ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Chapter 13, Problem 7P
To determine

To find: Economical life of pipe.

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The purchase price of an instrument is $12,000 and its estimated maintenance costs are $500 for the first year, $1500 for the second and $2500 for the third year. After three years of use the instrument is replaced; it has no salvage value. Compute the present equivalent cost of the instrument using 10% interest
Jumbo Company uses 1,100 units of an particular item each year. Carrying the item in inventory costs $200 per unit per year.  It costs $150 for each order of  the chemical. The firm uses the item at a constant rate each year. Calculate the Economic Order Quantity AND Use the data from problem above and assume that Jumbo Company operates 250 days per year. Also assume that its total usage is 1,100 units per year.  There is a lead time of 2 days and Jumbo desires to keep a safety stock of 4 units. Calculate the reorder point
A new punching machine will cost $4,382. At the end of its 10 years useful life, the machine can be sold for $780. The new machine will reduce annual expenses by $620. The interest rate is 10%.
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