Q3aProblem 1 & 2 are only shown since its a continuation to Problem 3. The answers to Problem 1& 2 are given for reference. Only solve Problem 3. Please solve by hand using calculations and formulas (Not in Excel) Problem 1. A company is considering getting involved in electronic commerce. A modest e-commercepackage is available for $20,000. If the company wants to recover the cost in 2 years, what is theequivalent amount of new income that must be realized every 6 months, if the interest rate is 3% perquarter?(Ans. $5,784)Problem 2: The expenses of a venture is shown below. If the interest rate is 14.06% per year compoundedmonthly, find the following:YearCost, SYearCost, S(a) Effective annual interest rate(b) Present worth (at year 0) [Note: you mustconsider the existing gradient] (Ans. $27,303.69)(c) Annual worth (in years 1 to 7) (Ans. $6563)4,0004,0003,0002,00046,0008,00010,00015712,000Problem 3. Two methods are under consideration for producing the case for a portable hazardous materialphotoionization monitor. Aplastic case will require an initial investment of $75,000 and will have anannual operating cost of $27,000 with no salvage after 2 years. An aluminum case will require aninvestment of $125,000 and will have annual costs of $12,000. Some of the equipment can be sold for$30,000 after its 3-year life. At an interest rate of 10% per year, which case should be used on the basisof a present worth analysis?(Ans. PWplastic =$-305,798; PWaluminum= $-231,702)

Given: 1) For Plastic Case Initial Investment =$75000 Annual Operating Cost=$27000 With no Salvage…

Problem 3. Two methods are under consideration for producing the case for a portable hazardous material photoionization monitor. Aplastic case will require an initial investment of $75,000 and will have an annual operating cost of $27,000 with no salvage after 2 years. An aluminum case will require an investment of $125,000 and will have annual costs of $12,000. Some of the equipment can be sold for $30,000 after its 3-year life. At an interest rate of 10% per year, which case should be used on the basis of a present worth analysis? (Ans. PWplastie =S-305,798; PWaluminum= $-231,702)

Problem 3. Two methods are under consideration for producing the case for a portable hazardous material photoionization monitor. Aplastic case will require an initial investment of $75,000 and will have an annual operating cost of $27,000 with no salvage after 2 years. An aluminum case will require an investment of $125,000 and will have annual costs of $12,000. Some of the equipment can be sold for $30,000 after its 3-year life. At an interest rate of 10% per year, which case should be used on the basis of a present worth analysis? (Ans. PWplastie =S-305,798; PWaluminum= $-231,702)

Engineering Fundamentals: An Introduction to Engineering (MindTap Course List)

5th Edition

ISBN:9781305084766

Author:Saeed Moaveni

Publisher:Saeed Moaveni

Chapter20: Engineering Economics

Section: Chapter Questions

Problem 46P

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