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978-0073376301 Chapter 1
Solutions to end–of–chapter problems Engineering Economy, 7th edition Leland Blank and Anthony Tarquin Chapter 1 Foundations of Engineering Economy 1.1 The four elements are cash flows, time of occurrence of cash flows, interest rates, and measure of economic worth. 1.2 […]
978-0073376301 Chapter 10
1 Solutions to end–of–chapter problems Engineering Economy, 7th edition Leland Blank and Anthony Tarquin Chapter 10 Project Financing and Non–economic Attributes 10.1 Risk – The higher the risk, the higher the MARR Investment Opportunity – MARR may be lowered for […]
978-0073376301 Chapter 11
1 Solutions to end–of–chapter problems Engineering Economy, 7th edition Leland Blank and Anthony Tarquin Chapter 11 Replacement and Retention Decisions 11.1 In taking a non-owner’s viewpoint, the analysis is done from the perspective of someone who does not own any […]
978-0073376301 Chapter 12
1 Solutions to end–of–chapter problems Engineering Economy, 7th edition Leland Blank and Anthony Tarquin Chapter 12 Independent Projects With Budget Limitation 12.1 Bundle: a collection of independent projects 12.2 Two assumptions are: (1) The funds invested in every project will […]
978-0073376301 Chapter 13
1 Solutions to end–of–chapter problems Engineering Economy, 7th edition Leland Blank and Anthony Tarquin Chapter 13 Breakeven and Payback Analysis 13.1 (a) 0 = -FC + (589 – 340)9000 13.2 (a) QBE = 800,000/(2950 – 2075) = 914 units per […]
978-0073376301 Chapter 14
1 Solutions to end–of–chapter problems Engineering Economy, 7th edition Leland Blank and Anthony Tarquin Chapter 14 Effects of Inflation 14.1 (a) There is no difference. (b) Today’s dollars are inflated compared to dollars of 2 years ago. Therefore, in order […]
978-0073376301 Chapter 15
Solutions to end–of–chapter problems Engineering Economy, 7th edition Leland Blank and Anthony Tarquin Chapter 15 Cost Estimation 15.1 Ranking most time to least time: detailed estimate, design 60-100% complete, partially designed, order of magnitude, scoping/feasibility. 15.2 Supplies: AOC Installation: FC […]
978-0073376301 Chapter 16 Part 1
1 Solutions to end–of–chapter problems Engineering Economy, 7th edition Leland Blank and Anthony Tarquin Chapter 16 Depreciation Methods 16.1 Depreciation increases the company’s after–tax cash flow, because depreciation reduces the 16.2 Book value is established on the basis of accepted […]
978-0073376301 Chapter 16 Part 2
12 Spreadsheet solution (b) MACRS: sum d values for 3 years: 0.20 + 0.32 + 0.192 = 0.712 (71.2%) SL: sum the d values for 3 years: 0.05 + 0.1 + 0.1 = 0.25 (25%) SL depreciates much slower early […]
978-0073376301 Chapter 17 Part 1
1 Solutions to end–of–chapter problems Engineering Economy, 7th edition Leland Blank and Anthony Tarquin Chapter 17 After-Tax Economic Analysis 17.1 (a) Graduated rates: higher taxable incomes pay taxes at higher rates. 17.2 (a) Taxes = 22,250 + 0.39(150,000 – 100,000) […]
978-0073376301 Chapter 17 Part 2
17 PWB = –22,000 + 1450(P/F,7%,1) + … + 2500(P/F,7%,10) 17.47 Alternative A Year P & S GI – OE D TI Taxes CFAT 0 -8000 – – – – -8000 1 3500 2666 834 333 3167 2 3500 3556 […]
978-0073376301 Chapter 18 Part 1
1 Solutions to end–of–chapter problems Engineering Economy, 7th edition Leland Blank and Anthony Tarquin Chapter 18 Sensitivity Analysis and Staged Decisions 18.1 $135,000: PW = -500,000 + 135,000(P/A,15%,5) 18.2 Start family now: FW = 50,000(F/A,10%, 5)(F/P,10%,20) + 15,000(F/A,10%,20) = 50,000(6.1051)(6.7275) […]
978-0073376301 Chapter 18 Part 2
14 AW2.25 = –225,000(A/P,6%,10) + (–50,000)(0.1) AW2.5 = –300,000(A/P,6%,10) + (–50,000)(0.05) = –350,000(0.13587) –50,000(0.05) = $–43,261 AW3.0 = –400,000(A/P,6%,10) + (–50,000)(0.01) = –400,000(0.13587) –50,000(0.01) = $–54,848 AW3.25 = –450,000(A/P,6%,10) + (–50,000)(0.005) = –450,000(0.13587) –50,000(0.005) = $–61,392 Build a wall to […]
978-0073376301 Chapter 19
Solutions to end–of–chapter problems Engineering Economy, 7th edition Leland Blank and Anthony Tarquin Chapter 19 More on Variation and Decision Making Under Risk 19.1 (a) Continuous (b) Discrete (c) Discrete (d) Continuous (e) Continuous 19.2 (a) Discrete and Certainty (b) […]
978-0073376301 Chapter 2
Solutions to end–of–chapter problems Engineering Economy, 7th edition Leland Blank and Anthony Tarquin Chapter 2 Factors: How Time and Interest Affect Money 2.1 (1) (P/F, 6%, 8) = 0.6274 (2) (A/P, 10%,10) = 0.16275 (3) (A/G,15%,20) = 5.3651 (4) (A/F,2%,30) […]
978-0073376301 Chapter 3
1 Solutions to end–of–chapter problems Engineering Economy, 7th edition Leland Blank and Anthony Tarquin Chapter 3 Combining Factors and Spreadsheet Functions 3.2 P = 260,000(P/A,10%,3) + 190,000(P/A,10%,2)(P/F,10%,3) = 260,000(2.4869) + 190,000(1.7355)(0.7513) = $894,331 3.3 (a) P = -120(P/F,12%,1) – 100(P/F,12%,2) […]
978-0073376301 Chapter 4
1 Solutions to end–of–chapter problems Engineering Economy, 7th edition Leland Blank and Anthony Tarquin Chapter 4 Nominal and Effective Interest Rates 4.3 (a) six times (b) six times (c) two times 4.4 (a) one time (b) six times (c) 18 […]
978-0073376301 Chapter 5
1 Solutions to end–of–chapter problems Engineering Economy, 7th edition Leland Blank and Anthony Tarquin Chapter 5 Present Worth Analysis 5.1 Mutually exclusive alternatives accomplish the same thing. Therefore, only one is to be 5.2 (a) The do-nothing alternative means that […]
978-0073376301 Chapter 6
Solutions to end–of–chapter problems Engineering Economy, 7th edition Leland Blank and Anthony Tarquin Chapter 6 Annual Worth Analysis 6.1 Multiply by (A/P,i%,n), where n is equal to the LCM or stated study period. 6.2 Three assumptions in the AW method […]
978-0073376301 Chapter 7
1 Solutions to end–of–chapter problems Engineering Economy, 7th edition Leland Blank and Anthony Tarquin Chapter 7 Rate of Return Analysis: One Project 7.1 (a) The return would be -100%, if the entire initial investment were lost with no return. 7.2 […]
978-0073376301 Chapter 8
1 Solutions to end–of–chapter problems Engineering Economy, 7th edition Leland Blank and Anthony Tarquin Chapter 8 Rate of Return Analysis: Multiple Alternatives 8.1 The rate of return on the incremental cash flow column represents the rate of return on the […]
978-0073376301 Chapter 9 Part 1
1 Solutions to end–of–chapter problems Engineering Economy, 7th edition Leland Blank and Anthony Tarquin Chapter 9 Benefit/Cost Analysis and Public Sector Economics 9.1 Disbenefits are negative consequences that occur to the public and, therefore, are included 9.2 eBay – private; […]
978-0073376301 Chapter 9 Part 2
12 (b) Location E B = 500,000 – 30,000 – 50,000 = $420,000 C = 3,000,000 (0.12) = $360,000 Modified B/C = 420,000/360,000 = 1.17 Location E is justified. Incrementally compare W to E. W vs. E: ΔB = $200,000 […]