Skip to content
Textbook Guides

Solution Manual For Engineering Economy, 15th Edition

Maximize your understanding with Solution Manual For Engineering Economy, 15th Edition, a detailed solutions manual for all your textbook problems.

Preview 16 of 781 pages

See the first 16 pages exactly as they appear in the document.

  1. Page 1
    Read page 1 as text

    E N G IN EER IN G E CONOM Y FIFTEENTH EDITION Solutions Manual WILLIAM G. SULLIVAN ELIN M. WICKS C. PATRICK KOELLING Virginia Polytechnic Institute Wicks and Associates, L . L . P. Virginia Poly te chnic Institute and State University and State University

  2. Page 2
  3. Page 3
    Read page 3 as text

    1 Solutions to Chapter 1 Problems A Note To Instructors: Because of volatile energy prices in today's world, the instructor is encouraged to vary energy prices in affected problems (e.g. the price of a gallon of gasoline) plus and minus 50 percent and ask students to determine whether this range of prices changes the recommendation in the problem. This should make for stimulating in- class discussion of the results. 1-1 Because each pound of CO 2 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)($3.00/gallon) = $0.96, 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?

  4. Page 4
    Read page 4 as text

    2 1-2 Other information needed includes total number of miles driven each year and the gas consumption (miles per gallon) of the average delivery vehicle.

  5. Page 5
    Read page 5 as text

    3 1-3 Some non-monetary factors (attributes) that might be important are:  Safety  Reliability (from the viewpoint of user service)  Quality in terms of consumer expectations  Aesthetics (how it looks, and so on)  Patent considerations

  6. Page 6
    Read page 6 as text

    4 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 ($803 − $500) + $60 × 5 years = $603. This amount is less than paying $803 out-of-pocket, so Tyler probably should have submitted an insurance claim. But if his premiums go higher and higher each subsequent year (another assumption!), Tyler ought to pursue option 1. 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.

  7. Page 7
    Read page 7 as text

    5 1-5 (a) 15,000 miles per year / 25 mpg = 600 gallons per year of E20 Savings = 600 gallons per year ($3.00 − $2.55) = $270 per year (b) Gasoline saved = 0.20 (600 gal/yr)(1,000,000 people) = 120 million gallons per year

  8. Page 8
    Read page 8 as text

    6 1-6 The environmental impact on the villagers is unknown, but their spring and summer crop yields could be affected by more than normal snow melt. Let's assume this cost is $10 million. Then the total cost of the plan is $6 million (180 million rubles) plus $10 million and the plan is no longer cost-effective when this additional externality is considered.

  9. Page 9
    Read page 9 as text

    7 1-7 There are numerous other options including a nuclear plant, a 100% gas-fired plant and a windmill bank at a nearby mountain pass. Also, solar farms are becoming more cost competitive nowadays.

  10. Page 10
    Read page 10 as text

    8 1-8 Increased lifetime earnings of a college graduate = $1,200,000(0.75) = $900,000

  11. Page 11
    Read page 11 as text

    9 1-9 Strategy 1: Change oil every 3,000 miles. Cost = (15,000/3,000)($30) = $150 / year Strategy 2: Change oil every 5,000 miles. Cost = (15,000/5,000)($30) = $90 / year Savings = $60 per year

  12. Page 12
    Read page 12 as text

    10 1-10 In six months you will spend approximately $360 on bottled water. The cost of the filter is $50, so you will save $310 every four months. This amounts to $620 over a year, and you don't need to bother re- cycling all those plastic bottles! An up-front expenditure of $50 can indeed save a lot of money each year.

  13. Page 13
    Read page 13 as text

    11 1-11 110 gallons x $3.00 per gallon = $330 saved over 55,000 miles of driving. This comes down to $330 / 55,000 = $0.006 per mile driven. So Brand A saves 6/10 of a penny for each mile driven.

  14. Page 14
    Read page 14 as text

    12 1-12 (a) Problem: To find the least expensive method for setting up capacity to produce drill bits. (b) Assumptions: The revenue per unit will be the same for either machine; startup costs are negligible; breakdowns are not frequent; previous employee’s data are correct; drill bits are manufactured the same way regardless of the alternative chosen; in-house technicians can modify the old machine so its life span will match that of the new machine; neither machine has any resale value; there is no union to lobby for in- house work; etc. (c) Alternatives: (1) Modify the old machine for producing the new drill bit (using in-house technicians); (2) Buy a new machine for $450,000; (3) Get McDonald Inc. to modify the machine; (4) Outsource the work to another company. (d) Criterion: Least cost in dollars for the anticipated production runs, given that quality and delivery time are essentially unaffected (i.e., not compromised). (e) Risks: The old machine could be less reliable than a new one; the old machine could cause environmental hazards; fixing the old machine in-house could prove to be unsatisfactory; the old machine could be less safe than a new one; etc. (f) Non-monetary Considerations: Safety; environmental concerns; quality/reliability differences; “flexibility” of a new machine; job security for in-house work; image to outside companies by having a new technology (machine); etc. (g) Post Audit: Did either machine (or outsourcing) fail to deliver high quality product on time? Were maintenance costs of the machines acceptable? Did the total production costs allow an acceptable profit to be made?

  15. Page 15
    Read page 15 as text

    13 1-13 (a) Problem A: Subject to time, grade point average and energy that Mary is willing/able to exert, Problem A might be "How can Mary survive the senior year and graduate during the coming year (earn a college degree)?" Problem B: Subject to knowledge of the job market, mobility and professional ambition, Mary's Problem B could be "How can I use my brother's entry-level job as a spring board into a higher- paying position with a career advancement opportunity (maybe no college degree)?" (b) Problem A - Some feasible solutions for Problem A would include: (1) Get a loan from her brother and take fewer courses per term, possibly graduating in the summer. (2) Quit partying and devote her extra time and limited funds to the task of graduating in the spring term (maybe Mary could get a scholarship to help with tuition, room and board). Problem B - Some feasible solutions for Problem B would include: (1) Work for her brother and take over the company to enable him to start another entrepreneurial venture. (2) Work part-time for her brother and continue to take courses over the next couple of years in order to graduate. (3) Work for her brother for one or two semesters to build up funds for her senior year. While interviewing, bring up the real life working experience and request a higher starting salary.

  16. Page 16
    Read page 16 as text

    14 1-14 A Typical Discussion/Solution: (a) One problem involves how to satisfy the hunger of three students -- assume a piping hot delicious pizza will satisfy this need. (Another problem is to learn enough about Engineering Economy to pass -- or better yet earn an “A” or a “B” -- on the final examination and ace the course. Maybe a pizza will solve this problem too?) Let’s use “hunger satisfaction with a pizza” as the problem/need definition. (b) Principle 1 - Develop the Alternatives i) Alternative A is to order a pizza fr om “Pick - Up Sticks” ii) Alternative B is to order a pizza from “Fred’s” Other options probably exist but we’ll stick to these two alternatives Principle 2 - Focus on the Differences Difference in delivery time could be an issue. A perceived difference in the quality of the ingredients used to make the pizza could be another factor to consider. We’ll concentrate our attention on cost differences in part (c) to follow. Principle 3 - Use a Consistent Viewpoint Consider your problem from the perspective of three customers wanting to get a good deal. Does it make sense to buy a pizza having a crust that your dog enjoys, or ordering a pizza from a shop that employs only college students? Use the customer’s point of view in this situation rather than that of the owner of the pizza shop or the driver of the delivery vehicle. Principle 4 - Use a Common Unit of Measure Most people use “dollars” as one of the most important measures for examining differences between alternatives. In deciding which pizza to o rder, we’ll use a cost -based metric in part (c). Principle 5 - Consider All Relevant Criteria Factors other than cost may affect the decision about which pizza to order. For example, variety and quality of toppings and delivery time may be extremely important to your choice. Dynamics of group decision making may also introduce various “political” considerations into the final selection (can you name a couple?) Principle 6 - Make Uncertainty Explicit The variability in quality of the pizza, its delivery time and even its price should be carefully examined in making your selection. (Advertised prices are often valid under special conditions -- call first to check on this!) Principle 7 - Revisit Your Decision After you’ve consumed your pizza and retu rned to studying for the final exam, were you pleased with the taste of the toppings? On the downside, was the crust like cardboard? You’ll keep these sorts of things in mind (good and bad) when you order your next pizza!

765 more pages in the full document

Unlock it once and it stays in your library, ready to chat with or turn into flashcards.

Unlock the full document

More Engineering study materials

See all

Study this document with CramX

Once it is in your library, every tool can work from it.