EGG 307 HW 8 - $478.63 + $1,342.8/n A = $2,164 Solve for =...

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EGG 307: Homework No. 8 Sample Solutions Problem 6-4 MARR = 20% Incremental Analysis A B C C vs A B vs C Investment -$30,000 -$60,000 -$40,000 -$10,000 -$20,000 units/year 15000 20000 18000 Price $3.10 $4.40 $3.70 Annual revenue $46,500 $88,000 $66,600 $20,100 $21,400 Variable cost $1.00 $1.40 $0.90 Annual fixed cost -$15,000 -$30,000 -$25,000 Total cost -$30,000 -$58,000 -$41,200 -$11,200 -$16,800 Market value $10,000 $10,000 $10,000 $0 $0 Useful life 10 10 10 10 10 IRR 54.5% 49.2% 63.1% 88.8% 18.9% PW $145,000 $250,000 $224,000 > MARR < MARR AW $14,500 $25,000 $22,400 Select C Keep C Payback period 1.82 2.00 1.57 Problem 11-6 (b) Let n A = efficiency of Pump A At 2,000 hrs/year of operation EUAC(Pump A) = $2,410(A/P,12%,8) - 80(A/F,12%,8) + $0.06x2,000x15x0.746/n A = $478.63 + $1,342.8/n A EUAC(Pump B) = $4,820(A/P,12%,8) + $0.06x2,000x10x0.746/0.75 = $2,164 To find the breakeven efficiency of Pump A EUAC(Pump A) = EUAC(Pump B)
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Unformatted text preview: $478.63 + $1,342.8/n A = $2,164 Solve for = 0.7967 ==&gt; 79.76% Pump A will be prefered over Pump B if its efficincey is over 79.67% Graph: Next page Graph n A EUAC(Pump A) EUAC(Pump B) 60% $2,717 $2,164 65% $2,544 $2,164 70% $2,397 $2,164 75% $2,269 $2,164 80% $2,157 $2,164 85% $2,058 $2,164 90% $1,971 $2,164 Problem 12-2 Option 1: Build a 4-lane bridge now PW = -$3,500,000 Option 2: Build a 2-lane bidge now, add two lanes later: Compute expected PW based on probabilities and costs of when the additional two lanes will be required (see table below) Decision: Build a 4-lane bridge now. $1,000 $1,500 $2,000 $2,500 $3,000 50% 60% 70% 80% 90% 100% EUAC(Pump A) EUAC(Pump B) Pump A More Economical Pump B more economical Efficiency of Pump A (n A )...
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This note was uploaded on 07/13/2009 for the course EGG a taught by Professor Dr.kaseko during the Spring '09 term at University of Nevada, Las Vegas.

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EGG 307 HW 8 - $478.63 + $1,342.8/n A = $2,164 Solve for =...

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