ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Chapter 13, Problem 35P
To determine
To find:Marginal cost of running the machinery and assessment of viability of keeping the old machine instead of replacing it with a new one.
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Example: Consider a machine that costs 20000 TL and has a useful life of 5 years. Let the scrap value be 4000 TL at the end of 5 years. Let the annual operating and maintenance cost be 500 TL. The business expects to earn 5000 TL/year thanks to this machine. If l=10%, buy this machine?
13,000
6. The Imperial Chemical Company is considering purchasing a chemical analysis machine worth $13,000.
Although the purchase of this machine will not produce any increase in sales revenues, it will result in a
reduction of labour costs. In order to operate the machine properly, it must be calibrated each year. The
machine has an expected life of 6 years, after which it will have no salvage value. The following table
summarizes the annual savings in labour cost and the annual maintenance costs in calibration over 6 years:
Year (n)
Net Cash Flow ($)
0
Costs ($)
Savings ($)
-13,000
1
2
3
4
2,300
6,000
3,700
2,300
7,000
4,700
2,300
9,000
6,700
2,300
9,000
6,700
5
2,300
9,000
6,700
6
2,300
9,000
6,700
Find the internal rate of return for this project.
[6]
101
Use the following information to answer the question which immediately follows
Y = 2,000, GT-200, Cd=400 +0.9(Y-T) - 600r, 1200-80r, L-0.5Y 500, M-5000, P-7.35, n² = 0.02
What is the value of r?
Select one
a 0.58
Ob. 0.45
OC 0.62
Od 0.38
13
Chapter 13 Solutions
ENGR.ECONOMIC ANALYSIS
Ch. 13 - Prob. 1QTCCh. 13 - Prob. 2QTCCh. 13 - Prob. 3QTCCh. 13 - Prob. 4QTCCh. 13 - Prob. 5QTCCh. 13 - Prob. 1PCh. 13 - Prob. 2PCh. 13 - Prob. 3PCh. 13 - Prob. 4PCh. 13 - Prob. 5P
Ch. 13 - Prob. 6PCh. 13 - Prob. 7PCh. 13 - Prob. 8PCh. 13 - Prob. 9PCh. 13 - Prob. 10PCh. 13 - Prob. 11PCh. 13 - Prob. 12PCh. 13 - Prob. 13PCh. 13 - Prob. 14PCh. 13 - Prob. 15PCh. 13 - Prob. 16PCh. 13 - Prob. 17PCh. 13 - Prob. 18PCh. 13 - Prob. 19PCh. 13 - Prob. 20PCh. 13 - Prob. 21PCh. 13 - Prob. 22PCh. 13 - Prob. 23PCh. 13 - Prob. 24PCh. 13 - Prob. 25PCh. 13 - Prob. 26PCh. 13 - Prob. 27PCh. 13 - Prob. 28PCh. 13 - Prob. 29PCh. 13 - Prob. 30PCh. 13 - Prob. 31PCh. 13 - Prob. 32PCh. 13 - Prob. 33PCh. 13 - Prob. 34PCh. 13 - Prob. 35PCh. 13 - Prob. 36PCh. 13 - Prob. 37PCh. 13 - Prob. 38PCh. 13 - Prob. 39PCh. 13 - Prob. 40PCh. 13 - Prob. 41PCh. 13 - Prob. 42PCh. 13 - Prob. 43PCh. 13 - Prob. 44PCh. 13 - Prob. 45PCh. 13 - Prob. 46PCh. 13 - Prob. 47PCh. 13 - Prob. 48PCh. 13 - Prob. 49PCh. 13 - Prob. 50PCh. 13 - Prob. 51PCh. 13 - Prob. 52PCh. 13 - Prob. 53PCh. 13 - Prob. 54PCh. 13 - Prob. 55PCh. 13 - Prob. 56P
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