Basics Of Engineering Economy
Basics Of Engineering Economy
2nd Edition
ISBN: 9780073376356
Author: Leland Blank, Anthony Tarquin
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Chapter 1, Problem 50P
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Hi, what is the answer and how you got it? A recently hired chief executive officer wants to reduce future production costs to improve the company’s earnings, thereby increasing the value of the company’s stock. The plan is to invest $82,000 now and $52,000 in each of the next 4 years to improve productivity. By how much must annual costs decrease in years 5 through 15 to recover the investment plus a return of 12% per year? The annual cost decreases by $?
Because testing of nuclear bombs was halted internationally in 1992, the Department of Energy has developed a laser system that allows engineers to simulate (in a laboratory) conditions in a thermonuclear reaction. Due to soaring cost overruns, a congressional committee undertook an investigation and discovered that the estimated development cost of the project increased at an average rate of 2% per month over a 5-year period. If the original cost was estimated to be $2.3 billion 5 years ago, what is the expected cost today?
Mr. Doe borrowed $1000 from his bank at 8% per year, compounded annually. He can (i) repay the$1000 together with the interest at the end of 3 years, or (ii) pay the interest at the end of each year andrepay the $1000 at the end of 3 years. By how much is (ii) better than (i)?

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Basics Of Engineering Economy

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