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Problem 1.1 Discuss the importance of alternative identification in the engineering economic process. Problem 1.2 Which of the following would be considered noneconomic factors in deciding which type of power plant to build: (a) equipment cost; (b) morale; (c) goodwill; […]

Problem 10.1 How do you convert inflated dollars into constant-value dollars? Problem 10.2 Find the inflation rate necessary for something to cost exactly twice as much as it did 10 years earlier. Problem 10.3 In an inflationary period for a […]

Problem 11.1 For cost estimation purposes, there are several elements of the first cost component P. List three of them. Problem 11.2 When competition is the dominant factor in pricing a product or service, what is the best cost estimation […]

Problem 12.1 How does depreciation affect income taxes? Problem 12.2 What are three depreciable costs that are included in an asset’s basis? Problem 12.3 What is the difference between book value and market value? Problem 12.4 There are 3 different […]

Problem 13.1 For a corporation that has a taxable income of $250,000 for federal tax computation, determine (a) the marginal tax rate, (b) the total taxes, and (c) the average tax rate. Problem 13.2 In its first year of operation, […]

Problem 14.1 Three alternatives are being evaluated based on six different attributes, all of which are considered of equal importance. Determine the weight to assign to each attribute. Problem 14.2 A consultant asked a corporate president to assign importance values […]

Problem 2.1 Find the correct numerical value for the following factors from the interest tables: a. (F/P,10%,20) b. (A/F,4%,8) c. (P/A,8%,20) d. (A/P,20%,28) e. (F/A,30%,15) Problem 2.2 What is the present worth of $30,000 in year 8 at an interest […]

Problem 3.1 For an interest rate of 2% per quarter, determine the nominal interest rate per (a) semiannual period; (b) year; and (c) 2 years. Problem 3.2 Identify each of the following interest rate statements as either nominal or effective. […]

Problem 4.1 State two conditions under which the do-nothing alternative is not an option. Problem 4.2 When evaluating projects by the present worth method, how do you know which one(s) to select, if the (a) projects are independent, and (b) […]

Problem 5.1 Heyden Motion Solutions ordered $7 million worth of seamless tubes for manufacturing their high performance and precision linear motion products. If their annual operating costs are $860,000 per year, how much annual revenue is required over a 3-year […]

Problem 6.1 In percent, what is (a) the highest, and (b) the lowest rate of return that is possible? Problem 6.2 When interest is charged on the unrecovered balance, if you borrow $10,000 at 10% per year interest and repay […]

Problem 7.1 In conducting a B/C analysis, why is it best to take a limited viewpoint in determining benefits and disbenefits? Problem 7.2 Identify the following as primarily public or private sector projects. a. Bridge across Ohio River b. Coal […]

Problem 8.1 The fixed costs at Harley Motors are $1 million annually. The main product has revenue of $9.90 per unit and $4.50 variable cost. Determine the following: a. Breakeven quantity per year b. Annual profit if 150,000 units are […]

Problem 9.1 Briefly explain what is meant by the defender/challenger concept. Problem 9.2 List three reasons why a replacement study might be needed. Problem 9.3 In conducting a replacement study of assets with different lives, can the annual worth values […]