.png){kind=logo}
Chapter 1 Engineering Economic Decisions 1.1) Not pr ovided For The Wall Street Journal, go to the Front page to find the section on “What’s News.” This is a section on a brief summary on major headlines of the day’s news. Quickly browse through the news summary to see if there is any news related to business investment. The best places to find the major business news on investment are sections on “BUSINESS”, “MARKETS” or “TECH.” 1.2) Not provided
Some of the well-known business publications are:
•Daily Newspapers:
oThe Wall Street Journal oThe New York Times (Business Section) oFinancial Times
•Weekly or Monthly Magazines:
oBusinessWeek oForbes oMoney oSmart Money oFortune Fundamentals of Engineering Economics, 4e Chan Park (Solutions Manual All Chapters, 100% Original Verified, A+ Grade) 1 / 4
Chapter 2: Time Value of Money
2.1) ( ) (0.06)($2,000)(5) $600I iP N= == 2.2) •S
imple interest:
$20,000=$10 ,000
(1+0.075N)
(1+0.075N)=2
N= 1 0.075 =13.33≈14years
•Compound interest:
2.3)
•Simple interest:
(0.10)($10,000)(5) $5,000I iPN= ==
•Compound interest:
[(1 ) 1] $10,000(1.6105 1) $6,105
N IP i= + −=−= 2.4) •Option 1: Compound interest with 8.5%: 5
$4,500(1 0.085) $4,500(1.5037) $6,766.65F= += =
•Option 2 : Simple interest with 9%:
$4,500(1 0.09 5) $5,000(1.45) $6,525+ ×= =
∴ Option 1 is still better.
$20,000=$10 ,000(1+0.07)
N
(1+0.07)
N =2 N=10.24≈11years 2 / 4
2.5)
•Compound interest:
5
$1,000(1 0.065)
$1,370.09
F= + =
•Simple interest:
$1,000(1 0.068(5))
$1,340
F= + = The compound interest option is better.
2.6) End of Year Principal Repayment Interest payment Remaining Balance
0 $15,000.00
1 $4,620.50 $1,200.00 $10,379.50
2 $4,990.14 $830.36 $5,389.36
3 $5,389.35 $431.15 $0
2.7)
$22,000( / ,5%,5) $22,000(0.7835) $17,237.58P PF===
2.8) $30,000( / ,9%,3) $30,000(1.295) $38,850.87F FP== =
2.9)
$100( / ,10%,10) $200( / ,10%,8) $688F F PF P=+=
2.10) $250,000( / ,6%,10) $447,712F FP==
2.11) $300,000( / ,8%,10) $138,958P P F==
2.12) 10.5%i= , two-year discount rate is 2 (1 0.105) 1.221 (or 22.1%)+= 2.13) (a) $5,000( / ,7%,5) $7,013F FP== 3 / 4
(b) $7,250( / ,9%,15) $26,408F FP== (c) $9,000( / ,6%,33) $61,565F FP== (d)$12,000( / ,5.5%,8) $18,416F FP== 2.14) ( a)
$25,500( / ,12%,8) $10,299P PF==
(b) $58,000( / ,4%,12) $36,227P PF== (c) $25,000( / ,6%,9) $14,797P PF== (d) $35,000( / ,9%,4) $24,795P PF== 2.15) (a) $12,000( / ,13%,4) $7,360P P F== (b) $30,000( / ,13%,5) $55,273F F P== 2.16)
3 (1 0.08)
log3 log(1.08) 14.27 15 years N F PP N N = = + = = → 2.17)
2 (1 0.06)
log 2 log 1.06 11.896 years (or 12 years) N F PP N N = = + = = 2.18) •
2 (1 0.06)
log 2 log(1.06) 11.90 years 12 years N F PP N N = = + = =
•Rule of 72: 72 / 6 12 years=
2.19) 394 $1(1.08) $14,755,694,730,611F= =
- / 4
.png)