Since aw i 15 27457889 145025000 8792111 and aw ii 15

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Since AW I (15%) = -$274,578.89 + $14.50(25,000) = $87,921.11 and AW II (15%) = -$456,615.67 + $30.825(18,000) = $98,234.33 product II should be launched
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Principles of Engineering Economic Analysis , 5th edition Break-Even Chart for Two Competing Products
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Principles of Engineering Economic Analysis , 5th edition Example 13.3 A contractor is considering adding a compressor to its equipment inventory of 8 compressors. If demand exceeds the number of compressors available, additional units are rented at a charge of $50/day. It costs $6,000 to purchase a compressor; O&M cost per compressor is $7.50/hr if owned and $2.50/hr if rented. Assuming an 8-hr operating day, using a 5-yr planning horizon and a 15% MARR, determine the break-even number of days a year that at least one compressor must be rented.
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Principles of Engineering Economic Analysis , 5th edition Example 13.3 (Solution) Let X denote the number of days a year that more than 8 compressors will be required. The EUAC for each alternative (Purchase versus Rent) is EUAC P (15%) = $6,000( A|P 15%,5) + $7.50(8) X = $1,789.80 + $60 X EUAC R (15%) = $50X + $2.50(8) X = $70 X Setting the equivalent uniform annual cost equal for the two alternatives yields a break-even value of X = 178.98 or 179 days/year. Hence, if the contractor anticipates that a demand for more than 8 compressors will occur 179 days or more during the year, then an additional compressor should be purchased.
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Principles of Engineering Economic Analysis , 5th edition Supplementary Analysis Supplementary Analysis Sensitivity Analysis
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Principles of Engineering Economic Analysis , 5th edition In performing a sensitivity analysis we are seeking to determine the impact on the measure of economic worth when values of one or more parameters vary over specified ranges.
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Principles of Engineering Economic Analysis , 5th edition Example 13.6 A $500,000 SMP investment is being considered. It is anticipated that annual savings of $92,5000 will result from the investment. A salvage value of $50,000 is expected at the end of the 10-yr planning horizon. The MARR is 10%. Analyze the sensitivity of annual worth to errors in estimating (1) the initial investment, (2) the annual savings, (3) the salvage value, (4) the duration of the investment, and (5) the MARR. Specifically, consider an error range of + 50% displays the impact
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