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engineering economy
Questions and Answers of
Engineering Economy
Owing to the rising cost of copper, in 1982 the U.S. Mint changed the composition of pennies from 95% copper (and 5% zinc) to 2.5% copper (and 97.5% zinc) to save money. Your favorite aunt has a
Energy can be conserved when your home heating/cooling system works less during the heating and cooling seasons. In fact a one degree Fahrenheit difference in your thermostat setting can reduce
Jill Smith opens an apartment-locator business near a college campus. She is the sole owner of the proprietorship, which she names Campus Apartment Locators. During the first month of operations,
An experimental composite engine block for an automobile will trim 20 pounds of weight compared with a traditional cast iron engine block. It is estimated that at least $2,500 in life-cycle costs
Classify each of the following cost items as mostly fixed or variable:Raw materials..........................................Administrative salariesDirect
Lubbock Engineering Consultants is a firm of professional civil engineers. It mostly does surveying jobs for the heavy construction industry throughout Texas. The firm obtains its jobs by giving
A company has determined that the price and the monthly demand of one of its products are related by the equation D = √(400 − p), where p is the price per unit in dollars and D is the monthly
A company has determined that the price and the monthly demand of one of its products are related by the equation D = √(400 − p), where p is the price per unit in dollars and D is the monthly
A manufacturing company leases a building for $100,000 per year for its manufacturing facilities. In addition, the machinery in this building is being paid for in installments of $20,000 per year.
A manufacturing company leases a building for $100,000 per year for its manufacturing facilities. In addition, the machinery in this building is being paid for in installments of $20,000 per year.
You are planning to build a new home with approximately 2,000–2,500 gross square feet of living space on one floor. In addition, you are planning an attached two-car garage (with storage space) of
A large electric utility company releases 62 million tons of greenhouse gases (mostly carbon dioxide) into the environment each year. This company has committed to spending $1.2 billion in capital
The proposed small office building in Example 3-2 had 24,000 net square feet of area heated by a natural gas furnace. The owner of the building wants to know the approximate cost of heating the
Suppose that your brother-in-law has decided to start a company that produces synthetic lawns for senior homeowners. He anticipates starting production in 18 months. In estimating future cash flows
A water filtration system in an industrial process was purchased in 2014 for $250,000. It will be replaced at the end of year 2019. What is the estimated cost of the replacement, based on the
Prepare a composite (weighted) index for housing construction costs in 2014, using the following data: Reference Type of Housing Year (/ = 100) 2014 Percent Single units 62 70 41 38 $/ft? 57 $/ft?
A microbrewery was built in 2012 at a total cost of $650,000. Additional information is given in the accompanying table (all 2000 indices = 100).a. Calculate a weighted index for microbrewery
Today (year 0) a new 7-mega Watt (MW) solar panel farm is constructed at a cost of $14 million. Four years from today, a smaller 6-MW solar farm will be added to the existing farm. The inflation rate
Six years ago, an 80-kW diesel electric set cost $160,000. The cost index for this class of equipment six years ago was 187 and is now 194. The cost-capacity factor is 0.6.(3.4)a. The plant
The capital investment cost for a switch grass-fueled ethanol plant with a capacity of 250,000 gallons per year is $3 million. The cost-capacity factor for this particular plant technology is 0.59
A biotech firm is considering abandoning its old plant, built 23 years ago, and constructing a new facility that has 50% more square footage. The original cost of the old facility was $300,000, and
In a learning curve application, 658.5 work hours are required for the third production unit and 615.7 work hours are required for the fourth production unit. Determine the value of n(and therefore
You have been asked to estimate the cost of 100 prefabricated structures to be sold to a local school district. Each structure provides 1,000 square feet of floor space, with 8-feet ceilings. In
In the packaging department of a large aircraft parts distributor, a fairly reliable estimate of packaging and processing costs can be determined by knowing the weight of an order. Thus, the weight
A 250 square foot shell and tube heat exchanger was purchased for $15,250 in 2004 when the index value was 830. Estimate the cost of 150 square foot shell and tube heat exchanger in 2014 when the
You have been asked to prepare a quick estimate of the construction cost for a coal-fired electricity generating plant and facilities. A work breakdown structure (levels one through three) is shown
Refer to Example 3-8. While cleaning out an old file, someone uncovers the first spacecraft manufactured by your company—30 years ago! It weighed 100 pounds and cost $600 million. Extend the
Given the following information, how many units must be sold to achieve a profit of $25,000?Direct labor hours:..................................0.2 hour/unitDirect labor
Find the average time per unit required to produce the first 30 units, if the slope parameter of the learning rate is 92% and the first unit takes 460 hours.(a)−3.30693E-11 (b)
A student is considering the purchase of two alternative cars. Car A initially costs $1,500 more than Car B, but uses 0.05 gallons per mile, versus 0.07 gallons per mile for Car B. Both cars will
A group of enterprising engineering students has developed a process for extracting combustible methane gas from cow manure (don’t worry, the exhaust is odorless). With a specially adapted internal
A municipal solid-waste site for a city must be located at Site A or Site B. After sorting, some of the solid refuse will be transported to an electric power plant where it will be used as fuel. Data
Suppose your company has just discovered $100,000 worth (this is the original manufacturing cost) of obsolete inventory in an old warehouse. Your boss asks you to evaluate two options: (1) re-machine
Suppose your wealthy aunt has given you a gift of $25,000. You have come up with three options for spending (or investing) the money. First, you’d like (but do not need) a new car to brighten up
A large, profitable commercial airline company flies 737-type aircraft, each with a maximum seating capacity of 132 passengers. Company literature states that the economic breakeven point with these
A lash adjuster keeps pressure constant on engine valves, thereby increasing fuel efficiency in automobile engines. The relationship between price (p) and monthly demand (D) for lash adjusters made
A large company in the communication and publishing industry has quantified the relationship between the price of one of its products and the demand for this product as Price = 150 − 0.01 × Demand
A large wood products company is negotiating a contract to sell plywood overseas. The fixed cost that can be allocated to the production of plywood is $800,000 per month. The variable cost per
A company produces and sells a consumer product and is able to control the demand for the product by varying the selling price. The approximate relationship between price and demand iswhere p is the
An electric power plant uses solid waste for fuel in the production of electricity. The cost Yin dollars per hour to produce electricity is Y = 12 + 0.3 X + 0.27 X2, where X is in megawatts. Revenue
The annual fixed costs for a plant are $100,000, and the variable costs are $140,000 at 70% utilization of available capacity, with net sales of $280,000. What is the breakeven point in units of
The world price of zinc has increased to the point where “moth balled” zinc mines in east Tennessee have been reopened because of their potential profitability.(a) What is the estimated annual
A cell phone company has a fixed cost of $1,500,000 per month and a variable cost of $20 per month per subscriber. The company charges $39.95 per month to its cell phone customers.a. What is the
A plant operation has fixed costs of $2,000,000 per year, and its output capacity is 100,000 electrical appliances per year. The variable cost is $40 per unit, and the product sells for $90 per
Ethanol blended with gasoline can be used to power a “flex-fueled” car. One particular blend that is gaining in popularity is E85, which is 85% ethanol and 15% gasoline. E85 is 80% cleaner
The fixed cost for a steam line per meter of pipe is $450 X + $50 per year. The cost for loss of heat from the pipe per meter is $4.8/X1/2 per year. Here, X represents the thickness of
Stan Moneymaker has been shopping for a new car. He is interested in a certain 4 - cylinder sedan that averages 28 miles per gallon. But the sales person tried to persuade Stan that the 6-cylinder
A producer of synthetic motor oil for automobiles and light trucks has made the following statement: “One quart of Dynolube added to your next oil change will increase fuel mileage by one percent.
Two alternative designs are under consideration for a tapered fastening pin. The fastening pins are sold for $0.70 each. Either design will serve equally well and will involve the same material and
A bicycle component manufacturer produces hubs for bike wheels. Two processes are possible for manufacturing, and the parameters of each process are as follows:Assume that the daily demand for
The speed of your automobile has a huge effect on fuel consumption. Traveling at 65 miles per hour (mph) instead of 55 mph can consume almost 20% more fuel. As a general rule, for every mile per hour
A company is analyzing a make-versus-purchase situation for a component used in several products, and the engineering department has developed these data:Option A: Purchase 10,000 items per year at a
A national car rental agency asks, “Do you want to bring back the economy-class car full of gas or with an empty tank? If we fill up the tank for you,we’ll charge you $3.50 per gallon, which is
Ocean water contains 0.9 ounces of gold per ton. Method A costs $550 per ton of water processed and will recover 90% of the metal. Method B costs $400 per ton of water processed and will recover 60%
Home heating accounts for approximately one-third of energy consumption in a typical U.S. household. Despite soaring prices of oil, coal, and natural gas, one can make his/her winter heating bill
Refer to Example 2-4. If your focus was on reducing expenses, would it be better to reduce the fixed cost (B1) or variable cost (B2) component? What is the effect of a ± 10% change in both of these
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