1. List the four essential elements involved in decision making in engineering economic analysis.
2. Identify the following factors as either economic (tangible) or noneconomic (intangible): first cost, leadership, taxes, salvage value, morale, depend-ability, Inflation, profit, acceptance, ethics, Interest rate.
3. Which of the following 1-year investments has the highest rate of return?
(a) $12.500 that yields $1125 in interest
(b) $56.000 that yields $6160 in interest, or
(c) 595.000 that yields $7600 in interest.
4. Construct a cash flow diagram for the following cash flows: $25.030 outflow at time 0. $9000 per year Inflow in years 1 through 5 at an interest rate of 10% per year and an unknown future amount in year 5.
5. Construct a cash flow diagram to find the present worth in year 0 at an interest rate of 15% per year for the following situation.
Year Cash Flow, $
0 - 19.000
1-4 + 8.100
5. Construct a cash flow diagram that represents the amount of money that will be accumulated in 15 years from an investment of $40.000 now at an interest rate of 8% per year.
6. A report by the Government Accountability Office (GAO) shows that the GAO expects the U.S. Postal Service to lose a record $7 billion at the end of this year and if the business model is not changed the losses will total $241 billion by the end of year 10. If the losses increase uniformly over the 10-year period, determine the following:
(a) The expected Increase In losses each year
(b) The loss 5 years from now
(c) The equivalent uniform worth of the losses at an Interest rate of 8% per year
7. To finance a new product line, a company that makes high-temperature ball bearings borrowed $1.8 million at 10% per year interest.
8. If interest is compounded at 20% per year. how long will it take for 550.000 to accumulate to 586.400?
9. A family that won a $100.000 prize on America's Funniest Home Videos decided to put one-half of the money in a college fund for their child who was responsible for the prize. If the fund earned interest at 6% per year. how much was in the ac-count 14 years after it was started?
10. A company that sells high-purity laboratory chemicals is considering Investing in new equipment that will reduce cardboard costs by better matching the size of the products to be shipped to the size of the shipping container. If the new equipment will cost $220.000 to purchase and install. how much must the company save each year for 3 years in order to Justify the investment, if the interest rate is 10% per year?
11. Red Valve Co. of Carnegie. Pennsylvania. makes a control pinch valve that provides accurate, repeatable control of abrasive and corrosive slurries, outlasting gate. plug. ball, and even satellite coated valves. How much can the company afford to spend now on new equipment in lieu of spending $75.000 four years from now? The company's rate of return is 12% per year.
12. Find the numerical value of the following factors using (a) interpolation and (b) the formula.
1. (A/P.13%.15)
2. (P/G 27%.10)
13. Determine the present worth of a geometric gradient series with a cash flow of $50.000 in year I and increases of 6% each year through year 8. The interest rate is 10% per year.
Attachment:- Table.pdf