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case11solutions - Our Harbor Delivery Service GfDS) seeks...

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Our Harbor Delivery Service GfDS) seeks to standardize boat brands and fuel types used in each of its branch offices. The team has identified the size and configuration of the boat that best suits HDS's needs but must now decide on a common fuel type-gasoline or diesel. In order to do so, Net Present Value of both types of power units over a service period of 4 years is to be compared. A gasoline boat is purchased for $76,586, has average speed of21.1 knots, insurance premiums of $500 per yr, annual maintenance cost of $6000, consumes 26 gal/tv, oil changes of $25, and gas at $3 . 15 per gallon. It will receive a higher speed engine value of $50 per day and will be sold for $38,000 after 4 years of service. Assuming the gasoline boat will cover 200 nautical miles per day, will operate 18 hours per day 7 days a week for 4 years, and a minimum aftractive rate of return (MARR) of i 8%. the Net Present Value of the easoline boat is $789-935.43 A diesel boat is purchased for $97,995, has average speed of 77.4 knots, insurance premiums of $0 per yr, annual maintenance cost of $9000, consumes 17 gal/lv, oil changes of $57, and diesel at $2.95 per gallon. It will be sold for $48,000 after 4 years of service. Assuming the diesel boat wiil cover 200 nautical miles per day, will operate 18 hours per day 7 days a week for 4 years, and a minimum aftractive rate of return (MARR) of 18ol0, the Net Present Value of the diesel boat is $692-353.21.
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Assuming 200 nautical rniles covered per day Boat unit Years in Service Days in Service Nautical miles per day Knots (nautical miles/hr) Operation hrs per day ldle hrs per day Fuel consumed during operation (eal/hr)
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This note was uploaded on 03/11/2010 for the course CEVE 322 taught by Professor Segner during the Spring '10 term at Rice.

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case11solutions - Our Harbor Delivery Service GfDS) seeks...

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