-2 Principle 1 would lead to numerous other means for launching payloads into space. For example, using

1 1-1Because each pound of CO2 has a penalty of $0.20, Savings = (15 gallons  $0.10/gallon)  (8 lb)($0.20/lb) = $1.34 If Stan can drive his car for less than $1.34/8 = $0.1675 per mile, he should make the trip. The cost of gasoline only for the trip is (8 miles  25 miles/gallon)($3.90/gallon) = $1.25, but other costs of driving, such as insurance, maintenance, and depreciation, may also influence Stan’s decision. What is the cost of an accident, should Stan have one during his weekly trip to purchase less expensive gasoline? If Stan makes the trip weekly for a year, should this influence his decision? © 2015 Pearson Education, Inc., Upper Saddle River, NJ. All rights reserved. This publication is protected by Copyright and written permission should be obtained from the publisher prior to any prohibited reproduction, storage in a retrieval system, or transmission in any form or by any means, electronic, mechanical, photocopying, recording, or likewise. For information regarding permission(s), write to: Rights and Permissions Department, Pearson Education, Inc., Upper Saddle River, NJ 07458.(Engineering Economy, 16e William Sullivan, Elin Wicks, Patrick Koelling) (For Complete File, Download link at the end of this File) Chapter 1 1 / 4

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1 -2 Principle 1 would lead to numerous other means for launching payloads into space. For example, using private U.S. or foreign firms are other viable options.

Principle 2 forces differences in costs and benefits of alternative launching methods to be identified and measured.Principle 3 establishes a consistent viewpoint to be utilized in the analysis of launching methods (e.g. the perspective of the U.S. government).Principle 4 reduces the costs and benefits identified by Principal 2 to a common unit of comparison, expressed in dollars (or other monetary units).Principal 5 ensures that no significant criteria in evaluating alternatives are overlooked.Principle 6 identifies risks associated with each alternative-- including them in the analysis is of critical importance.Principal 7 allows the analyst to determine how a good (or poor) decision was made and why. This should impact on subsequent decision making.© 2015 Pearson Education, Inc., Upper Saddle River, NJ. All rights reserved. This publication is protected by Copyright and written permission should be obtained from the publisher prior to any prohibited reproduction, storage in a retrieval system, or transmission in any form or by any means, electronic, mechanical, photocopying, recording, or likewise. For information regarding permission(s), write to: Rights and Permissions Department, Pearson Education, Inc., Upper Saddle River, NJ 07458. 2 / 4

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1 -3 Cost per Watt-hour = $0.75/1.5 Watt-hours = $0.50 per Watt-hour

At a cost of $0.50 per Watt-hour, it would cost (1,000)($0.50 per Watt-hour) = $500 per kilo Watt-hour for power from a single AAA battery. This is 5,000 times more costly than energy from your local utility.No wonder we turn off our battery operated devices when we're not using them! © 2015 Pearson Education, Inc., Upper Saddle River, NJ. All rights reserved. This publication is protected by Copyright and written permission should be obtained from the publisher prior to any prohibited reproduction, storage in a retrieval system, or transmission in any form or by any means, electronic, mechanical, photocopying, recording, or likewise. For information regarding permission(s), write to: Rights and Permissions Department, Pearson Education, Inc., Upper Saddle River, NJ 07458. 3 / 4

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1 -4 At first glance, Tyler’s options seem to be: (1) immediately pay $803 to the owner of the other person’s car or (2) submit a claim to the insurance company. If Tyler keeps his Nissan for five more years (an assumption), the cost of option 2 is $500

• ($60 × 2 payments/year) × 5 years = $1,100. This amount is

more than paying $803 out-of-pocket, so Tyler appears to have made the most economical choice.

What we don’t know in this problem is the age and condition of the other person’s car. If we assume it’s a clunker, another option for Tyler is to offer to buy the other person’s car and fix it himself and then sell it over the internet. Or Tyler could donate the unrepaired (or repaired) car to his favorite charity.© 2015 Pearson Education, Inc., Upper Saddle River, NJ. All rights reserved. This publication is protected by Copyright and written permission should be obtained from the publisher prior to any prohibited reproduction, storage in a retrieval system, or transmission in any form or by any means, electronic, mechanical, photocopying, recording, or likewise. For information regarding permission(s), write to: Rights and Permissions Department, Pearson Education, Inc., Upper Saddle River, NJ 07458.

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