Engineering Economic Analysis

Problems 139 (a)What was the effective annual interest rate? (b)What was,the nominal annual interest rate? 4-99 How long will it ...

140 MORE INTERESTFORMULAS different interest schedules. The first schedule uses an annual effective interest rate of 13%. The se ...

ur Problems 141 Set up a spreadsheet to calculate the account balance at the end of~e first year (EOM12). The spreadsheet must i ...

After Completing ThisChapter... The student should be able to: · Define and apply thepresent worth criteria. · Compare two compe ...

Present Worth Analysis Boeing Versus Airbus For several years, Boeing has been working on development of the Sonic Cruiser, an i ...

.. - .. ...- 144 PRESENTWORTH ANALYSIS In Chapters 3 and 4 we accomplished two important tasks. First, we presented the concept ...

-.- ----- -------. Assumptions in Solving Economic Analysis Problems 145 Viewpoint of Economic Analysis Studies When we make eco ...

146 PRESENTWORTH ANALYSIS Income Taxes This aspect of economic analyses, like inflationand deflation,must be considered to findt ...

Applying Present Worth Techniques 147 Applying Present Worth Techniques One of the easiest ways to compare mutually exclusive al ...

.. ~~... - +.. h._.. + + 148 PRESENTWORTH ANALYSIS ,#";ci~~;'~i31~~'~~~It; A firm is considering which of two mechanical devices ...

Applying PresentWorth Techniques 149 SOL~TION This problem illustrates staged construction. The aqueduct may be built in a singl ...

150 PRESENTWORTH ANALYSIS Allied PW of cost=1600 - 325(P/F,7%, 5)=1600 - 325(0.7130) = 1600 - 232 =$1368 Since it is only thedif ...

. Applying Present Worth Techniques 151 In Example 5-4, we compared two alternatives and selected the one in which present worth ...

152 PRESENTWORTH ANALYSIS Assuming the replacement Speedy equipment 5 years hence will also cost $1500, r Original Speedy Invest ...

Applying Present Worth Techniques 153 Alternative 1 Salvage TerminalValueat Value End of 10thYear t t 0-1-2-3-4-5-6-7-8-9-10-11- ...

-.. ... u .._. -. 154 PRESENTWORTH ANALYSIS As.illustrated in Figure 5-1, we may assumethat Alternative 1 will bereplacedby an i ...

Applying Present Worth Techniques. 155 the $200 would remain in the account. At the end of the second year, the $200 balance wou ...

156 PRESENT WORTH ANALYSIS A city plans a pipeline to transport water from a distant watershed area to the city. The pipeline wi ...

I I I ~ Applying Present Wortb Techniques 157 $8 million A = 4960 n=oo Capitalized Cost p --. FIGURE 5-2 Using the sinking fund ...

158 PRESENTWORTH ANALYSIS Multiple Alternatives So far the discussion has been based on examples with only two alternatives.But ...