Subject : Engineering Economics Please write handwritten Answer The cost of erecting an oil well is Rs. 1, 50, 00, 000. The annual equivalent Incomeof oil well is Rs. 30, 00,000. The salvage value after its useful life of 10 years is Rs.2,00,000. Assuming an interest rate of 10 per cent compounded annually, find outwhether the erection of the well is financially feasible, based on future-worthmethod.

Referenceshttps://www.investopedia.com/articles/03/082703.asp

Answered: The cost of erecting an oil well is Rs.…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Book sales of a popular author are expected to start at 500,000 books in the first month. This numbe is expected to decrease by 8,000 books each month over the three-year study period. The author receives $5 per book sold. If the author places all monies received in a bank account eaming 1% interest per month, what is the present (time 0) equivalent value of the three years of book sales? Sales money is received at the end of each month and the first receipt will be one month from today.
TRUE OR FALSE For any economy study based on our discussions, it is always necessary to determine the profit to evaluate thebetter/best alternative. If simple interest is evaluated, then the interest obtained will always be directly proportional to the number of yearsassuming that a constant interest rate is used throughout these years.
4. in Year Income, $1000 Cost, $1000 MJ Corp produces and sells a new model of photoxaltais. (PV). Annual cash flows are shown table below. Determine the future worth of the net cash flows at an interest of 10% per year. 8 per year. 1 200 90 2 200 90 3 200 90 4 200 90 5 200 90 6 Don't use excel and please don't upload answers that were already posted 200 90 7 200 90 200 Hide Transcribed Text 4. MJ Corp produces and sells a new model of photovaltaic (PV). Annual cash flows are shown in table below. Determine the future worth of the net cash flows at an interest of 10% 90
Answer all, please A man decides to run a hot dog stand as a side hobby. He makes an initial investment of $1,264 which will produce monthly revenues of $896. If the hot dog stand is run for 13 months, what is the net present value at 1% monthly interest? Round your answer to the nearest dollar. If two alternatives have the same lifetime of 7 years, what would be the minimum length of the analysis period assuming that both alternatives are used for their lifetime? A piece of equipment has annual benefits of $142, but after the first year the revenue increases by $122 each year. Determine the net present worth of the equipment if the machine operates for 17 years and the annual interest rate is 4%. Round to the nearest dollar.
Major overhaul expenses of $5,000 each are anticipated for a large piece of earthmoving equipment. The expenses will occur at EOY four and will continue every three years thereafter up to and including year 13. The interest rate is 12% per year. Solve, a. Draw a cash-flow diagram. b. What is the present equivalent of the overhaul expenses at time 0? c. What is the annual equivalent expense during only years 5–13?
An investment proposal calls for a $417,805.55 payment now and a second $282,934.40 payment 9 years from now. The investment is for a project with a perpetual life. The annual interest rate is 6%. What is the equivalent uniform annual cost?
A new proposed energy project that will cost initially $20372and will save an annual total amount of $ 4562 for 12 years. If the old project requires parts installation in years 4 and 9 in the amount of $ 7200, what will the net present value for this project? Interest rate=8%
Jose wants to invest in a venture that will have an annual return of P120M and annual operating cost of P60M for the next 5 years. If money is worth 8% with a computed BCR = 1.9964, how much is the initial investment? P75M O P100M O P150M O P120M O PSOM O P200M none of the choices O P130M
An existing machine in a factory has an annual maintenance cost of 40,000 pesos. A new and more efficient machine will require an investment of 90,000 pesos and is estimated to have a salvage value of 30,000 pesos at the end of 8 years. Its annual expenses for maintenance total to 22,000 pesos. If the company expects to earn 12% on its investment, will it be worthwhile to purchase the new machine using the a) present worth method?
The annual income from an apartment complex is $23,155. The annual expense is estimated to be $2,588. The apartment complex could be sold for $110,110 at the end of 10 years. If your MARR is 10%, how much should you pay for the apartment complex if you were to buy it now?
ENGINEERING ECONOMY W/COMPLETE SOLUTION 3.) A man wishes his son to receive P500,000.00 ten years from now. What amount should he invest now if it will earn interest of 12% compounded annually during the period?
The maintenance costs of a piece of equipment are expected to be S1500 at the end of the first year and expected to increase by S125 each year through year seven. Assuming an interest rate of 10%. Match the following questions with the closest correct answers from the given list What is the present worth of base amount? A. $1595 B. $1280 What is the present worth of gradient amount? C. $7302 What is the present worth of maintenance costs? D. $294 , What is the equivalent annual cost? E. S435.24 F. S8898 G. S1827

SEE MORE QUESTIONS

Recommended textbooks for you

ENGR.ECONOMIC ANALYSIS

Economics

ISBN:

9780190931919

Author:

NEWNAN

Publisher:

Oxford University Press

Principles of Economics (12th Edition)

Economics

ISBN:

9780134078779

Author:

Karl E. Case, Ray C. Fair, Sharon E. Oster

Publisher:

PEARSON

Engineering Economy (17th Edition)

Economics

ISBN:

9780134870069

Author:

William G. Sullivan, Elin M. Wicks, C. Patrick Koelling

Publisher:

PEARSON

ENGR.ECONOMIC ANALYSIS

Economics

ISBN:

9780190931919

Author:

NEWNAN

Publisher:

Oxford University Press

Principles of Economics (12th Edition)

Economics

ISBN:

9780134078779

Author:

Karl E. Case, Ray C. Fair, Sharon E. Oster

Publisher:

PEARSON

Engineering Economy (17th Edition)

Economics

ISBN:

9780134870069

Author:

William G. Sullivan, Elin M. Wicks, C. Patrick Koelling

Publisher:

PEARSON

Principles of Economics (MindTap Course List)

Economics

ISBN:

9781305585126

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

Managerial Economics: A Problem Solving Approach

Economics

ISBN:

9781337106665

Author:

Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:

Cengage Learning

Managerial Economics & Business Strategy (Mcgraw-…

Economics

ISBN:

9781259290619

Author:

Michael Baye, Jeff Prince

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS