SOLUTIONS MANUAL
Engineering Economy, 9th Edi on
By Blank, Leland
N
U
R
SE
D
O
C
S
,TABLE OF CONTENT
1) Foundations of Engineering Economy
2) Factors: How Time and Interest Affect Money
3) Combining Factors and Spreadsheet Functions
4) Nominal and Effective Interest Rates
Learning Stage 2 - Basic Analysis Tools
5) Analysis Using Present Worth and Future Worth Values
6) Annual Worth Analysis
7) Rate of Return Analysis: One Project
N
8) Rate of Return Analysis: Multiple Alternatives
9) Benefit/Cost Analysis and Public Sector Economics
U
Learning Stage 2 - Epilogue: Selecting the Basic Analysis Tool
Learning Stage 3 - Making Decisions
R
10) Project Financing and Noneconomic Attributes
11) Replacement and Retention Decisions
SE
12) Independent Projects with Budget Limitation
13) Breakeven and Payback Analysis
Learning Stage 4 - Rounding Out the Study
14) Effects of Inflation
D
15) Cost Estimation and Indirect Cost Allocation
16) Depreciation and Depletion Methods
O
17) After-Tax Economic Analysis
18) Sensitivity Analysis and Staged Decisions
19) Decision Making under Risk
C
S
, Solutions to end-of-chapter problems
Engineering Economy, 9th edition
Leland Blank and Anthony Tarquin
Chapter 1
Foundations of Engineering Economy
Basic Concepts
1.1 Financial units for economically best.
N
1.2 Morale, goodwill, dependability, acceptance, friendship, convenience, aesthetics, etc.
1.3 Measure of worth is a criterion used to select the economically best alternative. Some
U
measures are present worth, rate of return, payback period, benefit/cost ratio.
1.4 The color I like, best fuel rating, roomiest, safest, most stylish, fastest, etc.
R
1.5 Sustainability: Intangible; installation cost: tangible; transportation cost: tangible;
simplicity: intangible; taxes: tangible; resale value: tangible; morale: intangible;
SE
rate of return: tangible; dependability: intangible; inflation: tangible; acceptance by others:
intangible; ethics: intangible.
1.6 Examples are: house purchase; car purchase, credit card (which ones to use); personal loans
(and their rate of interest and repayment schedule); investment decisions of all types; when to
sell a house or car.
D
Ethics
1.7 This problem can be used as a discussion topic for a team-based exercise in class.
O
(a) Most obvious are the violations of Canons number 4 and 5. Unfaithfulness to the client
and deceptive acts are clearly present.
(b) The Code for Engineer’s is only partially useful to the owners in determining sound bases
C
since the contractor is not an engineer. Much of the language of the Code is oriented
toward representation, qualifications, etc., not specific acts of deceit and fraudulent
behavior. Code sections may be somewhat difficult to interpret in construction of a
house.
S
(c) Probably a better source would be a Code for Contractor’s or consulting with a real estate
attorney.
1.8 Many sections could be identified. Some are: I. b; II.2.a and b; III.9.a and b.
1.9 Example actions are:
Try to talk them out of doing it now, explaining it is stealing
Try to get them to pay for their drinks
© McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written
consent of McGraw Hill LLC.
, Pay for all the drinks himself
Walk away and not associate with them again
1.10 This is structured to be a discussion question; many responses are acceptable. Responses
can vary from the ethical (stating the truth and accepting the consequences) to unethical
(continuing to deceive himself and the instructor and devise some on-the-spot excuse).
Lessons can be learned from the experience. A few of them are:
Think before he cheats again.
Think about the longer-term consequences of unethical decisions.
Face ethical-dilemma situations honestly and make better decisions in real time.
Alternatively, Claude may learn nothing from the experience and continue his unethical
N
practices.
Interest Rate and Rate of Return
U
R
1.11
SE
1.12 (a)
(b) Interest = total amount paid − principal
= 1,936,000 − 1,600,000
D
= $336,000
1.13
O
1.14
C
S
1.15
The $56,000 investment has the highest rate of return
© McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written
consent of McGraw Hill LLC.
Engineering Economy, 9th Edi on
By Blank, Leland
N
U
R
SE
D
O
C
S
,TABLE OF CONTENT
1) Foundations of Engineering Economy
2) Factors: How Time and Interest Affect Money
3) Combining Factors and Spreadsheet Functions
4) Nominal and Effective Interest Rates
Learning Stage 2 - Basic Analysis Tools
5) Analysis Using Present Worth and Future Worth Values
6) Annual Worth Analysis
7) Rate of Return Analysis: One Project
N
8) Rate of Return Analysis: Multiple Alternatives
9) Benefit/Cost Analysis and Public Sector Economics
U
Learning Stage 2 - Epilogue: Selecting the Basic Analysis Tool
Learning Stage 3 - Making Decisions
R
10) Project Financing and Noneconomic Attributes
11) Replacement and Retention Decisions
SE
12) Independent Projects with Budget Limitation
13) Breakeven and Payback Analysis
Learning Stage 4 - Rounding Out the Study
14) Effects of Inflation
D
15) Cost Estimation and Indirect Cost Allocation
16) Depreciation and Depletion Methods
O
17) After-Tax Economic Analysis
18) Sensitivity Analysis and Staged Decisions
19) Decision Making under Risk
C
S
, Solutions to end-of-chapter problems
Engineering Economy, 9th edition
Leland Blank and Anthony Tarquin
Chapter 1
Foundations of Engineering Economy
Basic Concepts
1.1 Financial units for economically best.
N
1.2 Morale, goodwill, dependability, acceptance, friendship, convenience, aesthetics, etc.
1.3 Measure of worth is a criterion used to select the economically best alternative. Some
U
measures are present worth, rate of return, payback period, benefit/cost ratio.
1.4 The color I like, best fuel rating, roomiest, safest, most stylish, fastest, etc.
R
1.5 Sustainability: Intangible; installation cost: tangible; transportation cost: tangible;
simplicity: intangible; taxes: tangible; resale value: tangible; morale: intangible;
SE
rate of return: tangible; dependability: intangible; inflation: tangible; acceptance by others:
intangible; ethics: intangible.
1.6 Examples are: house purchase; car purchase, credit card (which ones to use); personal loans
(and their rate of interest and repayment schedule); investment decisions of all types; when to
sell a house or car.
D
Ethics
1.7 This problem can be used as a discussion topic for a team-based exercise in class.
O
(a) Most obvious are the violations of Canons number 4 and 5. Unfaithfulness to the client
and deceptive acts are clearly present.
(b) The Code for Engineer’s is only partially useful to the owners in determining sound bases
C
since the contractor is not an engineer. Much of the language of the Code is oriented
toward representation, qualifications, etc., not specific acts of deceit and fraudulent
behavior. Code sections may be somewhat difficult to interpret in construction of a
house.
S
(c) Probably a better source would be a Code for Contractor’s or consulting with a real estate
attorney.
1.8 Many sections could be identified. Some are: I. b; II.2.a and b; III.9.a and b.
1.9 Example actions are:
Try to talk them out of doing it now, explaining it is stealing
Try to get them to pay for their drinks
© McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written
consent of McGraw Hill LLC.
, Pay for all the drinks himself
Walk away and not associate with them again
1.10 This is structured to be a discussion question; many responses are acceptable. Responses
can vary from the ethical (stating the truth and accepting the consequences) to unethical
(continuing to deceive himself and the instructor and devise some on-the-spot excuse).
Lessons can be learned from the experience. A few of them are:
Think before he cheats again.
Think about the longer-term consequences of unethical decisions.
Face ethical-dilemma situations honestly and make better decisions in real time.
Alternatively, Claude may learn nothing from the experience and continue his unethical
N
practices.
Interest Rate and Rate of Return
U
R
1.11
SE
1.12 (a)
(b) Interest = total amount paid − principal
= 1,936,000 − 1,600,000
D
= $336,000
1.13
O
1.14
C
S
1.15
The $56,000 investment has the highest rate of return
© McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written
consent of McGraw Hill LLC.
