,DOWNLOAD THE Test Bank for Engineering Economy 17th Edition Sullivan
m m m m m m m m m
SHORTm ANSWER.m Writem them wordm orm phrasem thatm bestm completesm eachm statementm orm answersm them question.
mAnswermthemquestion.
1) Am $38,000m coilm windingm andm unwindingm machinem ism estimatedm tom providem additionalm valuem tom productionm bym $15m p
er
unit.m Whenm them machinem ism operatedm atm58m unitsm perm hour,m itm needsm tom bem cooledm downm afterm4m hoursm ofm oper
ationm andmreceivem minorm maintenancem form 15m minutes.m Whenm them machinem ism operatedm atm118m unitsm perm hour,m i
tm needsm tom bemcooledm downm afterm 5m hoursm ofm operationm andm receivem minorm maintenancem form 30m minutes.m Them
productionm linem runsm8mhoursm perm day.m Ifm eachm maintenancem checkm costsm$625m andm them machinem hasm am usefulm l
ifem ofm 80,000m hoursm ofmoperations,matmwhatmspeedmshouldmthemmachinemshouldmbemoperated?
Answer:m Atm 58m unitsm perm hour,m netm increasem inm valuem perm daym =m $536
3.83mAtm118m unitsm perm hour,m netm increasem inm valuem perm daym =
m $11,922.81
Selectm them machinem speedm thatm providesm them higherm netm increasem inm valuem perm day machinem speedm B.
2) Youm arem decidingm betweenmthreem typesm ofm waterm heaters.m Them associatedm costsm arem shownm below.m Them annual
m costm ofmoperationm form gasm andm oilm heatersm ism estimatedm bym 365m xm 41045/EFm xm Fuelm Costm perm Btu,m andm them annu
alm costmofmoperationm form electricm waterm heatersm ism estimatedm bym 365m xm 12.03/EFm xm Electricitym Costm perm kWh.m T
hem selectedm heatermwillm bemusedmform onlym onemyearmandmthenm soldmatmthem marketmvalue.m Whichmalternativem sho
uldmbemselected?
Alternative Electric Gas Oil
Pricem ofm waterm heater $28,000 $23,000 $25,000
EF 2.0 0.57 0.75
Fuelm cost $0.1/kWh $0.00001/Btu $0.00001/Btu
Annualm maintenancem costs $3000 $2200 $2500
Marketm value $25,200 $20,700 $22,500
Answer:m Totalm costm ofm electricm heaterm =m $6019.
55mTotalm costmofm gasmheaterm=m$4762.8
3mTotalm costmofm oilm heaterm =m$5199.75
Selectm them heaterm thatm providesm them leastm annualm costs them gasm heater.
3) Am garmentm manufacturingm companym makesm 380,000m articlesm perm year.m Eachm articlem takesm 95m minutesm ofm direct
m labormatm them ratem ofm $9.00mperm hour.m Them overheadm costsm arem $7.50mperm directm laborm hour.m Them averagem price
m ofm them finishedmproductm ism$80m perm article.m Am newm machinem willm reducem them directm laborm hourm bym 15m minutes
m perm article.m Whatm ism themmaximumm amountm them companym shouldm paym form them newm machinem ifm itm wantsm tom br
eakm evenm bym them endm ofm them firstmyear?
Answer:m $1,567,500.00
4) Amlocalmcablemcompanymhasmamfixedmcostmofm $7400m permmonthmandmvariablemcostsmofm$50m permmonthmpermsubsc
riber.m Ifmthem companym chargesm onm averagem $110m perm monthm tom itsm customers,m findm them breakevenm pointm inm ter
msm ofm subscribersmpermmonthmformthemcompany.
Answer:m 123.33m subscribersm perm month
5) Am companym estimatesm itsm annualm expenses,m Y,m inm dollarsm fromm Ym =m 0.235X2m +m 7Xm +m 4m andm annualm revenuem
inm dollarsmfromm0.215X2m+m15X,m wherem Xmismannualmunitsmsold.m Findmthem valuemofm Xmthatmgivesm maximumm pro
1
mynursytest.store
,fit.
Answer:m200m units
2
mynursytest.store
, DOWNLOAD THE Test Bank for Engineering Economy 17th Edition Sullivan
m m m m m m m m m
6) Them annualm fixedm costm form anm inspectingm andm profilingm webm controllerm manufacturingm companym arem $44,000,m
andm themvariablemcostsmarem$38mpermunit.mIfmthemsellingmpricempermunitmismpm=m495m-
m 0.57X,m whatm ism them company's m range m ofm profitable mdemand?
Answer:mThem rangem ofm profitablem demandm ism 112m tom 689m unitsm perm year.
7) Them annualm fixedm costm form am lightm fixturem manufacturingm companym arem $38,000,m andm them variablem costsm are
m $40m permunit.m Ifmthemsellingmprice mpermunitmismpm =m485m-
m1.395X,mwhatmismthemoptimum mdemandmformamlightmfixture?
Answer:m159.50m unitsm perm year
8) Anmaccountingmandm managementmconsultingmfirmmcharge-
outmratemism$112mpermhour.mThem maximummoutputmism214,000m hoursm perm year.m Them fixedm costm ism $610,000m pe
rm yearm andm them variablem costm ism $62m perm standardm servicem hour.mWhatmismthembreakevenmpointminmpercentage m
ofmtotalmcapacity?
Answer:m 5.70%m ofm capacity
9) Am headhunterm companym hasm fixedm costsm ofm $57,000m perm monthm andm variablem costsm ofm $1000m perm customerm a
ccount.mThem companym currentlym chargesm $1150m perm monthm form eachm accountm andm hasm38,000m accounts.m Itm wa
ntsm tom raisem themmonthlym feem tom$1160.55m tom coverm enhancedm featuresm suchm asm am newm webm interfacem andm am n
ewlym acquiredm database,mwhichmincreasesm themvariablemcostmbym9m percent.m Whatm ismthem newm breakevenm point
m inm numberm ofm accounts?
Answer:m 807.94m accounts
10) Them costm form operatingm am commercialm truckm ism knv1/2,m wherem km ism am constantm ofm proportionally,m vm ism velocity
m inm milesmperm hours,m andm nm ism them tripm lengthm inm miles.m Itm ism estimatedm thatm atm 85m mph,m them averagem costm ofm
operationm ism $52m permmile.m Them truckm ownerm wantsm tom minimizem them costm ofm operation,m whichm needsm tom balan
cem againstm them costm ofm delaysmandm unscheduledm maintenance,m whichm ism assumedm tom bem$10m perm hour.m Whatm is
m them optimumm velocitym neededm tomminimizemthemtotalmcosts?
Answer:m Them truckm shouldm bem operatedm atm anm averagem velocitym ofm 2.33m mphm tom minimizem them totalm costm ofm op
erationmandmdelays.
11) Ammanufacturingmcompanymleasesmammachinemform$31,000mpermyear.mEachmunitmproducedmcostsm$36minmlabormandm
$65minmmaterials.mTombreakmeven,m21,000m unitsmmustmbemsold.m Whatmismthempricemofmthemproduct?
Answer:m $102.48
12) Am manufacturingmplantmismplanningmtomreplacemoutdatedmequipmentm withm moremenergy-
efficientmandmenvironmental-
friendlym equipment.m Twom modelsm arem underm consideration.m Modelm Am ism soldm form $159,000m andm can
producem atm anm optimumm speedm ofm78m unit/hour.m Modelm Bm ism soldm form them samem price,m butm canm producem atm anm
optimummspeedm ofm76m unit/hour.m Modelm Am requiresm 6m hoursm ofm maintenancem form everym 4300munitsm produced,m
whilem Modelm Bmrequiresm5mhoursmofmmaintenancemformeverym3300munits.mThemmaintenancemcostmformbothmmodelsm
ism$100mpermhour.mThemvariablem operatingm costm ism $340mperm hourm form Modelm Am andm $290m perm hourm form Modelm B
.m Duem tom obsoletem parts,m therem ismam sunkmcostmofm$2700m form modelm Amandm $1900m form Modelm Bm.m Ifmthempricemofm t
hemproductmism$150mperm unitmandm themcompanymexpectsmtomsellm145,000m unitsmeachmyear,mwhichmmodelmshouldmb
emselected?
Answer:mModelmA:m$652,284mperm145,000munitsm
Modelm B:m $575,259m perm 145,000m units
Selectm them designm thatm minimizesm them totalm costm form 145,000m units/year Modelm B.
3
mynursytest.store
m m m m m m m m m
SHORTm ANSWER.m Writem them wordm orm phrasem thatm bestm completesm eachm statementm orm answersm them question.
mAnswermthemquestion.
1) Am $38,000m coilm windingm andm unwindingm machinem ism estimatedm tom providem additionalm valuem tom productionm bym $15m p
er
unit.m Whenm them machinem ism operatedm atm58m unitsm perm hour,m itm needsm tom bem cooledm downm afterm4m hoursm ofm oper
ationm andmreceivem minorm maintenancem form 15m minutes.m Whenm them machinem ism operatedm atm118m unitsm perm hour,m i
tm needsm tom bemcooledm downm afterm 5m hoursm ofm operationm andm receivem minorm maintenancem form 30m minutes.m Them
productionm linem runsm8mhoursm perm day.m Ifm eachm maintenancem checkm costsm$625m andm them machinem hasm am usefulm l
ifem ofm 80,000m hoursm ofmoperations,matmwhatmspeedmshouldmthemmachinemshouldmbemoperated?
Answer:m Atm 58m unitsm perm hour,m netm increasem inm valuem perm daym =m $536
3.83mAtm118m unitsm perm hour,m netm increasem inm valuem perm daym =
m $11,922.81
Selectm them machinem speedm thatm providesm them higherm netm increasem inm valuem perm day machinem speedm B.
2) Youm arem decidingm betweenmthreem typesm ofm waterm heaters.m Them associatedm costsm arem shownm below.m Them annual
m costm ofmoperationm form gasm andm oilm heatersm ism estimatedm bym 365m xm 41045/EFm xm Fuelm Costm perm Btu,m andm them annu
alm costmofmoperationm form electricm waterm heatersm ism estimatedm bym 365m xm 12.03/EFm xm Electricitym Costm perm kWh.m T
hem selectedm heatermwillm bemusedmform onlym onemyearmandmthenm soldmatmthem marketmvalue.m Whichmalternativem sho
uldmbemselected?
Alternative Electric Gas Oil
Pricem ofm waterm heater $28,000 $23,000 $25,000
EF 2.0 0.57 0.75
Fuelm cost $0.1/kWh $0.00001/Btu $0.00001/Btu
Annualm maintenancem costs $3000 $2200 $2500
Marketm value $25,200 $20,700 $22,500
Answer:m Totalm costm ofm electricm heaterm =m $6019.
55mTotalm costmofm gasmheaterm=m$4762.8
3mTotalm costmofm oilm heaterm =m$5199.75
Selectm them heaterm thatm providesm them leastm annualm costs them gasm heater.
3) Am garmentm manufacturingm companym makesm 380,000m articlesm perm year.m Eachm articlem takesm 95m minutesm ofm direct
m labormatm them ratem ofm $9.00mperm hour.m Them overheadm costsm arem $7.50mperm directm laborm hour.m Them averagem price
m ofm them finishedmproductm ism$80m perm article.m Am newm machinem willm reducem them directm laborm hourm bym 15m minutes
m perm article.m Whatm ism themmaximumm amountm them companym shouldm paym form them newm machinem ifm itm wantsm tom br
eakm evenm bym them endm ofm them firstmyear?
Answer:m $1,567,500.00
4) Amlocalmcablemcompanymhasmamfixedmcostmofm $7400m permmonthmandmvariablemcostsmofm$50m permmonthmpermsubsc
riber.m Ifmthem companym chargesm onm averagem $110m perm monthm tom itsm customers,m findm them breakevenm pointm inm ter
msm ofm subscribersmpermmonthmformthemcompany.
Answer:m 123.33m subscribersm perm month
5) Am companym estimatesm itsm annualm expenses,m Y,m inm dollarsm fromm Ym =m 0.235X2m +m 7Xm +m 4m andm annualm revenuem
inm dollarsmfromm0.215X2m+m15X,m wherem Xmismannualmunitsmsold.m Findmthem valuemofm Xmthatmgivesm maximumm pro
1
mynursytest.store
,fit.
Answer:m200m units
2
mynursytest.store
, DOWNLOAD THE Test Bank for Engineering Economy 17th Edition Sullivan
m m m m m m m m m
6) Them annualm fixedm costm form anm inspectingm andm profilingm webm controllerm manufacturingm companym arem $44,000,m
andm themvariablemcostsmarem$38mpermunit.mIfmthemsellingmpricempermunitmismpm=m495m-
m 0.57X,m whatm ism them company's m range m ofm profitable mdemand?
Answer:mThem rangem ofm profitablem demandm ism 112m tom 689m unitsm perm year.
7) Them annualm fixedm costm form am lightm fixturem manufacturingm companym arem $38,000,m andm them variablem costsm are
m $40m permunit.m Ifmthemsellingmprice mpermunitmismpm =m485m-
m1.395X,mwhatmismthemoptimum mdemandmformamlightmfixture?
Answer:m159.50m unitsm perm year
8) Anmaccountingmandm managementmconsultingmfirmmcharge-
outmratemism$112mpermhour.mThem maximummoutputmism214,000m hoursm perm year.m Them fixedm costm ism $610,000m pe
rm yearm andm them variablem costm ism $62m perm standardm servicem hour.mWhatmismthembreakevenmpointminmpercentage m
ofmtotalmcapacity?
Answer:m 5.70%m ofm capacity
9) Am headhunterm companym hasm fixedm costsm ofm $57,000m perm monthm andm variablem costsm ofm $1000m perm customerm a
ccount.mThem companym currentlym chargesm $1150m perm monthm form eachm accountm andm hasm38,000m accounts.m Itm wa
ntsm tom raisem themmonthlym feem tom$1160.55m tom coverm enhancedm featuresm suchm asm am newm webm interfacem andm am n
ewlym acquiredm database,mwhichmincreasesm themvariablemcostmbym9m percent.m Whatm ismthem newm breakevenm point
m inm numberm ofm accounts?
Answer:m 807.94m accounts
10) Them costm form operatingm am commercialm truckm ism knv1/2,m wherem km ism am constantm ofm proportionally,m vm ism velocity
m inm milesmperm hours,m andm nm ism them tripm lengthm inm miles.m Itm ism estimatedm thatm atm 85m mph,m them averagem costm ofm
operationm ism $52m permmile.m Them truckm ownerm wantsm tom minimizem them costm ofm operation,m whichm needsm tom balan
cem againstm them costm ofm delaysmandm unscheduledm maintenance,m whichm ism assumedm tom bem$10m perm hour.m Whatm is
m them optimumm velocitym neededm tomminimizemthemtotalmcosts?
Answer:m Them truckm shouldm bem operatedm atm anm averagem velocitym ofm 2.33m mphm tom minimizem them totalm costm ofm op
erationmandmdelays.
11) Ammanufacturingmcompanymleasesmammachinemform$31,000mpermyear.mEachmunitmproducedmcostsm$36minmlabormandm
$65minmmaterials.mTombreakmeven,m21,000m unitsmmustmbemsold.m Whatmismthempricemofmthemproduct?
Answer:m $102.48
12) Am manufacturingmplantmismplanningmtomreplacemoutdatedmequipmentm withm moremenergy-
efficientmandmenvironmental-
friendlym equipment.m Twom modelsm arem underm consideration.m Modelm Am ism soldm form $159,000m andm can
producem atm anm optimumm speedm ofm78m unit/hour.m Modelm Bm ism soldm form them samem price,m butm canm producem atm anm
optimummspeedm ofm76m unit/hour.m Modelm Am requiresm 6m hoursm ofm maintenancem form everym 4300munitsm produced,m
whilem Modelm Bmrequiresm5mhoursmofmmaintenancemformeverym3300munits.mThemmaintenancemcostmformbothmmodelsm
ism$100mpermhour.mThemvariablem operatingm costm ism $340mperm hourm form Modelm Am andm $290m perm hourm form Modelm B
.m Duem tom obsoletem parts,m therem ismam sunkmcostmofm$2700m form modelm Amandm $1900m form Modelm Bm.m Ifmthempricemofm t
hemproductmism$150mperm unitmandm themcompanymexpectsmtomsellm145,000m unitsmeachmyear,mwhichmmodelmshouldmb
emselected?
Answer:mModelmA:m$652,284mperm145,000munitsm
Modelm B:m $575,259m perm 145,000m units
Selectm them designm thatm minimizesm them totalm costm form 145,000m units/year Modelm B.
3
mynursytest.store
