Questions from Engineering

Q: State why payback analysis should be used only as a supplemental analysis

State why payback analysis should be used only as a supplemental analysis tool when an economic study is performed.

Q: (a) How long would it take to recover an investment

(a) How long would it take to recover an investment of $245,000 in enhanced CNC controls that include axis control to eight axes on the milling model, if the associated income is $92,000 per year, exp...

Q: For years, Jake has practiced the “buy now, pay

For years, Jake has practiced the “buy now, pay later” philosophy of money management. For example, he purchased a car 3 years ago with a 6-year (72 month) loan at 7% per year interest. He has refinan...

Q: Find the present worth of earthmoving equipment that has a first cost

Find the present worth of earthmoving equipment that has a first cost today of $150,000, an annual operating cost of $60,000, and a salvage value of 20% of the first cost after 5 years; these estimate...

Q: Some of the following future cash flows have been expressed in then

Some of the following future cash flows have been expressed in then-current (future) dollars and others in CV dollars. Use an interest rate of 10% per year and an inflation rate of 6% per year. (a) Fi...

Q: The company you work for is considering a new product line projected

The company you work for is considering a new product line projected to have the net cash flows (NCF) shown. The values are in future dollars, which have been inflated by 5% per year. Because the plan...

Q: A regional infrastructure building and maintenance contractor must decide to buy a

A regional infrastructure building and maintenance contractor must decide to buy a new compact horizontal directional drilling (HDD) machine now, or wait and buy it 2 years from now when a large pipel...

Q: Joan, the project manager, asks you to evaluate alternatives A

Joan, the project manager, asks you to evaluate alternatives A and B on the basis of their PW values using a real interest rate of 10% per year and an inflation rate of 3% per year (a) without any adj...

Q: (a) Calculate the perpetual equivalent annual worth in future dollars

(a) Calculate the perpetual equivalent annual worth in future dollars for years 1 through ∞ for income of $50,000 now and $5000 per year thereafter. Assume the market interest rate is 8% per year and...

Q: Using a spreadsheet, (a) work Problem 12.

Using a spreadsheet, (a) work Problem 12.19 as stated, and (b) expand the bundles to allow up to three projects and no more than $25,000 invested. Data from problem 12.19: