ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Question
Chapter 15, Problem 27P
To determine
The product that should be funded and the total cost of these products.
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I want you to provide me the Cash Flow diagram of the problem. Only cash flow diagram, the solution is already there. Thanks in advance!
The annual estimated cash flow is $140,000.
The salvage value will be 12% of the initial price after 5 years.
The discount rate (r) is 18%
Let us assume the initial price of the doughnut machine be X.
PV of cash inflows=PV of cash outflows$140,000×PVAF4,18%+.12X×PVF5,18%=X$140,000×2.69006180465+.12X×0.43710921621=X$376,608.652651=X-0.05245310594$376,608.652651=0.94754689406XX=$397,456.479475
The maximum purchase price of the doughnut machine is $397,456.48.
recommend to SLB to increase capacity without any additional equipment or labour!
8. Greg Kopp, Acting Dean of Engineering, is considering competing proposals to establish joint
programs with universities in Australia and Mexico. Students enrolled in each program would pay an
additional fee to participate in these programs.
Australia
$105,000
$60,000
Mexico
$185,000
$71,000
Investment
Net Benefit
3 years
Project Life
2 years
With a hurdle rate (MARR) of 10%, calculate the net present value and external rate of return of the two
investments. As Greg Kopp, which option would you recommend the Faculty of Engineering pursue?
TOTAL
During a a company history of cash flow: Y1, Income $6850: costs $19333, Y2 $6404; costs $14498 Y3 income $17620; costs $2126 with a hurdle rate of 0.15, what is the NPV at year 3?
Please solve clearly ASAP.
Chapter 15 Solutions
ENGR.ECONOMIC ANALYSIS
Ch. 15 - Prob. 1QTCCh. 15 - Prob. 2QTCCh. 15 - Prob. 3QTCCh. 15 - Prob. 4QTCCh. 15 - Prob. 5QTCCh. 15 - Prob. 6QTCCh. 15 - Prob. 1PCh. 15 - Prob. 2PCh. 15 - Prob. 3PCh. 15 - Prob. 4P
Ch. 15 - Prob. 5PCh. 15 - Prob. 6PCh. 15 - Prob. 7PCh. 15 - Prob. 8PCh. 15 - Prob. 9PCh. 15 - Prob. 10PCh. 15 - Prob. 11PCh. 15 - Prob. 12PCh. 15 - Prob. 13PCh. 15 - Prob. 14PCh. 15 - Prob. 15PCh. 15 - Prob. 16PCh. 15 - Prob. 17PCh. 15 - Prob. 18PCh. 15 - Prob. 19PCh. 15 - Prob. 20PCh. 15 - Prob. 21PCh. 15 - Prob. 22PCh. 15 - Prob. 23PCh. 15 - Prob. 24PCh. 15 - Prob. 25PCh. 15 - Prob. 26PCh. 15 - Prob. 27PCh. 15 - Prob. 28PCh. 15 - Prob. 29PCh. 15 - Prob. 30PCh. 15 - Prob. 31P
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