Engineering Economic Analysis

1\

Problems 487

9 The WhatZit Company has decided to fund six of nine

I project proposals for ~e coming budget year. Deter-
Iiii.mine the next capital budget for WhatZit.What is the
MARR?

Project

A B C D E F G H I

First Cost

$15,000

20,000

30,000

25,000

40,000

50,000

35,000

60,000

75,000

Annual

Benefits

$ 4,429

6,173

9,878

6,261

11,933

11,550

6,794

12,692

14,058

Life

(years)

4 4 4 5 5 5 8 8 8

15-10 Which projects should be done if the budget is

8I:iiiiiiEiii. $100,000? What is the opportunity cost of capital?

II"!

(^11)
i
-- --~--
Life Annual Salvage
Project (years) First Cost Benefit Value
(^120) $20,000 $4000
(^220) 20,000 (^3200) $20,000
(^330) 20,000 (^3300) 10,000
(^415) 20,000 4500
(^525) 20,000 (^4500) - 20,000
(^610) 20,000 5800
(^715) 20,000 (^4000) 10,000
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