CHAPTER 14 PROBLEMS
14-1
Dene ination in terms of the purchasing power of dollars.
Solution:
During times of inflation, the purchasing power of a monetary unit is reduced. In this
way the currency its
Identifying Cash Inflows and Outflows
5.1 Camptown Togs, Togs, a childrens clothing manufacture, has always found payroll
processing to be costly, because it must be done by a clerk so that the number
CHAPTER 8 PROBLEMS
Unless otherwise noted, all problems for Chapter 8 should be solved by rate of return
analysis.
8-1
A firm is considering moving its manufacturing plant from Red Deer to a new
locat
CHAPTER 5 PROBLEMS
5.34-5.46 Trust Funds
5.47-5.73 ME Alternatives
5.74-5.84ExcelExamoles NO
5-1
Compute P for the following diagram.
Solution:
P = $50 (P/A, 10%, 4) + $50 (P/G, 10%, 4)
= $50 (3.170)
Park Chapter 3
Market Interest Rates (Nominal versus Effective Interest Rates)
3.1 A loan company offers money at 1.5% per month compounded monthly.
(a) What is the nominal interest rate?
(b) What is
Park Fundamentals of EE
Chapter 2 Time Value of Money
Methods of Calculating Interest 2.1-2.5
The Concept of Equivalence 2.6-2.8
Single Payments (Use of F/P or P/F Factors) 2.9 -2.15
Uneven-Payment Se
CHAPTER 6 PROBLEMS
6-1
Using a 10% interest rate, compute the value of C for the following diagram.
Solution:
C = $15 + $15 (A/G, 10%, 4)
= $15 + $15 (1.381) = $35.72
6-2
Compute the value of B for th
Note: The symbol i* represents the interest rate that makes the present worth of the
project equal to zero. The symbol IRR represents the internal rate of return of the
investment. For a simple invest
Example 6.13: Pumping System With a Problem
Valve
Cost Comparison for Options A Through D
Contemporary Engineering Economics
Third Canadian Edition, 2012
Sample LCC Calculation for Option A
All costs
Park 5-27
A/F,5,15
i
(1+i)^15-1
2/3
0.0500000000
1.0789281794
0.0463422876
926,845.75
5,000,000
2,000,000
100,000
7,926,845.75
5,000,000
2,000,000
Up front payment
Left in bank to earn 100,000
926,845
CHAPTER 3 - PROBLEMS
3-1
In your own words explain the time value of money. From your own life (either now or in
a situation that might occur in the future), provide an example in which the time value
CHAPTER 16 PROBLEMS
16-1 Economic analysis and decision making in the public sector is often called a
multi-actor or multi-stakeholder decision problem. Explain what this phrase means.
Solution:
Publi
Note: In these problems, the term market interest rate represents the inflationadjusted interest rate for equivalence calculations or the APR (annual percentage
rate) quoted by a financial institution
Valuation of Benefits and Costs
12.1 The state of Michigan is considering a bill that would ban the use of road salt on
highways and bridges during icy conditions. Road salt is known to be toxic, cost