeping healthcare legislation with the aim of providing healthcare to most Americans, financed in part by increasing taxes on those with high incomes. Which of the political philosophers discussed in this chapter do you think would most likely
List the four essential elements involved in decision making in engineering economic analysis.
What is meant by (a) Limited capital funds and(b) Sensitivity analysis?
List three measures of worth that are used in engineering economic analysis.
Identify the following factors as either economic (tangible) or noneconomic (intangible): first cost, leadership, taxes, salvage value, morale, dependability, inflation, profit, acceptance, ethics, interest rate.
Consider the common moral precept that stealing is wrong. Hector is with a group of friends in a local supermarket. One of Hector's buddies takes a high-energy drink from a six-pack on the shelf, opens it, drinks it, and returns the empty can to the package, with no intention of paying for it. He
While going to work this morning off site from his office, an engineer accidently ran a stop sign and was in a car accident that resulted in the death of a 5-year-old child. He has a strong belief in the universal moral that it is wrong to do serious harm to another person. Explain the conflict
Claude is a fourth-year engineering university student who has just been informed by his instructor that he made a very low grade on his Spanish language final test for the year. Although he had a passing score prior to the final, his final grade was so low that he has now flunked the entire year
RKI Instruments borrowed $3,500,000 from a private equity firm for expansion of its manufacturing facility for making carbon monoxide monitors/ controllers. The company repaid the loan after 1 year with a single payment of $3,885,000. What was the interest rate on the loan?
Which of the following 1-year investments has the highest rate of return?(a) $12,500 that yields $1125 in interest,(b) $56,000 that yields $6160 in interest(c) $95,000 that yields $7600 in interest.
A new engineering graduate who started a consulting business borrowed money for 1 year to furnish the office. The amount of the loan was $23,800, and it had an interest rate of 10% per year. However, because the new graduate had not built up a credit history, the bank made him buy loan-default
When the inflation rate is expected to be 8% per year, what is the market interest rate likely to be?
The symbol P represents an amount of money at a time designated as present. The following symbols also represent a present amount of money and require similar calculations. Explain what each symbol stands for: PW, PV, NPV, DCF, and CC.
Identify the four engineering economy symbols and their values from the following problem statement.Use a question mark with the symbol whose value is to be determined.Thompson Mechanical Products is planning to set aside $150,000 now for possibly replacing its large synchronous refiner motors
Identify the four engineering economy symbols and their values from the following problem statement.Use a question mark with the symbol whose value is to be determined.Atlas Long-Haul Transportation is considering installing Valutemp temperature loggers in all of its refrigerated trucks for
Identify the four engineering economy symbols and their values from the following problem statement.Use a question mark with the symbol whose value is to be determined.A green algae, Chlamydomonas reinhardtii, can produce hydrogen when temporarily deprived of sulfur for up to 2 days at a time. A
Identify the four engineering economy symbols and their values from the following problem statement. Use a question mark with the symbol whose value is to be determined. Vision Technologies, Inc., is a small company that uses ultra-wideband technology to develop devices that can detect objects
What is meant by end-of-period convention?
Identify the following as cash inflows or outflows to commercial air carriers: fuel cost, pension plan contributions, fares, maintenance, freight revenue, cargo revenue, extra-bag charges, water and sodas, advertising, landing fees, seat preference fees.
Many credit unions use semiannual interest periods to pay interest on customer savings accounts. For a credit union that uses June 30 and December 31 as its semiannual interest periods, determine the end-of-period amounts that will be recorded for the deposits shown in the table.Month Deposit, $Jan
For a company that uses a year as its interest period, determine the net cash flow that will be recorded at the end of the year from the cash flowsshown.
Construct a cash flow diagram for the following cash flows: $25,000 outflow at time 0, $9000 per year inflow in years 1 through 5 at an interest rate of 10% per year, and an unknown future amount in year 5.
Construct a cash flow diagram to find the present worth in year 0 at an interest rate of 15% per year for the following situation.Year Cash Flow, $0 ..............– 19,0001–4 .......... + 8,100
Construct a cash fl ow diagram that represents the amount of money that will be accumulated in 15 years from an investment of $40,000 now at an interest rate of 8% per year.
At an interest rate of 15% per year, an investment of $100,000 one year ago is equivalent to how much now?
During a recession, the price of goods and services goes down because of low demand. A company that makes Ethernet adapters is planning to expand its production facility at a cost of $1,000,000 one year from now. However, a contractor who needs work has offered to do the job for $790,000 if the
As a principal in the consulting firm where you have worked for 20 years, you have accumulated 5000 shares of company stock. One year ago, each share of stock was worth $40. The company has offered to buy back your shares for $225,000. At what interest rate would the firm's offer be equivalent to
A design/build engineering company that usually gives year-end bonuses in the amount of $8000 to each of its engineers is having cash flow problems. The company said that although it could not give bonuses this year, it would give each engineer two bonuses next year, the regular one of $8000 plus
University tuition and fees can be paid by using one of two plans. Early-bird: Pay total amount due 1 year in advance and get a 10% discount. On-time: Pay total amount due when classes start. The cost of tuition and fees is $10,000 per year.(a) How much is paid in the early-bird plan? (b) What is
If a company sets aside $1,000,000 now into a contingency fund, how much will the company have in 2 years, if it does not use any of the money and the account grows at a rate of 10% per year?
Iselt Welding has extra funds to invest for future capital expansion. If the selected investment pays simple interest, what interest rate would be required for the amount to grow from $60,000 to $90,000 in 5 years?
To finance a new product line, a company that makes high-temperature ball bearings borrowed$1.8 million at 10% per year interest. If the company repaid the loan in a lump sum amount after 2 years, what was (a) The amount of the payment (b) The amount of interest?
Because market interest rates were near all-time lows at 4% per year, a hand tool company decided to call (i.e., pay off) the high-interest bonds that it issued 3 years ago. If the interest rate on the bonds was 9% per year, how much does the company have to pay the bond holders? The face value
A solid waste disposal company borrowed money at 10% per year interest to purchase new haulers and other equipment needed at the company owned landfill site. If the company got the loan 2 years ago and paid it off with a single payment of $4,600,000, what was the principal amount P of the loan?
If interest is compounded at 20% per year, how long will it take for $50,000 to accumulate to $86,400?
To make CDs look more attractive than they really are, some banks advertise that their rates are higher than their competitors' rates; however, the fine print says that the rate is a simple interest rate. If a person deposits $10,000 at 10% per year simple interest, what compound interest rate
Give three other names for minimum attractive rate of return.
Identify the following as either equity or debt financing: bonds, stock sales, retained earnings, venture capital, short-term loan, capital advance from friend, cash on hand, credit card, home equity loan.
What is the weighted average cost of capital for a corporation that finances an expansion project using 30% retained earnings and 70% venture capital? Assume the interest rates are 8% for the equity financing and 13% for the debt financing.
Managers from different departments in Zenith Trading, a large multinational corporation, have offered six projects for consideration by the corporate office. A staff member for the chief financial officer used key words to identify the projects and then listed them in order of projected rate of
State the purpose for each of the following built-in spreadsheet functions.(a) PV (i%, n, A, F)(b) FV (i%, n, A, P)(c) RATE (n, A, P, F)(d) IRR (first_cell: last_cell)(e) PMT (i %, n, P, F)(f) NPER (i%, A, P, F)
What are the values of the engineering economy symbols P, F, A, i, and n in the following functions?Use a question mark for the symbol that is to be determined.(a) NPER (8%, –1500,8000,2000)(b) FV (7%, 102000, –9000)(c) RATE (10, 1000, –12000, 2000)(d) PMT (11%, 20, 14000)(e) PV (8%, 15, –
Write the engineering economy symbol that corresponds to each of the following spreadsheet functions.(a) PMT (b) FV (c) NPER (d) PV (e) IRR
In a built-in spreadsheet function, if a certain parameter is not present,(a) Under what circumstances can it be left blank(b) When must a comma be entered in its place?
Sheryl and Marcelly both invest $1000 at 10% per year for 4 years. Sheryl receives simple interest and Marcelly gets compound interest. Use a spreadsheet and cell reference formats to develop relations that show a total of $64 more interest for Marcelly at the end of the 4 years. Assume no
Multiple Choice Questions1. The concept that different sums of money at different points in time can be said to be equal to each other is known as:(a) Evaluation criterion(b) Equivalence(c) Cash flow(d) Intangible factors2. The evaluation criterion that is usually used in an economic analysis
The following annual maintenance and operation (M&O) costs for a piece of equipment were collected over a 5-year period: $12,300, $8900, $9200, $11,000, and $12,100. The average is $10,700. In conducting a sensitivity analysis, the most reasonable range of costs to use (i.e., percent from the
The time it would take for a given sum of money to double at 4% per year simple interest is closest to:(a) 30 years(b) 25 years(c) 20 years(d) 10 years
To finance a new project costing $30 million, a company borrowed $21 million at 16% per year interest and used retained earnings valued at 12% per year for the remainder of the investment. The company's weighted average cost of capital for the project was closest to:(a) 12.5% (b) 13.6% (c) 14.8%
Large refrigerator manufacturers such as Whirlpool, General Electric, Frigidaire, and others may subcontract the molding of their plastic liners and door panels. One prime national subcontractor is Innovations Plastics. Because of improvements in mechanical properties, the molded plastic can
Look up the numerical value for the following factors from the interest tables.1. (P/F, 6%, 8)2. (A/P, 10%, 10)3. (A/G, 5%, 20)4. (A/F, 2%, 30)5. (P/G, 35%, 15)
How much can Haydon Rheosystems, Inc., afford to spend now on an energy management system if the software will save the company $21,300 per year for the next 5 years? Use an interest rate of 10% per year.
A manufacturer of off-road vehicles is considering the purchase of dual-axis inclinometers for installation in a new line of tractors. The distributor of the inclinometers is temporarily overstocked and is offering them at a 40% discount from the regular cost of $142. If the purchaser gets them now
The Moller Skycar M400 is a flying car known as a personal air vehicle (PAV) that is expected to be FAA-certified by December 31, 2011. The cost is $985,000, and a $100,000 deposit will hold one of the first 100 "cars." Assume a buyer pays the $885,000 balance 3 years after making the $100,000
A family that won a $100,000 prize on America's Funniest Home Videos decided to put one-half of the money in a college fund for their child who was responsible for the prize. If the fund earned interest at 6% per year, how much was in the account 14 years after it was started?
One of the biggest vulnerabilities in a control system is network devices, such as Ethernet-based network switches that are located in unsecured locations and accessible to everyone. DeltaX switches, manufactured by Dahne Security, allow the user to automatically lock and unlock the port access to
A company that sells high-purity laboratory chemicals is considering investing in new equipment that will reduce cardboard costs by better matching the size of the products to be shipped to the size of the shipping container. If the new equipment will cost $220,000 to purchase and install, how much
Red Valve Co. of Carnegie, Pennsylvania, makes a control pinch valve that provides accurate, repeatable control of abrasive and corrosive slurries, outlasting gate, plug, ball, and even satellite coated valves. How much can the company afford to spend now on new equipment in lieu of spending
If GHD Plastics purchases a new building now for $1.3 million for its corporate headquarters, what must the building be worth in 10 years? The company expects all expenditures to earn a rate of return of at least 18% per year.
CGK Rheosystems makes high-performance rotational viscometers capable of steady shear and yield stress testing in a rugged, compact footprint.How much could the company afford to spend now on new equipment in lieu of spending $200,000 one year from now and $300,000 three years from now, if the
Five years ago a consulting engineer purchased a building for company offices constructed of bricks that were not properly fired. As a result, some of the bricks were deteriorated from their exposure to rain and snow. Because of the problem with the bricks, the selling price of the building was 25%
Metso Automation, which manufactures addressable quarter-turn electric actuators, is planning to set aside $100,000 now and $150,000 one year from now for possible replacement of the heating and cooling systems in three of its larger manufacturing plants. If the replacement won't be needed for 4
Syringe pumps often fail because reagents adhere to the ceramic piston and deteriorate the seal. Trident Chemical developed an integrated polymer dynamic seal that provides a higher sealing force on the sealing lip, resulting in extended seal life.One of Trident's customers expects to reduce
China spends an estimated $100,000 per year on cloud seeding efforts, which includes using antiaircraft guns and rocket launchers to fill the sky with silver iodide. In the United States, utilities that run hydroelectric dams are among the most active cloud seeders, because they believe it is a
The Public Service Board (PSB) awarded two contracts worth a combined $1.07 million to improve (i.e., deepen) a retention basin and reconstruct the spillway that was severely damaged in a flood 2 years ago. The PSB said that, because of the weak economy, the bids came in $950,000 lower than
The National Highway Traffic Safety Administration raised the average fuel efficiency standard to 35.5 miles per gallon for cars and light trucks by the year 2016. The rules will cost consumers an average of $434 extra per vehicle in the 2012 model year. If a person purchases a new car in 2012 and
In an effort to reduce childhood obesity by reducing the consumption of sugared beverages, some states have imposed taxes on soda and other soft drinks. A survey by Roland Sturm of 7300 fifth-graders revealed that if taxes averaged 4 cents on each dollar's worth of soda, no real difference in
The Texas Tomorrow Fund (TTF) is a program started in 1996 in Texas wherein parents could prepay their child's college tuition when the child was young. Actuaries set the price based on costs and investment earnings at that time. Later, the Texas legislature allowed universities to set their own
Henry Mueller Supply Co. sells tamperproof, normally open thermostats (i.e., thermostat closes as temperature rises). Annual cash flows are shown in the table below. Determine the future worth of the net cash flows at an interest rate of 10% peryear.
A company that makes self-clinching fasteners expects to purchase new production-line equipment in 3 years. If the new units will cost $350,000, how much should the company set aside each year, if the account earns 10% per year?
Find the numerical value of the following factors using(a) Interpolation(b) The formula.1. (A/P, 13%, 15)2. (P/G, 27%, 10)
Find the numerical value of the following factors using(a) Interpolation,(b) The formula,(c) A spreadsheet function.1. (F/P, 14%, 62)2. (A/F, 1%, 45)
For the factor (F/P, 10%, 43), find the percent difference between the interpolated and formula calculated values, assuming the formula- calculated value is the correct one.
For the factor (F/A, 15%, 52), find the percent difference between the interpolated and formula calculated values, assuming the formula- calculated value is the correct one.

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Engineering economy 7th Edition Leland Blank, Anthony Tarquin - Solutions

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