Suggested problems_Chp 6_sol

Suggested problems_Chp 6_sol - Suggested problems for...

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Suggested problems for Chapter 6 - Solutions 1. (6.3) Cost of heat loss without insulation is $2,000 per year. For 1-inch thick insulation (Alternative 1) Cost of heat loss = 12% x 2,000 = 240 Cost of insulation = 0.6 x 1,000 = 600 For 2-inch thick insulation (Alternative 2) Cost of heat loss = 8% x 2,000 = 160 Cost of insulation = 1.1 x 1,000 = 1,100 This is a cost alternative, so choose the insulation which minimizes total cost. By the PW method, PW 1 = – 600 – 240(P/A,6%,10) = – $2,366.42 PW 2 = – 1,100 – 160(P/A,6%,10) = – $2,277.62 Select 2-inch thick insulation . 2. (6.7) PW A (20%) = – 28,000 + (23,000 - 15,000)(P/A,20%,10) + 6,000(P/F,20%,10) = $6,509 PW B (20%) = – 55,000 + (28,000 - 13,000)(P/A,20%,10) + 8,000(P/F,20%,10) = $9,180 PW C (20%) = – 40,000 + (32,000 - 22,000)(P/A,20%,10) + 10,000(P/F,20%,10) = $3,540 This is an investment alternative, so select the project that maximizes profit. Select Alternative B
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This note was uploaded on 02/07/2012 for the course IE 343 taught by Professor Vincent,g during the Spring '08 term at Purdue University-West Lafayette.

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Suggested problems_Chp 6_sol - Suggested problems for...

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