IE341PS12 BC - Spring '07 IE 341 ENGINEERING ECONOMY PS #12...

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Spring ’07 IE 341 – ENGINEERING ECONOMY PS #12 Q1: (11.3) Perform a conventional B-C analysis for the six mutually exclusive alternatives in the table above. Also, compute the conventional B-C values for each individual alternative and compare the values obtained with the modified B-C values. The MARR is 10% per year. Alternative Project A B C D E F Investment $1000 1500 2500 4000 5000 7000 Annual Savings in cash disbursements 150 375 500 925 1125 1425 Salvage Value 1000 1500 2500 4000 5000 7000 Q2: (11.8) Consider the two types of equipment in the following table and determine which choice is better if a firm desires to invest as long as the B-C ratio is greater than or equal to one. The firm’s MARR is 10% per year. Assume repeatability and show all work. RS-422 RS-511 Capital investment $500 $1750 Useful life 6 years 12 years Market (salvage) value $125 $375 Annual benefits $238 $388 Annual O&M costs $108 $113 Q3: (Quiz ’03) 10,000 people are visiting each year a recreational facility, with benefits of $7 per person. The administration is considering an enlargement plan that will pose an
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This note was uploaded on 07/30/2009 for the course INDUSTRIAL 304 taught by Professor Temeldursun during the Spring '09 term at Boğaziçi University.

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IE341PS12 BC - Spring '07 IE 341 ENGINEERING ECONOMY PS #12...

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