INSTRUCTOR’S SOLUTIONS MANUAL
#my #my
Contemporary Engineering Economics
#my #my
SEVENTH
EDITION PARK
#my #my
SCHOLARVAULT
,The #myauthor #myand #mypublisher #myof #mythis #mybook #myhave #myused #mytheir #mybest #myefforts #myin
#mypreparing #mythis #mybook. #myThese #myefforts #myinclude #mythe #mydevelopment, #myresearch, #myand
#mytesting #myof #mythe #mytheories #myand #myprograms #myto #mydetermine #mytheir #myeffectiveness.
#myThe #myauthor #myand #mypublisher #mymake #myno #mywarranty #myof #myany #mykind, #myexpressed #myor
#myimplied, #mywith #myregard #myto #mythese #myprograms #myor #mythe #mydocumentation #mycontained
#myin # m y this #mybook. #myThe #myauthor #myand #mypublisher #myshall #mynot #mybe #myliable #myin #myany
#myevent #myfor #myincidental #myor #myconsequential #mydamages #myin #myconnection #mywith, #myor
#myarising #myout #myof, #mythe #myfurnishing, #myperformance, #myor #myuse #myof #mythese #myprograms.
Reproduced #myby #myPearson #myfrom #myelectronic #myfiles #mysupplied #myby #mythe #myauthor.
Copyright #my© #my2023, #my2022, #my2014, #my2008 #myby #myPearson #myEducation, #myInc. #my221
#myRiver #myStreet, #myHoboken, #myNJ #my07030. #myAll #myrights #myreserved.
All #myrights #myreserved. #myNo #mypart #myof #mythis #mypublication #mymay #mybe #myreproduced,
#mystored #myin #mya #myretrieval #mysystem, #myor #mytransmitted, #myin #myany #myform #myor #myby #myany
#mymeans, #myelectronic, #mymechanical, #myphotocopying, #myrecording, #myor #myotherwise,
#mywithout #mythe #myprior #mywritten #mypermission #myof #mythe #mypublisher. #myPrinted #myin #mythe
#myUnited #myStates #myof #myAmerica.
ISBN-13: # m y 978-0-13-763287-9
ISBN-10: 0-13-763287-8
SCHOLARVAULT
,Contemporary #myEngineering #myEconomics, #my7th #myed.
#my©2023
Chapter 1 Engineering Economic Decisions
1.1
Lease
o Deposit (typically one month worth of deposit) refundable when lease
expires.
o Monthly lease payment
o Monthly maintenance fees
o Monthly utility expenses
Buy
o Closing fees
o Down payment
o Monthly mortgage payments
o Property taxes
o Monthly utility fees
o Monthly maintenance fees
o Repair expenses
o Homeowners’ association fee (if applicable)
1.2
Option 1:
o Total amount at the end of two years: $1,150
Option 2:
o Loan $500 to a friend for one year and receive $600
o Deposit $500 (left over) in a back at 3% for two years:
$500(1.03)(1.03) = $530.45
o Deposit $600 received from your friend at 3% per year for a year:
$600(1.03) = $618
Total amount at the end of two years:
$530.45 + $618 = $1,148.45
These two options are about the same. But considering the trustworthiness, you
could go with Option 2.
1
Copyright #my© #my2023 #myPearson #myEducation, #myInc.
SCHOLARVAULT
, Contemporary #myEngineering #myEconomics, #my7th #myed.
#my©2023
Chapter 2 Accounting Information for Engineering
#my #my #my #my #my
Economic Decisions
#my #my
2.1
(2) #myIncome #mystatement; #my(1) #mybalance #mysheet; #my(3) #mycash #myflow #mystatement;
#my(4) #myoperating #myactivities; #my(5) #myinvesting #myactivities, #myand #my(6) #myfinancing
#myactivities; #my(7) #mycapital #myaccount #my(paid-in #mycapital)
2.2
(7), #my(8), #my(1), #my(11), #my(3), #my(9)
2.3
(a)
Current #myassets #my= #my$150,000 #my+ #my$200,000 #my+ #my$150,000 #my+ #my$50,000 #my+ #my$30,000
= #my$580,000
Current #myliabilities #my= #my$50,000 #my+ #my$100,000 #my+ #my$80,000 #my= #my$230,000
Working #mycapital #my= #my$580,000 #my- #my$230,000 #my= #my$350,000
Shareholder’s #myequity #my= #my$100,000 #my+ #my$150,000 #my+ #my$150,000 #my+ #my$70,000
= #my$470,000
(b) EPS #my= #my$500,000/10,000 #my= #my$50 #myper #myshare
(c) Par #myvalue #my= #my$15; #mycapital #mysurplus #my=
#my $150,000/10,000 #my= #my$15 #myMarket #myprice #my= #my$15
#my + #my$15 #my= #my$30 #myper #myshare
2.4
(a) Shareholder’s #myequity #myin #my2021 #my= #my$700 #my- #my$510
#my= #my$190(M) #myShareholder’s #myequity #myin #my2022 #my=
#my$900 #my- #my$640 #my= #my$260(M)
(b) Net #myworking #mycapital #myin #my2021 #my= #my$100 #my-
#my$60 #my= #my$40(M) #myNet #myworking #mycapital #myin
#my2022 #my= #my$200 #my- #my$90 #my= #my$110(M)
(c) The #myincome #mytaxes #myin #myyear #my2022:
($2,350 #my- #my$1,130-$420-$210) #my*0.35 #my= #my$206.5(M)
(d) $383.50 #my+ #my$420=$803.50 #my(M)
1
Copyright #my© #my2023 #myPearson
#myEducation, #myInc.
SCHOLARVAULT
#my #my
Contemporary Engineering Economics
#my #my
SEVENTH
EDITION PARK
#my #my
SCHOLARVAULT
,The #myauthor #myand #mypublisher #myof #mythis #mybook #myhave #myused #mytheir #mybest #myefforts #myin
#mypreparing #mythis #mybook. #myThese #myefforts #myinclude #mythe #mydevelopment, #myresearch, #myand
#mytesting #myof #mythe #mytheories #myand #myprograms #myto #mydetermine #mytheir #myeffectiveness.
#myThe #myauthor #myand #mypublisher #mymake #myno #mywarranty #myof #myany #mykind, #myexpressed #myor
#myimplied, #mywith #myregard #myto #mythese #myprograms #myor #mythe #mydocumentation #mycontained
#myin # m y this #mybook. #myThe #myauthor #myand #mypublisher #myshall #mynot #mybe #myliable #myin #myany
#myevent #myfor #myincidental #myor #myconsequential #mydamages #myin #myconnection #mywith, #myor
#myarising #myout #myof, #mythe #myfurnishing, #myperformance, #myor #myuse #myof #mythese #myprograms.
Reproduced #myby #myPearson #myfrom #myelectronic #myfiles #mysupplied #myby #mythe #myauthor.
Copyright #my© #my2023, #my2022, #my2014, #my2008 #myby #myPearson #myEducation, #myInc. #my221
#myRiver #myStreet, #myHoboken, #myNJ #my07030. #myAll #myrights #myreserved.
All #myrights #myreserved. #myNo #mypart #myof #mythis #mypublication #mymay #mybe #myreproduced,
#mystored #myin #mya #myretrieval #mysystem, #myor #mytransmitted, #myin #myany #myform #myor #myby #myany
#mymeans, #myelectronic, #mymechanical, #myphotocopying, #myrecording, #myor #myotherwise,
#mywithout #mythe #myprior #mywritten #mypermission #myof #mythe #mypublisher. #myPrinted #myin #mythe
#myUnited #myStates #myof #myAmerica.
ISBN-13: # m y 978-0-13-763287-9
ISBN-10: 0-13-763287-8
SCHOLARVAULT
,Contemporary #myEngineering #myEconomics, #my7th #myed.
#my©2023
Chapter 1 Engineering Economic Decisions
1.1
Lease
o Deposit (typically one month worth of deposit) refundable when lease
expires.
o Monthly lease payment
o Monthly maintenance fees
o Monthly utility expenses
Buy
o Closing fees
o Down payment
o Monthly mortgage payments
o Property taxes
o Monthly utility fees
o Monthly maintenance fees
o Repair expenses
o Homeowners’ association fee (if applicable)
1.2
Option 1:
o Total amount at the end of two years: $1,150
Option 2:
o Loan $500 to a friend for one year and receive $600
o Deposit $500 (left over) in a back at 3% for two years:
$500(1.03)(1.03) = $530.45
o Deposit $600 received from your friend at 3% per year for a year:
$600(1.03) = $618
Total amount at the end of two years:
$530.45 + $618 = $1,148.45
These two options are about the same. But considering the trustworthiness, you
could go with Option 2.
1
Copyright #my© #my2023 #myPearson #myEducation, #myInc.
SCHOLARVAULT
, Contemporary #myEngineering #myEconomics, #my7th #myed.
#my©2023
Chapter 2 Accounting Information for Engineering
#my #my #my #my #my
Economic Decisions
#my #my
2.1
(2) #myIncome #mystatement; #my(1) #mybalance #mysheet; #my(3) #mycash #myflow #mystatement;
#my(4) #myoperating #myactivities; #my(5) #myinvesting #myactivities, #myand #my(6) #myfinancing
#myactivities; #my(7) #mycapital #myaccount #my(paid-in #mycapital)
2.2
(7), #my(8), #my(1), #my(11), #my(3), #my(9)
2.3
(a)
Current #myassets #my= #my$150,000 #my+ #my$200,000 #my+ #my$150,000 #my+ #my$50,000 #my+ #my$30,000
= #my$580,000
Current #myliabilities #my= #my$50,000 #my+ #my$100,000 #my+ #my$80,000 #my= #my$230,000
Working #mycapital #my= #my$580,000 #my- #my$230,000 #my= #my$350,000
Shareholder’s #myequity #my= #my$100,000 #my+ #my$150,000 #my+ #my$150,000 #my+ #my$70,000
= #my$470,000
(b) EPS #my= #my$500,000/10,000 #my= #my$50 #myper #myshare
(c) Par #myvalue #my= #my$15; #mycapital #mysurplus #my=
#my $150,000/10,000 #my= #my$15 #myMarket #myprice #my= #my$15
#my + #my$15 #my= #my$30 #myper #myshare
2.4
(a) Shareholder’s #myequity #myin #my2021 #my= #my$700 #my- #my$510
#my= #my$190(M) #myShareholder’s #myequity #myin #my2022 #my=
#my$900 #my- #my$640 #my= #my$260(M)
(b) Net #myworking #mycapital #myin #my2021 #my= #my$100 #my-
#my$60 #my= #my$40(M) #myNet #myworking #mycapital #myin
#my2022 #my= #my$200 #my- #my$90 #my= #my$110(M)
(c) The #myincome #mytaxes #myin #myyear #my2022:
($2,350 #my- #my$1,130-$420-$210) #my*0.35 #my= #my$206.5(M)
(d) $383.50 #my+ #my$420=$803.50 #my(M)
1
Copyright #my© #my2023 #myPearson
#myEducation, #myInc.
SCHOLARVAULT
