Beruflich Dokumente
Kultur Dokumente
Solved Problems
Text Book: Basics of Engineering Economy; Leland Blank and Anthony Tarquin; McGraw-Hill, 2008
Chapter 9:
9.23 AWX = -82,000(A/P,15%,2) 30,000 + 42,000(A/F,15%,2)
= -82,000(0.61512) 30,000 + 42,000(0.46512)
= $-60,905
Purchase robot X
9.5
Chapter 8:
Example: A company has two machine alternatives whose economic lives are 6 years. The
price and annual income of these machines are given in the following table. According to the
no return payback period, determine the alternative the company should invest.
Alternatives
Cost (SR)
Machine A
200 000
45 000
Machine B
300 000
60 000
Example: A company wants to buy a production device for their new factory. They have
two alternatives, whose cash flows are given in the following table. According to these
cash flows,
determine the no return payback period of these alternatives.
Alternative A
Alternative B
Cost
3 000 000 SR
3 500 000 SR
Annual income
decreasing by 300.000 SR
year thereafter.
4 years
8 years
Useful life
Alternative A
Years
2
900 000
Cash Flow
-3 000 000
1 200 000
Cumulative value
-3 000 000
PBA= 4 years
600 000
4
300 000
0
Alternative B
Years
Cash Flow
-3 500 000
100 000
400 000
700 000
1 000 000
1 300 000
Cumulative value
-3 500 000
-3 400 000
-3 000 000
-2 300 000
-1 300 000
PBB= 5 years
According to the payback periods, alternative A should be preferred.
8.2
(a) TC = FC + vQ
= 2.58 million + 395Q
(b) QBE = 2.58 million/(550-395)
= 16,645
(c) 1.2Q = 1.2(16,645) = 19,974
Profit = R TC
= 19,974(550) 2,580,000 - 395(19,974)
= $515,970
8.44 (a) Yes; cash flows sum to $139,100, which exceeds the $75,000 first cost.
(b) Solve PW = 0 relation for i*.
PW = -75,000 -10,500(P/F,i,1) + + 105,000(P/F,i ,5) = 0
i* = 13.96%
(IRR function)
(c) Calculate PW at 7% by year to determine when PW turns positive. Start with
N = 3 years.
N = 3: PW = -75,000 -10,500(P/F,7%,1) +18,600(P/F,7%,2) -2000(P/F,7%,3)
= -75,000 -10,500(0.9346) +18,600(0.8734) -2000(0.8163)
= $-70,201
N = 4: PW = -70,201 +28,000(P/F,7%,4)
= $-48,840
N = 5: PW = -48,840 +105,000(P/F,7%,5)
= $26,025
Investment is paid back plus 7% during year 5, in part due to large cash flow at
sale time.
Chapter 7:
CONVENTION B/C=
,
..+
+
,
..
MODIFIED B/C=
where I.C.: costs or initial cost, Sv: savings and S: salvage value.
Chapter 9:
Read Sections 9.1-9.2, and 9.5.
Read and solve examples 9.4, 9.2.
Read and solve Problems: 9.5, 9.23.
HWK_CH. 9: PROPLEMS 9.6, 9.7, 9.8, 9.9, 9.22.
Chapter 8:
Read Sections 8.1, and 8.5.
Read and solve examples 8.1, 8.7.
Read and solve Problems: 8.2, 8.44.
HWK_CH. 8: PROPLEMS 8.12, 8.13, 8.45, 8.54 to 8.57.
Chapter 7:
Read Sections 7.1, and 7.2.
Read and solve example 7.2.
Read and solve Problems: 7.11, 7.16 AND 7.20.
HWK_CH. 7: PROPLEMS 7.10, 7.12, 7.14, 7.15, 7.18, 7.32 to 7.35.
Chapter 5:
Chapter 4:
Read Sections 4.1, 4.2, 4.3 and 4.5.
Read and solve examples 4.1, 4.3 and 4.7.
HWK_CH. 4: PROPLEMS 4.9, 4.15, 4.23, 4.28, 4.36, 4.42 and 4.45 to 4.48.
Chapter 2:
Read Sections 2.1 to 2.4.
Read and solve examples 2.1 to 2.11.
HWK_CH. 2: PROPLEMS 2.12, 2.35, 2.36, 2.40, 2.54, Find (P0)in Fig. 2.16a-b (page 44), 2.64, 2.74, 2.80
and 2.85.
Chapter 1:
Read Sections 1.1 to 1.7.
Read and solve examples 1.1 to 1.13.
HWK_CH. 1: PROPLEMS 1.19, 1.22, 1.28, 1.37, 1.41 to 1.45, and ) In the plan 5, example 1.6 (page 12):
Show that equal end-of-year payment is $1252.28.