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engineering economy
Basics Of Engineering Economy 2nd Edition Leland T. Blank, Anthony Tarquin - Solutions
Metropolitan Water Utility is planning to upgrade its SCADA system for controlling well pumps, booster pumps, and disinfection equipment so that everything can be controlled from one site. The first phase will reduce labor and travel costs by an estimated $31,000 per year. The second phase will
An entrepreneurial electrical engineer approached a large water utility with a proposal that promises to reduce the utility’s power bill by at least 15%through installation of patented surge protectors.The proposal states that the engineer will not be paid for the first year, but beginning in
Encon Systems, Inc. sales revenues for a product line introduced 7 years ago is shown. Use tabulated factors, a calculator or a spreadsheet to calculate the equivalent annual worth over the 7 years using an interest rate of 10% per year.Year Cost, $0 850 1 300 2 400 3 400 4 400 5 500
Infrared thermometers by Delta Thermal Products are compatible with type K thermocouples and can provide rapid non-contact measurement capabilities at a cost of $135 per unit. A small private electric utility company plans to purchase 100 of the thermometers now and 500 more 1 year from now, if the
The by-product department of Iowa Packing utilizes a cooker that has the cost stream shown.Determine the annual worth for years 1 through 5 of the costs at an interest rate of 10% per year.Costs are in $1000 units.
Calculate the future worth in year 7 of Merchant Trucking Company’s cash flows. Use an interest rate of 10% per year.Year 0 1 2 3 4 5 6 7 Cash Flow, $ million 450 40 200 200 200 200 200 200
Some studies have shown that taller men tend to earn higher salaries than equally qualified men of shorter stature. Homotrope growth hormone can increase a child’s height at a cost of $50,000 per inch. Clyde’s parents wanted him to be 3" taller than he was projected to be. They paid $50,000 per
a. For the cash flow revenues shown, find the value of CF3 that makes the equivalent annual worth in years 1 through 7 equal to exactly$200. The interest rate is 10% per year.b. Use a spreadsheet to find CF3.
A company that manufactures digital pressure gauges just borrowed $10,000,000 with the understanding that it will make annual payments of$2,000,000 for three years starting next year, and then pay off the balance in year 4. If the interest rate is 8% per year, how much will the company owe at the
Calculate the annual cost for years 1 through 9 of the following series of disbursements. Use an interest rate of 10% per year. Solve using (a) factors and (b) a spreadsheet.Year Disbursement, $ Year Disbursement, $0 5,000 5 5,000 1 4,000 6 5,000 2 4,000 7 5,000 3 4,000 8 5,000 4 4,000 9 5,000 Year
An Air Force Research Laboratory has spent$62 million over a decade developing and testing the Active Denial System, a device which uses energy beams to allow soldiers to break up unruly mobs without firing a shot. Another $9 million will be spent over the next two years. Assume the$62 million was
For the cash flows shown, calculate the future worth in year 8 at i 10% per year.Year 0 1 2 3 4 5 6 Cash flow, $ 100 100 100 200 200 200 200
A mechanical engineer who is anticipating paying for his daughter’s college education plans to start depositing money now (year 0) and continue through year 17. If he deposits $5000 each year, how much will his daughter be able to withdraw each year starting in year 18 and continuing through year
An entrepreneurial new civil engineering graduate started a lab for testing endocrine disrupting compounds.The lab just broke even the first year, but in years 2 through 5, it made a profit of $97,000 each year. What is the present worth in year 0 of the profit at an interest rate of 10% per year?
To improve crack detection in aircraft, the U.S.Air Force combined ultrasonic inspection procedures with laser heating to identify fatigue cracks.Early detection of cracks may reduce repair costs by an estimated $200,000 per year. If the savings start now and continue through year 5, determine the
Attenuated Total Reflectance (ATR) is a method for looking at the surfaces of materials that are too opaque or too thick for standard transmission methods. A manufacturer of precision plastic parts estimates that ATR spectroscopy can save the company $8000 per year by reducing returns of
Akron Coating and Adhesives (ACA) produces a hot melt adhesive that provides a strong bond between metals and thermoplastics when used for weather stripping, seals, gaskets, hand grips for tools, appliances, etc. ACA claims that by eliminating a primer coat, manufacturers can cut costs and reduce
A company that manufactures purgable hydrogen sulfide monitors is planning to make deposits such that each one is 5% smaller than the preceding one. What must be the deposit at the end of year 1 if the deposits will extend through year 10 and the fourth deposit is $1250? Use an interest rate of 10%
A small northern California consulting firm wants to start a recapitalization pool for replacement of network servers. If the company invests $5000 at the end of year 1 but decreases the amount invested by 5% each year, how much will be in the account 5 years from now? Interest is earned at a rate
Thomasville Furniture Industries offers several types of high-performance fabrics that are capable of withstanding chemicals as harsh as chlorine. A Midwestern manufacturing company that uses fabric in several products has a report showing that the present worth of fabric purchases over a specified
Altmax Ltd, a company that manufactures automobile wiring harnesses, has budgeted P $400,000 now to pay for a certain type of wire clip over the next 5 years. If the company expects the cost of the clips to increase by 4% each year, what is the expected cost in year 3 if the company uses an
The present worth in year 10 of a decreasing geometric gradient series was calculated using tabulated factors to be $80,000. If the interest rate was 10% per year and the annual rate of decrease was 8% per year, determine the cash flow amount in year 1 using (a) tabulated factors, and (b) the Goal
Determine how much money will be in an investment account that starts at $5000 in year 1 and increases each year thereafter by 15% per year. Use an interest rate of 10% per year and a 12-year time period.
Hughes Cable Systems plans to offer its employees a salary enhancement package that has revenue sharing as its main component. Specifically, the company will set aside 1% of total sales for year-end bonuses for all its employees. The sales are expected to be $5 million the first year, $5.5 million
The effort required to maintain a scanning electron microscope is known to increase by a fixed percentage each year. A high-tech equipment maintenance company has offered its services for a fee that includes automatic increases of 8% per year after year 1. A biotech company that wanted to use the
Find the annual worth in years 1 through 10 of an investment that starts at $8000 in year 1 and increases by 10% each year. The interest rate is 10%per year.
The National Institute on Drug Abuse has spent$15 million on clinical trials to find out whether two vaccines can end the bad habits of nicotine and cocaine addiction. A Swiss company is now testing an obesity vaccine. If the vaccines are semi-successful such that treatment costs and medical bills
A concept car that will get 100 miles per gallon and carry four persons would have a carbon-fiber and aluminum composite frame with a 900 cc three-cylinder turbodiesel/electric hybrid power plant. The extra cost of these technologies is estimated to be $11,000. (a) If gasoline savings over a
Many companies offer retirement plans wherein the company matches the contributions made by the employee up to 6% of the employee’s salary.An engineer planning for her retirement expects to invest the maximum of 6% each year. Her salary in year one is $60,000 and is expected to increase by 4%
The cost for manufacturing a component used in intelligent interface converters was $23,000 the first year. The company expects the cost to increase by 2% each year. Calculate the present worth of this cost over a five-year period at an interest rate of 10% per year.
Verizon Communications said it plans to spend$22.9 billion to expand its fiber-optic Internet and television network so that it can compete with cable-TV providers like Comcast Corp. If the company attracts 950,000 customers in year one and grows its customer base by a constant amount of 15% per
For the cash flow series shown, determine the future worth in year 5 at an interest rate of 10%per year.Year 1 2 3 4 5 Cash Flow, $ 300,000 275,000 250,000 225,000 200,000
Fomguard LLC of South Korea developed a hightech fiber-optic fencing mesh (FOM) that contains embedded sensors that can differentiate between human and animal contact. In an effort to curtail illegal entry into the United States, a FOM fence has been proposed for some sections of the U.S.border
The future worth in year 10 of income associated with a fixed-income investment is guaranteed to be$500,000. If the cash flow in year 1 is $20,000, how much would the arithmetic gradient have to be at the interest rate of 10% per year?
Very Light Jets (VLJs) are one-pilot, two-engine jets that weigh 10,000 pounds or less and have only five or six passenger seats. Since they cost half as much as the most inexpensive business jets, they are considered to be the wave of the future.MidAm Charter purchased five planes so that it can
The present worth of income from an investment that follows an arithmetic gradient is projected to be $475,000. The income in year one is expected to be $25,000. What is the gradient each year through year 6 at an interest rate of 10% per year?
NMTeX Oil company owns several gas wells in Carlsbad, NM. Income from the depleting wells has been decreasing according to an arithmetic gradient for the past five years. If the interest rate is 10% per year and income in year 1 from well no. 24 was $390,000 and it decreased by $15,000 each year
Southwest Airlines hedged the cost of jet fuel by purchasing options that allowed the airline to purchase fuel at a fixed price for 5 years. If the market price of fuel was $0.50 per gallon higher than the option price in year 1, $0.60 per gallon higher in year 2, and amounts increasing by $0.10
A low-cost non-contact temperature measuring tool may be able to identify railroad car wheels that are in need of repair long before a costly structural failure occurs. If the BNSF railroad saves$100,000 in year 1, $110,000 in year 2, and amounts increasing by $10,000 each year for five years, what
Allen Bradley claims that its XM1Z1A and XM442 electronic over-speed detection relay modules provide customers a cost-effective monitoring and control system for turbo machinery. Estimates indicate the equipment will provide more efficient turbine performance to the extent of $20,000 in year 1,
For the cash flows shown, determine the value of G that makes the present worth in year 0 equal to$14,000. The interest rate is 10% per year.Year 0 1 2 3 4 Cash flow, $ per year — 8000 8000-G 8000-2G 8000-3G
A company that manufactures a revolutionary aeration system combining coarse and fine bubble aeration components had costs this year (year 1) of$9,000 for check valve components. Based on completion of a new contract with a distributor in China and volume discounts, the company expects this cost to
A company that manufactures air-operated drain valve assemblies budgeted $84,000 per year for repair components over the next five years.Assume the company uses an interest rate of 10%per year. (a) If the company expects to spend$15,000 in year 1, what is the annual increase(arithmetic gradient)
Calculate the equivalent annual cost of fuel for mail trucks that records indicate costs $72,000 in year one, increasing by $1000 per year through year five. Use an interest rate of 8% per year.
Silastic-LC-50 is a liquid silicon rubber designed to provide high clarity, superior mechanical properties, and short cycle time for high speed manufacturers.One high-volume manufacturer used it to achieve smooth release from molds. The company’s projected growth would result in silicon costs of
The defined benefits pension fund of G-Tech Electronics has a net value of $2 billion. The company is switching to a defined contribution pension plan, but it guaranteed the current retirees that they will continue to receive their benefits as promised.If the withdrawal rate from the fund is $158
Acceleron is planning future expansion with a new facility in Indianapolis. The company will make the move when its real estate sinking fund has a total value of $1.2 million. If the fund currently has $400,000 and the company adds $50,000 per year, how many years will it take for the account to
How many years will it take for money to increase to three times the initial amount at an interest rate of 10% per year?
How many years will it take Rexchem, Inc. to accumulate $400,000 for a chemical feeder if the company deposits $50,000 each year, starting one year from now, into an account that earns interest at 12% per year?
Vision Technologies, Inc., is a small company that uses ultra-wideband technology to develop devices that can detect objects (including people) inside buildings, behind walls, or below ground. The company expects to spend $100,000 per year for labor and $125,000 per year for supplies for three
Southwestern Moving and Storage wants to have enough money to purchase a new tractor-trailer in 5 years at a cost of $290,000. If the company sets aside $100,000 in year 2 and $75,000 in year 3, how much will the company have to set aside in year 4 in order to have the money it needs? Assume
Under an agreement with the Internet Service Providers (ISPs) Association, SBC Communications reduced the price it charges ISPs to resell its high-speed digital subscriber line (DSL) service from $458 to $360 per year per customer line for the next 5 years. A particular ISP, which has 20,000
New actuator element technology enables engineers to simulate complex computer-controlled movements in any direction. If the technology results in cost savings in the design of new roller coasters, determine the future worth at 12% per year in year 6 for estimated savings of $70,000 now and $90,000
A VMB pressure regulator allows gas suppliers and panel builders to provide compact gas handling equipment, thereby minimizing the space required in clean rooms. Veritech Micro Systems is planning to expand its clean room to accommodate a new product design team. The company estimates that it can
HydroKlean LLC, an environmental soil cleaning company, borrowed $3.5 million to finance startup costs for a site reclamation project. How much must the company receive each year in revenue to earn a rate of return of 25% per year for the 5-year project period?
A green algae, chlamydomonas reinhardtii, can produce hydrogen when temporarily deprived of sulfur for up to 2 days at a time. How much could a small company afford to spend now to commercialize the process if the net value of the hydrogen produced is $280,000 per year? Assume the company wants to
PCM Thermal Products uses austenitic nickelchromium alloys to manufacture resistance heating wire. The company is considering a new annealing-drawing process to reduce costs. If the new process will cost $3.25 million dollars now, how much must be saved each year to recover the investment in 6
The U.S. Navy’s robotics lab at Point Loma Naval Base in San Diego is developing robots that will follow a soldier’s command or operate autonomously. If one robot would prevent injury to soldiers or loss of equipment valued at $1.5 million per year, how much could the military afford to spend
Improvised explosive devices (IEDs) are responsible for many deaths in times of war. Unmanned ground vehicles (robots) can be used to disarm the IEDs and to perform other tasks as well. The robots cost $140,000 each and the U.S. Army signed a contract to purchase 4000 of them now. What is the
Julong Petro Materials, Inc. ordered $10 million worth of seamless tubes for its drill collars from the Timken Company of Canton, Ohio. (A drill collar is the heavy tubular connection between a drill pipe and a drill bit.) At 10% per year interest, what is the annual worth of the purchase over a
Irvin Aerospace of Santa Ana, CA, just received a 5-year contract to develop an advanced space capsule airbag landing attenuation system for NASA’s Langley Research Center. The company’s computer system uses fluid structure interaction modeling to test and analyze each airbag design
A proximity sensor attached to the tip of an endoscope could reduce risks during eye surgery by alerting surgeons to the location of critical retinal tissue. If a certain eye surgeon expects that by using this technology, he will avoid lawsuits of $0.6 and $1.35 million 2 and 5 years from now,
Automationdirect, which makes 6-inch TFT color touch screen HMI panels, is examining its cash flow requirements for the next 5 years. The company expects to replace office machines and computer equipment at various times over the 5-year planning period. Specifically, the company expects to spend
A pulp and paper company is planning to set aside$150,000 now for possibly replacing its large synchronous refiner motors. If the replacement isn’t needed for 8 years, how much will the company have in the account if it earns interest at a rate of 8% per year?
What is the future worth six years from now of a present cost of $375,000 to Corning, Inc. at an interest rate of 10% per year?
French car maker Renault signed a $95 million contract with ABB of Zurich, Switzerland, for automated underbody assembly lines, body assembly workshops, and line control systems. If ABB will be paid in 3 years, when the systems are ready, what is the present worth of the contract at 12% per year
a. How much money could Tesla-Sino Inc., a maker of superconducting magnetic energy storage systems, spend each year on new equipment in lieu of spending $850,000 five years from now, if the company’s rate of return is 18% per year?b. What is the spreadsheet function to display an answer with the
A maker of mechanical systems can reduce product recalls by 25% if it purchases new packaging equipment. The cost of the new equipment is expected to be $40,000 four years from now. How much could the company afford to spend now, instead of 4 years from now, if it uses a minimum attractive rate of
GE Marine Systems is planning to supply a Japanese shipbuilder with aero-derivative gas turbines to power 11DD-class destroyers for the Japanese Self-Defense Force. The buyer can pay the total contract price of $2,100,000 two years from now, when the turbines will be needed, or an equivalent amount
Since many U.S. Navy aircraft are at or near their usual retirement age of 30 years, military officials want a precise system to assess when aircraft should be taken out of service. A computational method developed at Carnegie Mellon maps in 3-D the microstructure of aircraft materials in their
Arctic and Antarctic regions are harsh environments in which to take data. A TempXZ 3000 portable temperature recorder can take and store 32,767 measurements at40 to 150 °C. A research team from the University of Nova Scotia needs 20 of the recorders, and they are trying to decide whether they
How much money could RTT Environmental Services borrow to finance a site reclamation project if it expects revenues of $280,000 per year over a 5-year cleanup period? Expenses associated with the project are expected to be $90,000 per year.Assume the interest rate is 10% per year.
The current cost of liability insurance for a consulting firm is $65,000 per year. If the cost is expected to increase by 4% each year, what will be the cost 5 years from now?
Atlas Long-Haul Transportation is considering installing Valutemp temperature loggers in all of its refrigerated trucks for monitoring temperatures during transit. If the systems will reduce insurance claims by $100,000 two years from now, how much should the company be willing to spend now if it
Sensotech, Inc., a maker of microelectromechanical systems, believes it can reduce product recalls by 10% if it purchases new software for detecting faulty parts at a cost of $225,000. The minimum attractive rate of return is 15% per year.a. How much does the company have to save each year for 4
Petroleum Products, Inc. is a pipeline company that provides petroleum products to wholesalers in the Northern United States and Canada. The company is considering purchasing insertion turbine flowmeters to provide better monitoring of pipeline integrity. If these meters prevent one major
The Border Patrol is considering the purchase of a new helicopter for aerial surveilance of the New Mexico-Texas border with Mexico. A similar helicopter was purchased 4 years ago at a cost of$1,400,000. At an interest rate of 7% per year, what would be the equivalent value today of that$1,400,000
Assume the cost of homeland security border fence is $3 million per mile. If the life of such a fence is 10 years, what is the equivalent annual cost of a 10-mile long fence at an interest rate of 8% per year? Develop the answer using: (a) tabulated factor values, (b) a financial calculator, and(c)
Ametek Technical & Industrial Products (ATIP)manufactures brushless blowers for boilers, foodservice equipment, and fuel cells. The company borrowed $17,000,000 for a plant expansion and repaid the loan in eight annual payments of$2,737,680, with the first payment made one year after the company
A small oil company wants to replace its Micro Motion Coriolis flowmeters with Emerson FSeries flowmeters in Hastelloy construction. The replacement process will cost the company$50,000 three years from now. How much money must the company set aside each year beginning one year from now in order to
Bodine Electric makes gear motors with a threestage, selectively hardened gearing cluster that is permanently lubricated. If the company borrows$20 million for a new warehouse/distribution facility, what is the amount to repay the loan in six equal annual payments? The loan’s interest rate is 10%
How large of a repayment must an engineer make each year starting next year if she borrows$60,000 now to start up her new consulting office and she promises to make equal annual payments for 5 years. Assume the interest rate is 8% per year. Develop the answer using (a) tabulated factor values, (b)
What is the present worth of a uniform series of 10 payments that begin one year from now in the amount of $6000 if the interest rate is 10% per year?
By filling carbon nanotubes with miniscule wires made of iron and iron carbide, incredibly thin nanowires can be extruded by blasting the carbon nanotubes with an electron beam. If Gentech Technologies spends $12.7 million now in developing the process, how much must be received in licensing fees
Meggitt Systems, a company that specializes in extreme-high-temperature accelerometers, is investigating whether it should update equipment now or wait and do it later. If the cost now is$280,000, what is the equivalent amount 2 years from now at an interest rate of 12% per year?
Loadstar Sensors is a company that makes load/force sensors based on capacitive sensing technology. The company wants to accumulate$30 million for plant expansion five years from now. If the company already has $15 million in an investment account for the expansion, how much more must the company
How much will be in an investment account 12 years from now if you deposit $3000 now and$5000 four years from now and the account earns interest at a rate of 10% per year? Use (a) tabulated factor values, (b) TVM functions on a financial calculator, and (c) built-in functions on a spreadsheet.
Determine the amount of money a bank will loan to a developer who repays the loan by selling 7 view lots at $120,000 each two years from now.Assume the bank’s interest rate is 10% per year.Use (a) the tabulated factor values in your book,(b) TVM functions on a financial calculator, and(c)
What is the present worth of a future payment of$19,000 in year 7 if the interest rate is 10% per year using (a) the tabulated factor values in your book, (b) TVM functions on a financial calculator, and (c) built-in functions on a spreadsheet?
The Moller Skycar M400 is a flying car known as a personal air vehicle (PAV). The cost is $995,000, and a $100,000 deposit holds one of the first 100 vehicles. Assume a buyer pays the $885,000 balance 3 years after making the $100,000 deposit. At an interest rate of 10% per year, determine the
If an engineer invested $15,000 on January 1, 1991, into a retirement account that earned 6% per year interest, how much money will be in the account on January 1, 2016?
What is the present worth of $30,000 in year 8 at an interest rate of 10% per year?
Find the correct numerical value for the following factors from the interest tables:a. (FP,10%,20)b. (AF,4%,8)c. (PA,8%,20)d. (AP,20%,28)e. (FA,30%,15)Determination of P, F, A, n, and i
For the spreadsheet built-in function PV(i%,n,A,F), the only parameter that can be completely omitted is:a. i%b. nc. Ad. F
The time it would take for money to double at a simple interest rate of 5% per year is closest to:a. 10 yearsb. 12 yearsc. 15 yearsd. 20 years
The cost of tuition at a public university was$200 per credit hour 5 years ago. The cost today(exactly 5 years later) is $268. The annual rate of increase is closest to:a. 4%b. 6%c. 8%d. 10%
In most engineering economy studies, the best alternative is the one which:a. Will last the longest timeb. Is the easiest to implementc. Costs the leastd. Is the most politically correct
An investment of $8,000 nine years ago has accumulated to $16,000 now. The compound rate of return earned on the investment is closest to:a. 6%b. 8%c. 10%d. 12%
The simple interest rate per year required to accumulate the same amount of money in 2 years at 20% per year compound interest is:a. 20.5%b. 21%c. 22%d. 23%
Amounts of $1000 one year ago and $1345.60 one year hence are equivalent at the following compound interest rate per year:a. 12.5% per yearb. 14.8% per yearc. 17.2% per yeard. None of the above
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