New Semester
Started
Get
50% OFF
Study Help!
--h --m --s
Claim Now
Question Answers
Textbooks
Find textbooks, questions and answers
Oops, something went wrong!
Change your search query and then try again
S
Books
FREE
Study Help
Expert Questions
Accounting
General Management
Mathematics
Finance
Organizational Behaviour
Law
Physics
Operating System
Management Leadership
Sociology
Programming
Marketing
Database
Computer Network
Economics
Textbooks Solutions
Accounting
Managerial Accounting
Management Leadership
Cost Accounting
Statistics
Business Law
Corporate Finance
Finance
Economics
Auditing
Tutors
Online Tutors
Find a Tutor
Hire a Tutor
Become a Tutor
AI Tutor
AI Study Planner
NEW
Sell Books
Search
Search
Sign In
Register
study help
business
engineering economy
Engineering Economy 8th edition Leland T. Blank, Anthony Tarquin - Solutions
A grandfather is planning to leave his only granddaughter well off when she reaches the age of 25. He plans to deposit a lump sum now, which is her second birthday, such that she will have enough money to live comfortably without working. He wants her to have an amount that would have the same
Joan, the project manager, asks you to evaluate alternatives A and B on the basis of their PW values using a real interest rate of 10% per year and an inflation rate of 3% per year(a) Without any adjustment for inflation,(b) With inflation considered. Also, write the spreadsheet functions that will
The company you work for is considering a new product line projected to have the net cash flows (NCF) shown. The values are in future dollars, which have been inflated by 5% per year. Because the plant manager is unsure how the present worth is calculated, he asked you to do it in two ways over the
Some of the following future cash flows have been expressed in then current (future) dollars and others in CV dollars. Use an interest rate of 10% per year and an inflation rate of 6% per year.(a) Find the present worth.(b) Use a spreadsheet to find the PW value using one NPV function with all cash
Find the present worth of earthmoving equipment that has a first cost today of $150,000, an annual operating cost of $60,000, and a salvage value of 20% of the first cost after 5 years; these estimates being in future dollars. Assume the interest rate is 10% per year and that inflation has averaged
Because retail supermarket corporations operate on a low ROR, it is common to use a market MARR of about 3% per year. What real return rate is implied from a market interest rate of 3% per year when the annual inflation rate is 4% per year? Explain your answer.
Calculate the inflation-adjusted interest rate when the annualized inflation rate is 7% per year and the real interest rate is 4% per year.
The new CEO of a high-tech incubator company wants to entice venture capitalists by promising a growth rate of 40% per year for at least 3 years. Therefore, the company’s MARR was set at 40%. If this ROR was actually realized, but the CEO did not account for the observed 8% per year inflation
α-β, Inc., a high-tech company in San Diego, whose stock trades on the NYSE exchange, uses a MARR of 25% per year. If the chief financial officer (CFO) said the company expects to make a real rate of return of 20% per year on its investments over the next 3-year period, what is the company
For years, Jake has practiced the “buy now, pay later ” philosophy of money management. For example, he purchased a car 3 years ago with a 6-year (72 month) loan at 7% per year interest. He has refinanced the loan each year at a higher interest rate; 7.5% last year and 8.5% this year. With a
During periods of hyperinflation, prices increase rapidly over short periods of time. One of the worst cases of hyperinflation in history occurred in Zimbabwe in 2008 where prices doubled every day. If that rate continued for just 1 week, how much would a French baguette cost after 7 days if the
In 2015, a retired person in the United States who received maximum social security benefits got $2699 per month, which represented a 1.7% cost of living adjustment (COLA) over 2014.(a) Determine the monthly benefit in 2018 if the COLA adjustments are 1.5%, 2.1%, and 2.7%, respectively, for the
Emissions of heat-trapping carbon dioxide (CO2) reached an all-time high of 36.9 gigatons in 2014, a 2.5% increase over 2013. The International Energy Agency said this further reduces the chance that the world could avoid a dangerous rise in global average temperature by 2020.(a) If the discharge
The Bank of England has an inflation calculator website that uses the UK price index to show how the cost of goods and services has changed since 1750. The website reveals that something that cost £10,000 in 1920 cost £7984 in 1940. What was the average annual inflation rate over that 20-year
The Bureau of Labor Statistics has a website (www.bls.gov) that contains a Consumer Price Index inflation calculator that uses the average CPI to adjust the purchasing power of money over different periods of time. The CPI index value has been calculated every year since 1913. The calculator
Jack has tracked the annual inflation rate (shown below) for a top-rated sportsman-level fishing outfit that he has always hoped to own. It cost $1000 ten years ago, but he could not afford it over the intervening years.(a) Estimate the cost now, which is the end of year 10.(b) Is the cost estimate
An engineer who is now 65 years old began planning for retirement 40 years ago. At that time, he thought that if he had $1 million when he retired, he would have more than enough money to live his remaining life in luxury. Assume the inflation rate over the 40-year time period averaged a constant
A UK-based life insurance company will pay a cash-value sum of £500,000 when the insured reaches the age of 65. The insured will be 65 years old 27 years from today.(a) Determine the cash value of the £500,000 in CV purchasing power, assuming inflation remains constant at 3% per year.(b) Write
According to NACE’s April 2014 Salary Survey, engineering majors held 8 of the top 10 spots on the list of top-paid majors for the Class of 2014 bachelor’s degree graduates. Graduates in petroleum engineering were the highest paid at $93,500, earning $28,000 more than the next highest paid at
The federal-level Pell Grant program provides financial aid to needy college students. The grant increases annually to account for inflation. The maximum total Pell Grant award increased from $5550 to $5,730 from 2013 to 2015.(a) What was the average inflation rate per year in this prior 2-year
For many years, college cost (including tuition, fees, room, and board) increases have been higher than the inflation rate, averaging 5% to 8% per year. According to the College Board’s Trends in College Pricing, the average total costs in 2015 dollars were $19,548 for students attending in-state
The lease cost for a specialized highway design software package is estimated to be $13,000 for each of years 1, 2, and 3 (future dollars).(a) Calculate the CV amount today (year 0) of each future cost estimate at the inflation rate of 6% per year.(b) Develop a spreadsheet and graph for inflation
In an effort to reduce pipe breakage, water hammer, and product agitation, a French chemical company plans to install several chemically resistant pulsation dampeners. The cost of the dampeners today is €106,000, but the chemical company has to wait until a permit is approved for its
Determine today’s purchasing power of $1,000,000 thirty years in the future, if if = 15% per year and f = 5% per year.
How many future dollars 10 years from now will have the same buying power as $10,000 today? The market interest rate is 12% per year and the inflation rate is 7% per year.
In an inflationary period, what is the difference between(a) Inflated dollars and “then-current” future dollars, and(b) “Then-current” future dollars and constant-value future dollars?
If a 3D printer increased in cost at exactly the inflation rate, what was the inflation rate if the printer costs exactly twice as much now as it did 10 years ago?
How do you convert a unit of inflated currency (e.g., a dollar) into a constant-value currency statement?
The cost of equipment to apply epoxy paint to a warehouse floor is $1400. Materials and supplies (masking tape, surface repair material, solvents, cleanup supplies, etc.) will cost $2.03 per ft2. Alternatively, a contractor can be hired annually to do the job for $3.25 per ft2. If the cost of the
A mixing process for laboratory-grade sodium phosphate has an estimated first cost of $320,000 with annual costs of $40,000. Income is expected to be $98,000 per year. At a MARR of 20% per year, the payback period is closest to:(a) 3 years(b) 15 years(c) 19 years(d) It will never pay off
A wireless monitored process has fixed cost of $40,000 per year and variable cost of $30 per unit. An IoT-based process using “Internet of Things” technology has fixed costs of $80,000 per year. If the two processes break even at a production level of 4000 units per year, the variable cost of
A jalapeno canning company is faced with a make/ buy decision. Cardboard shipping cartons can be purchased for $0.60 each or made in-house. If manufactured, two machines will be required. Machine X will cost $20,000 and have a life of 6 years with a $2000 salvage value. Machine Y will cost $11,000
The pieces of equipment required to place 160 cubic yards of concrete in 1 day by experienced workmen are two gasoline engine vibrators and one concrete pump. If the vibrators cost $76 per day and the concrete pump costs $580 per day, the variable cost of the equipment per cubic yard of concrete is
You saw that there was a gasoline price war going on in a small town 27 miles from where you live (54 miles round trip), so you are thinking about driving there to fill the tank in your pick-up truck, which gets 18 miles per gallon. You think it will take 22 gallons to fill your tank. If the cost
An automobile leasing company has a contract with a new car dealer to do major repairs for $720 per car. The leasing company estimates that for $400,000, it could buy equipment to service their own cars at a cost of $300 per car. If the equipment will have a salvage value of 10% of its first cost
In linear breakeven analysis, if process A has a variable cost of $45 per unit and process B has a variable cost of $31 per unit, which alternative would be preferred if the breakeven point is 7400 units and production is expected to be 6200 units?(a) Process A(b) Process B(c) Process B if its
The National Potato Cooperative purchased a deskinning machine last year for $150,000. Revenue for the first year was $50,000. Over the total estimated life of 8 years, use a spreadsheet to estimate the remaining equivalent annual revenues (years 2 through 8) to ensure breakeven by recovering the
A window frame manufacturer is searching for ways to improve revenue from its triple-insulated sliding windows, sold primarily in the far northern areas of the United States. Alternative A is an increase in TV and radio marketing. A total of $300,000 spent now is expected to increase revenue by
A multinational engineering consulting firm that wants to provide resort accommodations to special clients is considering the purchase of a three bedroom lodge in upper Montana that will cost $250,000. The property in that area is rapidly appreciating in value because people anxious to get away
In desalting groundwater that contains a significant amount of sulfates, the concentrate that is generated during the desalting process can sometimes be tough on equipment, so the equipment’s useful life is uncertain. For a treatment train that has an initial cost of $90,000 and an estimated
A manufacturer of diaphragm seals has identified the cash flows shown for manufacturing and sales functions. Determine the no-return payback period.First cost of equipment,....................$ −130,000Annual expenses, $ per year................−45,000Annual revenue, $ per
Two machines can be used to produce a part from titanium. The costs and other cash flows associated with each alternative are estimated. The salvage values are constant regardless of when the machines are replaced. Determine which alternative(s) should be selected for further analysis if
A process for producing the mosquito repellant Deet has an initial investment of $200,000 with annual costs of $50,000. Income is expected to be $90,000 per year.(a) What is the payback period at i = 0% per year? A i = 12% per year? (Round your answers to the nearest integer.)(b) What is the
The price of a car you want is $42,000 today. Its price is expected to increase by $1000 each year. You now have $25,000 in an investment account, which is earning 10% per year. How many years will it be before you have enough to buy the car without borrowing any money? Solve by (a) Trial and
(a) What is the approximate number of years you would have to sell a mobile phone app to break even if income is estimated to be $50,000 per year, expense is $15,000 per year, your initial investment is $280,000, and your MARR is 10% per year?(b) Find the exact payback period using a spreadsheet
Accusoft Systems is offering small business owners a software package that keeps track of many accounting functions from bank transactions to sales invoices. The site license will cost $39,000 to install and will require a fee of $6000 every 3 months. If your company can save $13,500 every quarter
(a) How long would it take to recover an investment of $245,000 in enhanced CNC controls that include axis control to eight axes on the milling model, if the associated income is $92,000 per year, expense is $38,000 per year, and the salvage value is estimated to be 15% of the first cost? Use a
Darnell Enterprises constructed an addition to its building at a cost of $70,000. Extra annual expenses are expected to be $1850, but extra income will be $14,000 per year. How long will it take for the company to recover its investment at an interest rate of 10% per year? Also, write the
State why payback analysis should be used only as a supplemental analysis tool when an economic study is performed.
Claris Water Company makes and sells filters for water drinking fountains for the public. The filter sells for $50. Recently a make/buy analysis was done based on the need for new manufacturing equipment. The equipment first cost of $200,000 and $25,000 annual operation cost comprise the fixed
The Ecology Group wishes to purchase a piece of equipment for recycling of various metals. Machine 1 costs $123,000, has a life of 10 years, an annual cost of $5000, and requires one operator at a cost of $24 per hour. It can process 10 tons per hour. Machine 2 costs $70,000, has a life of 6 years,
Process X is estimated to have a fixed cost of $40,000 per year and a variable cost of $60 per unit in year 1, decreasing by $5 per unit per year thereafter. Process Y will have a fixed cost of $70,000 per year and a variable cost of $10 per unit in year 1, increasing by $1 per unit per year
Alfred Home Construction is considering the purchase of five dumpsters and the transport truck to store and transfer construction debris from building sites. The entire rig is estimated to have an initial cost of $125,000, a life of 8 years, a $5000 salvage value, an operating cost of $40 per day,
James, the plant manager at Global Foundries (GF), received estimates from two contractors to improve traffic flow and repave the parking areas at his production facility. Proposal A includes new curbs, grading, and paving at an initial cost of $250,000. The expected life of the parking lot surface
An online commercial directory service must decide between composing the ads for its clients inhouse or paying a production company to compose them. To develop the ads in-house, the company will have to purchase computers, printers, and a database management system at an estimated cost of $42,000.
Three methods can be used for producing heat sensors for high temperature furnaces. The interest rate for the economic evaluation is 10% per year.Method A: Fixed cost of $140,000 per yearProduction cost of $62 per partMethod B: Fixed cost of $210,000 per yearProduction cost of $28 per partMethod C:
Microsurfacing is part of a pavement restoration and maintenance program that seals the surface of a street that has minor cracking to prevent water from penetrating into the base material. The annual cost of the equipment (truck, tank, valves, etc.) is $109,000 per year and the material cost is
There are a number of reasons for not paving a rural road, including low traffic volume, property owners who do not want it paved, speed control, and political issues. On the other hand, paved roads have lower road-user operating costs and are less costly to maintain. In Washington County, a report
Process A has a fixed cost of $160,000 per year and a variable cost of $50 per unit. For Process B, 10 units can be produced in 1 day at a cost of $200. If the company’s MARR is 10% per year, what will the annual fixed cost have to be for Process B in order for the two alternatives to have the
A construction company can purchase a used backhoe for $90,000 and spend $450 per day in operating costs. The equipment will have a 5 year life with no salvage value. Alternatively, the company can lease the equipment for $800 per day. How many days per year must the company use the equipment in
Pure gasoline has an energy density of 115,600 BTU per gallon while ethanol has an energy density of 75,670 BTU per gallon. If gasoline costs $3.50 per gallon,(a) what would the cost of pure ethanol have to be in order for the energy costs of the two fuels to break even?(b) What would the price of
A two-lane road surface can be finished with concrete or asphalt. Concrete will cost $2.3 million per mile (excluding right-of-way, environmental mitigation, or soil and site conditions) and will last for 20 years. If signing, mowing, and winter maintenance are not included, the basic maintenance
A rotational molding operation has fixed costs of $10,000 per year and variable costs of $50 per unit. If the process is automated via conveyor, its fixed cost will be $22,800 per year but its variable cost will be only $10 per unit. Determine the number of units each year necessary for the two
An automobile company is investigating the advisability of converting a plant that manufactures economy cars into one that will make retro sports cars. The initial cost for equipment conversion will be $250 million with a 20% salvage value anytime within a 5-year period. The cost of producing a car
You work for Bellevue Window Products. While performing an analysis for a new window product, you found a report from last year that provided the following information regarding the manufacture of a similar product: annual production rate = 40,000 units; selling price = $70 per unit; fixed
A financial services consulting company bought an office building for $900,000. The company has 10 professional staff members. Monthly expenses for salaries, utilities, grounds maintenance, etc. are $1.1 million. The average billing rate per professional is $90 per hour. Use an interest rate of 1%
The landfill for Wellsburg has an area of 30 acres available for receiving waste from the city of 40,000 people who generate 25,000 tons of municipal solid waste (MSW) per year. If the fixed cost of the landfill is $300,000 per year and the operating cost is $12 per ton, how much must the landfill
If the cost of gasoline is $2.50 per gallon, how far out of your way (one way) could you afford to drive (in miles) to a service station that has gasoline at $2.25 per gallon if your vehicle gets 30 miles per gallon and you will fill up with 20 gallons of fuel? Consider only the cost of gasoline in
Freeport McMoRan engineers estimated that the capital investment necessary for recovering valuable metals (nickel, silver, gold, etc.) from a copper refinery’s wastewater would be $150 million. The equipment is expected to have a useful life of 10 years with no salvage value. The amount of metal
The costs and revenue projections for a new product are estimated. What is the estimated profit at a production rate of 20% above breakeven?Fixed cost = $500,000 per yearProduction cost per unit = $200Revenue per unit = $250
Handheld fiber optic meters with white light polarization interferometry are useful for measuring temperature, pressure, and strain in electrically noisy environments. The fixed costs associated with manufacturing are $800,000 per year. If variable costs are $290 per unit and the company sells 4000
An independent over-the-road (OTR) truck driverowner paid $68,000 for a used tractor-trailer. The salvage value of the rig after 5 more years of use is expected to be $36,000. The operating cost is $0.50 per mile and the base mileage rate (i.e., revenue) is $0.61 per mile.(a) How many miles per
A manufacturing process at Simplicity XP has a fixed cost of $40,000 per month. A total of 100 units can be produced in 1 day at a cost of $3000 for materials and labor for the day. If the company’s MARR is 12% per year, compounded monthly, how many units must be sold each month at $50 per unit
The fixed cost at Harley Motors is $5 million annually. The main product has revenue of $89 per unit and $45 variable cost. Estimate the following:(a) Breakeven quantity per year;(b) Annual profit if 100,000 units are sold, and if 200,000 units are sold.
From the five independent projects shown below, the one(s) to select with a capital limitation of $35,000 is/are:(a) P(b) PT(c) T(d) Q Initlal PW at 12% Investment $, Life, Years per Year, $ Project -12,000 8,000 -25,000 9. 12,600 R -17,000 4 3,500 -35,000 2,000 6. -20,000 10 15,800
The profitability index at 10% per year for a project that has an initial investment of $400,000, an AOC of $80,000 per year, revenue of $170,000 per year, and a salvage value of $60,000 after its 5-year life is closest to:(a) 0.95(b) 1.06(c) 1.38(d) 0.86
A dependent project is one whose acceptance or rejection is based on:(a) Its rate of return with respect to the MARR(b) The amount of capital available for investment(c) A decision about another project(d) The amount receivable in salvage value of the existing asset
There are five independent projects that must be evaluated on the basis of the profitability index.(a) Given an investment limit of $35 million and a MARR of 10% per year, select from the projects.(b) Write the spreadsheet function for a project, specifically for project 5, which will correctly
Determine the IROR and profitability index at 12% per year for an industrial smart-grid system that has a first cost of $400,000, an AOC of $75,000 per year, estimated annual savings of $192,000, and a salvage value of 20% of its first cost after a 5-year useful life.
The Board of Directors at Senico Systems is considering investment in five independent projects, all of which can be considered to last indefinitely. The MARR is 12% per year.(a) Determine which projects should be selected on the basis of IROR if the investment limitation is $60,000.(b) Determine
Rincon, LLC is considering a project that will require an initial investment of $750,000 with estimated net income of $135,000 per year for 10 years.(a) Determine the IROR, PI, and PW values at MARR = 12% per year.(b) For which of these measures is the project economically justified?(c) Reflect on
Use repeated spreadsheet solutions of the capital budgeting problem with investment limits ranging from $0.5 million to $2.5 million (in $0.25 million increments, i.e., $250 increments since all estimated values are in $1000 units) to determine the best selections. Once done, develop a graph that
Develop the linear programming model and use a spreadsheet to select the vendor(s) that offer the best opportunity economically. The city’s MARR is 5% per year and the investment limit is $1,600,000.
Use linear programming, a spreadsheet, and the Solver tool to select from the independent, unequal life projects in Problem 12.18.Data from problem 12.18 Project Cost, $ Millions Life, Years NCF, $ per Year Project -1.5 360,000 -3.5 10 600,000 3 -1.8 520,000 4 -2.0 820,000 4.
Using a spreadsheet,(a) Work Problem 12.19 as stated,(b) Expand the bundles to allow up to three projects and no more than $25,000 invested.Data from problem 12.19 4 Project Investment, $ -5000 -7000 -9000 -10,000 |Life, years 2 3 4 3 3 5 4 Project 2 3 4 Year NCF Estimates, $ per Year 1000 500
The PW of five independent projects have been calculated at an MARR of 12% per year. Select the best combination at a capital investment limit of (a) $25,000,(b) $49,000, and(c) Unlimited. Initial Project Investment, $ Years Life, PW, $ -15,000 8,540 A -26,000 12,100 M -10,000 3,000 -25,000 10
Feng Seawater Desalination Systems has established a capital investment limit of $800,000 for next year for projects that target improved recovery of highly brackish groundwater. All projects have a 4-year life and the MARR is 10% per year.(a) Select any or all of the projects.(b) Project Z is a
Abel and Family Perfumes wants to add one or more of four new products to its current line of colognes. Historically, Abel has used a 5 year project recovery period and a MARR of 20% per year.(a) Determine which of the four options the company should undertake on the basis of a present worth
An engineer at Suncore Micro, LLC calculated the present worth of mutually exclusive bundles, each comprised of one or more independent projects.(a) Select the acceptable bundle if the capital investment limit is $50,000 and the MARR is 15% per year.(b) What happens to any leftover capital if not
Develop all(a) Acceptable,(b) Nonacceptable mutually exclusive bundles for four independent projects if the investment limit is $350 and the following project selection restriction applies: Project 2 can be selected only if project 3 is selected.Project ..................................... Initial
Develop all of the mutually exclusive bundles from independent projects identified as A, B, and C.
How many mutually exclusive bundles can be formed from the following number of different independent projects:(a) 5;(b) 8;(c) 13?(d) By what amount is each total reduced if the DN project is not an option?
State the difference between a contingent project and a dependent project.
List at least three characteristics of a capital budgeting study.
The cost characteristics of a CO testing machine that was purchased 5 years ago for $100,000 are shown below. The equation to determine the AW of retaining the tester one more year and then replacing it is:(a) AW = ˆ’15,000(A/P,i,1) ˆ’ 54,000 + 10,000(A/F,i,1)(b) AW =
A presently owned machine has the projected market value and M&O costs shown below. At an interest rate of 10% per year, the AW for keeping the machine 2 more years is closest to:(a) $29,650(b) $32,840(c) $35,770(d) $39,720 Market Value, $ M&O Cost, $ Year 32,000 25,000 24,000 14,000 24,000
Assume the MARR is 10% per year for this analysis. A presently owned machine that was purchased 8 years ago for $450,000 is under consideration for replacement. It has an annual operating cost of $120,000 per year and a salvage value of $40,000 whenever it is replaced. The challenger has a first
From the data shown below, the economic service life of the asset is:(a) 2 years(b) 3 years(c) 4 years(d ) 5 years AW of AW of AW of Years Retained First Cost, $ Operating Cost, $ Salvage Value, $ - 165,000 -86,429 -60,317 -47,321 -36,000 99,000 39,095 -36,000 -42,000 18,127 4 -43,000 5,464 3,276 5
A milling machine with enhanced CNC controls that allow for high speed machining of free-form parts was purchased 2 years ago for $195,000. The company wants to purchase a recently available faster model with control up to 8 axes for $240,000. The presently owned machine can be sold today for
The economic service life of an asset is:(a) The length of time required to recover the first cost of the asset(b) The time when the operating cost is at a minimum(c) The time when the salvage value goes below 25% of the first cost(d) The time when the AW of the asset is at a minimum
Showing 3500 - 3600
of 4707
First
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
Last
Step by Step Answers
Get 50% OFF
Claim Now
