Engineering Economy 17th Global Edition William G. Sullivan ,Elin M. Wicks ,C. Patrick Koelling - Solutions

Unlock the full potential of your studies with our comprehensive solutions for the "Engineering Economy 17th Global Edition" by William G. Sullivan, Elin M. Wicks, and C. Patrick Koelling. Access online answers key and solutions pdf for each chapter, ensuring you tackle every question with confidence. Our solution manual and instructor manual offer step-by-step answers to solved problems, enhancing your understanding of this essential textbook. Explore our test bank for detailed questions and answers, and enjoy free download options for selected materials. Achieve academic success with our expertly curated chapter solutions.

2-19. 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. (2.2)a. What is the breakeven point for this company?b. The company currently has 73,000 subscribers and
2-18. 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 profit for a mine producing 20,000 tons per year (which is at 100% capacity) when zinc sells
2-17. A local defense contractor is considering the production of fireworks as a way to reduce dependence on the military. The variable cost per unit is $40. The fixed cost that can be allocated to the production of fireworks is negligible. The price charged per unit will be determined by the
2-16. An electric power plant uses solid waste for fuel in the production of electricity. The cost Y in dollars per hour to produce electricity is Y = 12 + 0.3X + 0.27X2, where X is in megawatts. Revenue in dollars per hour from the sale of electricity is 15X−0.2X2. Find the value of X that gives
2-15. 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 is p = $38 + 2,700 D − 5,000 D2 , for D > 1, where p is the price per unit in dollars and D is the demand per
2-14. A large wood products company is negotiating a contract to sell plywood overseas. The fixed cost of the company which can be allocated to the production of the plywood is $1,000,000 per month. The variable cost per thousand board feet is $131.50. Price charged will be determined by p = $700
2-13. 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 for an annual printing of this particular product. The fixed costs per year (i.e., per
2-12. 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 by the Wicks Company is given by this equation: D = (2,000 − p) /0.10. What is the demand
2-11. A company has established that the relationship between the sales price for one of its products and the quantity sold per month is approximately p = 75 – 0.1D units (D is the demand or quantity sold per month and p is the price in dollars). The fixed cost is $1,000 per month and the
2-10. A mail carrier at the U.S. Postal Service works on Sunday delivering high-priority letters and packages. She can deliver 15 items per hour. The fixed hourly costs (vehicle depreciation, insurance, etc.) equal $42 and the hourly variable costs (time and a half wages, etc.) total $0.50 per item
2-9. 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 your home and social life. Second, you can invest the money in a high-tech firm’s common stock.
2-8. A friend of yours has been thinking about quitting her regular day job and going into business for herself. She currently makes $60,000 per year as an employee of the Ajax Company, and she anticipates no raise for at least another year. She believes she can make $200,000 as an independent
2-7. 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) remachine the obsolete parts at a cost of $30,000 and then hopefully resell them for $60,000 or (2) scrap
2-6. You have been invited by friends to fly to Germany for Octoberfest next year. For international travel, you apply for a passport that costs $97 and is valid for 10 years. After you receive your passport, your travel companions decide to cancel the trip because of “insufficient funds.” You
2-5. Your company presently uses a crew of its own employees for all major maintenance. On average, 40 major repairs are performed each year at 24 lost production hours per repair. Keeping the crew costs $1,000,000 per year plus any lost production cost. Lost production costs are estimated at
2-4. 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 for the hauling of refuse from each site to the power plant are shown in Table P2-4. TABLE
2-3. 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 combustion engine, the students claim that an automobile can be propelled 15 miles per day
2-2. Given below is a numbered list of cost terms. For each of the definition statements that follow, place the number of the cost term in the blank that makes the statement a correct definition. Each cost term is used only once. (2.1)Numbered List of Cost Terms: 1. Recurring 5. Opportunity 2.
2-1. 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 will be saved for every pound of weight reduction over the engine’s 8-year expected life. Given
1-21. 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 energy consumption by up to 5%. Identify the assumptions necessary to make this statement valid for
1-20. A deep-water oil rig has just collapsed into the Gulf of Mexico. Its blowout-preventer system has failed, so thousands of barrels of crude oil each day are gushing into the ocean. List some alternatives for stopping the unchecked flow of oil into the Gulf. (1.3)
1-19. A home mortgage is “under water” when the amount of money owed on it is much greater than (say, twice) the market value of the home. Discuss the economic and ethical issues of walking away from (i.e., defaulting on) an underwater loan. Assume you have $10,000 equity in the home and your
1-18. 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 copper (and 97.5% zinc) 2.5% to save money. Your favorite aunt has a collection of 5,000 pennies minted before 1982, and she intends on gifting the collection to
1-17. “What you do at work is your boss’ business” is a timely warning for all employees to heed. Last year, your company installed a new computer surveillance program in an effort to improve office productivity. As a courtesy, all employees were informed of this change. The license for the
1-16. Extended Learning Exercise. Bad news: You have just wrecked your car! You need another car immediately because you have decided that walking, riding a bike, and taking a bus are not acceptable. An automobile wholesaler offers you $2,000 for your wrecked car “as is.” Also, your insurance
1-15. Storm doors have been installed on 50% of all homes in Anytown, USA. The remaining 50% of homeowners without storm doors think they may have a problem that a storm door could solve, but they’re not sure. Use Activities 1, 2, and 3 in the engineering design process (Table 1-1) to help these
1-14. While studying for the engineering economy final exam, you and two friends find yourselves craving a fresh pizza. You can’t spare the time to pick up the pizza and must have it delivered. “Pick-Up-Sticks” offers a 1-1/4-inch-thick (including toppings), 20-inch square pizza with your
1-13. The Almost-Graduating Senior Problem. Consider this situation faced by a first-semester senior in civil engineering who is exhausted from extensive job interviewing and penniless from excessive partying. Mary’s impulse is to accept immediately a highly attractive job offer to work in her
1-12. During your first month as an employee at Greenfield Industries (a large drill-bit manufacturer), you are asked to evaluate alternatives for producing a newly designed drill bit on a turning machine. Your boss’ memorandum to you has practically no information about what the alternatives
1-11. The manufacturer of Brand A automobile tires claims that its tire can save 110 gallons of fuel over 55,000 miles of driving, as compared to a popular competitor (Brand B). If gasoline costs $4.00 per gallon, how much per mile driven does this tire save the customer (Brand A versus Brand B)?
1-10. Often it makes a lot of sense to spend some money now so you can save more money in the future. Consider filtered water. A high-tech water filter cost about $60 and can filter 7,200 ounces of water. This will save you purchasing two 20-ounce bottle of filtered water every day, each costing
1-9. Automobile repair shops typically recommend that their customers change their oil and oil filter every 3,000 miles. Your automobile user’s manual suggests changing your oil every 5,000–7,000 miles. If you drive your car 15,000 miles each year and an oil and filter change costs $30, how
1-8. Studies have concluded that a college degree is a very good investment. Suppose that a college graduate earns about 75% more money per hour than a high-school graduate. If the lifetime earnings of a high-school graduate average $1,200,000, what is the expected value of earning a college
1-7. Focus on the difference between feasible alternatives (Principle 2)! Insulated concrete forms (ICF) can be used as a substitute for conventional wood framing in building construction. Heating and cooling bills will be about 50% less than in a similar wood-framed building in upstate New York.
1-6. What is an economic tradeoff ? Give several tradeoffs that you make every day. (1.2)
1-5. Henry Ford’s Model T was originally designed and built to run on ethanol. Today, ethanol (190-proof alcohol) can be produced with domestic stills for about $0.85 per gallon. When blended with gasoline costing $4.00 per gallon, a 20% ethanol and 80% gasoline mixture costs $3.37 per gallon.
1-4. Tyler just wrecked his new Nissan, and the accident was his fault. The owner of the other vehicle got two estimates for the repairs: one was for $803 and the other was for $852. Tyler is thinking of keeping the insurance companies out of the incident to keep his driving record “clean.”
1-3. A typical discounted price of a AAA battery is $0.75. It is designed to provide 1.5 volts and 1.0 amps for about an hour. Now we multiply volts and amps to obtain power of 1.5 watts from the battery. Thus, it costs $0.75 for 1.5 Watt-hours of energy. How much would it cost to deliver one
1-2. The installation of synthetic green turf in drought-stricken California costs $8 per square foot. For 1,000 square feet of turf, the installed cost would be$8,000. Refer to Principle 4 and list the advantages and disadvantages of synthetic turf in monetary terms. (1.2)
1-1. A large electric utility company spews 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 over the next five years to reduce its annual emissions by 5%. More will be spent after five years
12-27. Refer to Problem 12-21. Use a spreadsheet to extend the number of trials to 500. Compute E(AW) and plot the cumulative average AW. Are 500 trials enough to reach steady state? (12.7)
12-26. Refer to Example 12-4. After additional research, the range of probable useful lives has been narrowed down to the following three possibilities:Useful Life, Years (N) p(N)14 0.3 15 0.4 16 0.3 How does this affect E(PW) and SD(PW)? What are the benefits associated with the cost of obtaining
12-25. Extended Learning Exercise A firm must decide between constructing a new facility or renting a comparable office space. There are two random outcomes for acquiring space, as shown in Figure P12-25. Each would accommodate the expected growth of this company over the next 10 years. The cost of
12-24. Extended Learning Exercise The additional investment in a new computer system is a certain$300,000. It is likely to save an average of $100,000 per year compared to the old, outdated system. Because of uncertainty, this estimate is expected to be normally distributed, with a standard
12-23. If the interest rate is 10% per year, what decision would you make based on the decision tree diagram in Figure P12-23? (12.8)
12-22. Simulation results are available for two mutually exclusive alternatives. A large number of trials have been run with a computer, with the results shown in Figure P12-22.Discuss the issues that may arise when attempting to decide between these two alternatives. (12.6, 12.7)
12-21. A company that manufactures automobile parts is weighing the possibility of investing in an FMC(Flexible Manufacturing Cell). This is a separate investment and not a replacement of the existing facility. Management desires a good estimate of the distribution characteristics for the AW. There
12-20. The market value of a certain asset depends upon its useful life as follows:Useful Life Market Value 3 years $18,000 4 years $12,000 5 years $6,000a. The asset requires a capital investment of $120,000, and MARR is 15% per year. Use Monte Carlo simulation and generate four trial outcomes to
12-19. Two investment alternatives are being considered.The data below have been estimated by a panel of experts, and all cash flows are assumed to be independent. Life is not a variable.Alternative A Alternative B Std. Std.Expected Deviation Expected Deviation End of Cash of Cash Cash of Cash Year
12-18. Twomutually exclusive investment alternatives are being considered, and one of them must be selected.Alternative A requires an initial investment of $13,000 in equipment. Annual operating and maintenance costs are anticipated to be normally distributed, with a mean of $5,000 and a standard
12-17. The use of three estimates (defined here as H =high, L = low, andM = most likely) for random variables is a practical technique for modeling uncertainty in some engineering economy studies. Assume that the mean and variance of the random variable, Xk, in this situation can be estimated by
12-16. Suppose that a random variable (e.g., market value for a piece of equipment) is normally distributed, with mean = $175 and variance = 25$2. What is the probability that the actual market value is at least$171? (12.5)
12-15. In an industrial setting, process steam has been found to be normally distributed with an average value of 25,000 pounds per hour. There is an 80% probability that steam flow lies between 20,000 and 30,000 pounds per hour. What is the variance of the steam flow? (12.5)
12-14. A hospital administrator is faced with the problem of having a limited amount of funds available for capital projects. He has narrowed his choice down to two pieces of x-ray equipment, since the radiology department is his greatest producer of revenue. The first piece of equipment(Project A)
12-13. A potential project has an initial capital investment of $100,000. Net annual revenues minus expenses are estimated to be $40,000 (A$) in the first year and to increase at the rate of 6.48% per year. The useful life of the primary equipment, however, is uncertain, as shown in the following
12-12. The tree diagram in Figure P12-12 describes the uncertain cash flows for an engineering project. The analysis period is two years, and MARR = 15% per year.Based on this information,a. What are the E(PW), V(PW), and SD(PW) of the project?b. What is the probability that PW ≥ 0? (12.3)
12-11. The purchase of a new piece of electronic measuring equipment for use in a continuous metalforming process is being considered. If this equipment were purchased, the capital cost would be $418,000, and the estimated savings are $148,000 per year. The useful life of the equipment in this
12-10. An energy conservation project is being evaluated.Four levels of performance are considered feasible. The estimated probabilities of each performance level and the estimated before-tax cost savings in the first year are shown in the following table:Performance Cost Savings Level (L) p(L)
12-9. Refer to Problem 12-8. Assume the following changes: the study period is eight years; the ski lift will be depreciated by using the MACRS Alternative Depreciation System (ADS); the ADS recovery period is seven years; MARR = 15% per year (after-tax);and the effective income tax rate (t) is
12-8. The owner of a ski resort is considering installing a new ski lift that will cost $900,000. Expenses for operating andmaintaining the lift are estimated to be $1,500 per day when operating. The U.S. Weather Service estimates that there is a 60% probability of 80 days of skiing weather per
12-7. A diesel generator is needed to provide auxiliary power in the event that the primary source of power is interrupted. Various generator designs are available, and more expensive generators tend to have higher reliabilities should they be called on to produce power. Estimates of reliabilities,
12-6. A very important levee spans a distance of 10 miles on the outskirts of a large metropolitan area. Hurricanes have hit this area twice in the past 20 years, so there is concern over the structural integrity of this particular levee. City engineers have proposed reinforcing and increasing the
12-5. Consider the following cash flow diagram. The probability of the pessimistic value of N = 4 years is 0.25, the probability of the most likely value of N = 6 years is 0.60, and the probability of the optimistic value of N = 9 years is 0.15. What is the expected value of the present worth of
12-4. It costs $780,000 to drill a natural gas well. Operating expenses will be 18% of the revenue from the sale of natural gas from this particular well.If found, natural gas from a highly productive well will amount to 340,000 cubic feet per day. The probability of locating such a productive
12-3. A new snow making machine utilizes technology that permits snow to be produced in ambient temperature of 70 degrees Fahrenheit or below. The estimated cash flows for the ski resort contemplating this investment are uncertain as shown below (note: pr. = probability).Capital investment $180,000
12-2. A bridge is to be constructed now as part of a new road. An analysis has shown that traffic density on the new road will justify a two-lane bridge at the present time.Because of uncertainty regarding future use of the road, the time at which an extra two lanes will be required is currently
12-1. A large mudslide caused by heavy rains will cost Sabino County $1,250,000 per occurrence in lost property tax revenues. In any given year, there is one chance in 100 that a major mudslide will occur.A civil engineer has proposed constructing a culvert on a mountain where mudslides are likely.
11-42. A centrifuge is required in a chemical separation process. Two centrifuges (A and B) are available and summarized below. The net annual revenues for centrifuge B are not known. If the MARR is 10% per year and salvage values can be ignored, what is the minimum value of X to make centrifuge B
11-41. A carpet manufacturer in Georgia plans to expand its plant for a capital investment of $500,000. The extra capacity will permit the company to produce 400,000 yards of carpet each year during the plant’s five-year life.Each yard of carpet will produce a revenue of $2.00, and the plant’s
11-40. Two electric motors are being economically evaluated for use in a submersible robotic device. Each is capable of delivering 90 horsepower to a necessary application that the device performs. Data for the mutually exclusive motors are as follows.Motor General Electric Phillips Initial
11-39. An initial investment of $5,500 is profitable.(a) True (b) False
11-38. This project (based upon the most likely estimates)is profitable.(a) True (b) False
11-37. Variations in the profit and useful life of the project are inversely related.(a) True (b) False
11-36. If the profit (R−E) is decreased by 5%, this project is not profitable.(a) True (b) False
11-35. If the initial investment is increased by more than 9%, the project is profitable.(a) True (b) False
11-34. If the demand for bread at this supermarket is 35,000 loaves per year, what strategy should be adopted for acquiring bread? Both Machine A and Machine B are capable of meeting annual demand.(a) Continue buying from the supplier.(b) Install Machine A.(c) Install Machine B.(d) Install both
11-33. What is the minimum number of loaves that must be sold per year to justify installing Machine B instead of buying the loaves from the supplier?(a) 37,529 (b) 15,637 (c) 22,076 (d) 75,059(e) 7,506
11-32. What is the minimum number of loaves that must be sold per year to justify installingMachine A instead of buying the loaves from the supplier?(a) 7,506 (b) 22,076 (c) 37,529 (d) 75,059(e) 15,637
11-31. An analysis of accidents in a rural state indicates that widening a highway from 30 ft to 40 ft will decrease the annual accident rate from 1,250 to 710 per million vehicle-miles. Calculate the average daily number of vehicles that should use the highway to justify widening on the basis of
11-30. A highway bridge is being considered for replacement. The new bridge would cost $X and would last for 20 years. Annual maintenance costs for the new bridge are estimated to be $24,000. People will be charged a toll of $0.25 per car to use the new bridge.Annual car traffic is estimated at
11-29. Refer to Problem 6-24. Set up a spreadsheet to answer various “what if” questions such as “How does the IRR vary as the cost of gasoline takes on these values: $3.00 per gallon, $4.00 per gallon, and$5.00 per gallon?” Also, how does IRR change when the ownership period changes across
11-28. Refer to Problem 6-8. Disposing of incandescent light bulbs is just like getting rid of and recycling glassware in general. However, this is not the case for CFLs. Disposing of CFLs is complicated by the fact that each lamp contains a small amount of mercury, which is a very environmentally
11-27. The world’s largest carpet maker has just completed a feasibility study of what to do with the 16,000 tons of overruns, rejects, and remnants it produces every year. The company’s CEO launched the feasibility study by asking, Why pay someone to dig coal out of the ground and then pay
11-26. Suppose that, for an engineering project, the optimistic, most likely, and pessimistic estimates are as shown in the accompanying table.Develop a spreadsheet to determine the AW for each of the three estimate conditions. It is thought that the most critical elements are useful life and net
11-25. It is desired to determine the most economical thickness of insulation for a large cold-storage room. Insulation is expected to cost $150 per 1,000 square feet of wall area per inch of thickness installed, and to require annual property taxes and insurance of 5% of the capital investment. It
11-24. We know the standard means of cutting the high cost of driving our automobiles—slow down your speed, no jack rabbit starts, inflate tires properly, clean air filters regularly, and so on. Another way to reduce the cost of driving is to join every big-rigger in the United States and half of
11-23. Extended Learning Exercise Construct the spreadsheet used in Example 11-6. Use this spreadsheet as a starting point to answer the following questions. Be sure to clearly state your assumptions. (11.3)a. How sensitive is the decision to the amount of the down payment for the purchase option?
11-22. Extended Learning Exercise Consider these two alternatives for solid-waste removal (11.3, Chapter 7):Alternative A: Build a solid-waste processing facility.Financial variables are as follows:Capital investment $108 million in 2008(commercial operation started in 2008)Expected life of
11-21. An aerodynamic three-wheeled automobile(the Dart) runs on compressed natural gas stored in two cylinders in the rear of the vehicle. The$13,000 Dart can cruise at speeds up to 80 miles per hour, and it can travel 100 miles per gallon of fuel. Another two-seater automobile costs $10,000 and
11-20. A bridge is to be constructed now as part of a new road. Engineers have determined that traffic density on the new road will justify a two-lane road and a bridge at the present time. Because of uncertainty regarding future use of the road, the time at which an extra two lanes will be
11-19. Suppose that, for a certain potential investment project, the optimistic, most likely, and pessimistic estimates are as shown in the accompanying table. (11.4)a. What is the AW for each of the three estimation conditions?b. It is thought that the most critical factors are useful life and net
11-18. An office building is considering converting from a coal-burning furnace to one that burns either fuel oil or natural gas. The cost of converting to fuel oil is estimated to be $80,000 initially;annual operating expenses are estimated to be $4,000 less than that experienced when using the
11-17. Two traffic signal systems are being considered for an intersection. One system costs$32,000 for installation and has an efficiency rating of 78%, requires 28 kW power (output), incurs a user cost of $0.24 per vehicle, and has a life of 10 years. A second system costs $45,000 to install, has
11-16. Refer to problem 5-20. How sensitive is the annual worth to ± 30% changes in the MARR? Are changes in the MARR really a significant consideration in this problem? (11.3)
11-15. An industrial machine costing $14,000 will produce net cash savings of $5,000 per year. The machine has a five-year useful life but must be returned to the factory for major repairs after three years of operation.These repairs cost $5,000. The company’s MARR is 10%per year. What IRR will
11-14. The managers of a company are considering an investment with the following estimated cash flows.MARR is 15% per year.Capital investment $30,000 Annual revenues $20,000 Annual expenses $5,000 Market value $1,000 Useful life 5 years The company is inclined to make the investment; however, the
11-13. A group of private investors borrowed $30 million to build 300 new luxury apartments near a large university. The money was borrowed at 6% annual interest, and the loan is to be repaid in equal annual amounts over a 40-year period. Annual operating, maintenance, and insurance expenses are
11-12. Refer to Problem 11-11. The best estimate for the reduction of labor hours for the new system is 17% (compared with the used system). Investigate how sensitive the decision is to (a) changes in the MARR, (b)changes in the market value of the new system, and (c) the productivity improvement
11-11. A large city in the midwest needs to acquire a street-cleaning machine to keep its roads looking nice year round. A used cleaning vehicle will cost $85,000 and have a $20,000 market (salvage) value at the end of its five-year life. A new system with advanced features will cost $150,000 and
11-10. A nationwide motel chain is considering locating a new motel in Bigtown, USA. The cost of building a 150-room motel (excluding furnishings) is $5 million.The firm uses a 15-year planning horizon to evaluate investments of this type. The furnishings for this motel must be replaced every five

Showing 700 - 800 of 4707

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Last

Engineering Economy 17th Global Edition William G. Sullivan ,Elin M. Wicks ,C. Patrick Koelling - Solutions

Step by Step Answers