CHAPTER 2: ANSWERS TO ASSIGNED PROBLEMS Hauser General Chemistry I revised 8/03/08 2.79 Describe a major contribution to science made by each of the following scientists: (b) Thomson Measured charge to mass ratio of the electrons (e/m); proposed plum pud
Discussion 7 Solutions
Problem 1.
Problem 2.
1,750,00
0 First Cost
200,000 Salvage
Not used in
MACRS
6 Actual Life
200% Factor
MACRS
7 Life
Period
1
2
3
4
5
6
Straight
SumofLine
year digits
Depr
BV
$258,333.3
3
$1,491,666.67
$258,333.3
3
$1,233,333.33
$2
ISyE 313 Fall13
Discussion 6
Replacement & Retention Decisions
Some Terminology:
Defender & Challenger Two mutually exclusive alternatives. Defender is currently installed
asset, challenger is the potential replacement. Replacement study compares these tw
U
niversity of WisconsinMilwaukee
lndustrial & Manufacturing Engineering Department
Course Syllabus
Fall2015
COURSE NUMBER AND TTTLE
IME 360 Engineering Economic Analysis, 3 cr.,
U
COURSE DESCRIPTION
Concept of time value of money. Economical evaluation
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Problems
(35
the compounding of interest. In engineering economy, the group that most accu
rately represents the situation under study should be used.
PROBLEMS
1.
10.
What amount will be owed in 5 years if $5,000 is borrowed now at 10% per
year simple
Problems :/ l 03
\p If.
0 The actual interest rate received or paid is the interest rate that sets the equiv
alent receipts equal to the equivalent disbursements.
 Equivalence calculations involving bonds, loans, and working capital pro—
Vide interestin
140
Chap. 5 Equivalence Involving Inﬂation
PROBLEMS
1.
Using Table 5.2, indicate those years for which there was a decrease in prices
(deﬂation) given that the change in prices is based on
a. Producer prices.
b. Consumer prices.
Given past historical tr
180
Chap. 6 Bases for Comparison of Alternatives
The unrecovered balance, L1, measures the balance remaining for a cash ﬂow
evaluated at the internal rate of return, it. The project balance is based on the
same formula as unrecovered balance, except tha
Problems 2 2 5
P/A,15,1
PW(15)B1 = —$40,000 + $14,000(2.8550)
= —$30
P/A,15,4 P/P,lS,‘l
PW(15)B2 : —$70,000 + $25,000(2.8550) + $15,000(O.5718)
$9,952
Why? Because the preceding calculation includes all the initial cost in the PWU) cal
culation so that
Problems
PROBLEMS
1.
331
1. Replacement of each alternative by identical alternatives. Solution method:
Find the economic life of each asset and compare AEU) based on each
asset’s economic life.
2. N0 replacement of current alternative. Solution method:
Industrial & Manufacturing Engineering
Engineering Economics (IE 360)
Revision Exercise 1
Principles of moneytime relationships
1. It is estimated that a certain piece of equipment can save $6,000 per year in
labor and materials costs. The equipment has
Industrial & Manufacturing Engineering
Engineering Economics (IE 360)
Revision Exercise 2
Present Worth Method:
1.
2.
3.
4.
5.
6.
7.
8.
It takes $10,000 to put on the local art festival each year. Immediately before this years festival, the
sponsoring com
ISyE 313 Fall13
Discussion 12
Inflation
Increase in amount of money needed to purchase same amount of goods or services. Inflation results in a
decrease in purchasing power, i.e., one unit of money buys less goods or services
Index: We often use the CPI a
ISyE 313 Fall 13
Discussion 9
Review
Benefit/Cost Analysis
Know how to calculate conventional and modified benefit/cost ratios
Conventional B/C ratio: B/C=
Modified B/C ratio: B/C=
For multiple projects use B/C ratio
Know when a project is desirable:
Be
ISyE 313 Fall13
Discussion 7
Depreciation Methods
1. Straightline depreciation (SLD)
This method charges equal amounts to each year of the recovery period.
Each years depreciation is then (Cost Salvage value)/(Recovery period)
Recovery period is often (n
HW 10 Solutions
14.4
if = 0.20 + 0.05 + (0.20)(0.05)
= 0.26 or 26%
14.8
if per month = 18/12 = 1.5%
Use inflationadjusted interest rate equation to solve for i.
0.015 = i + 0.005 + (i)(0.005)
1.005i = 0.01
i = 0.00995 or 0.995% per month
14.22
(a) At a 5
1st Homework: Due Sep 11
p 9.
1. What is the 2007th digit after the period in the expansion of 1 ?
7
4. Suppose A and B are intervals. Is it always true that A B is an interval? How about A B?
7. (b) Is the number whose decimal expansion after the period
Methodology of the Monthly Index of Services
Interpolation
Interpolation (sometimes referred to as temporal disaggregation) is the process of producing a
time series at a higher frequency than is actually available, for example, a monthly series
from quar