Engineering Economic

    1. Fin" rel="nofollow">ind the present value, P, for the followin" rel="nofollow">ing cash flows. i = 12% 2. Star Inc. must purchase a small size millin" rel="nofollow">ing machin" rel="nofollow">ine. The followin" rel="nofollow">ing is known about the machin" rel="nofollow">ine and about possible cash flows. The machin" rel="nofollow">ine is expected to have a useful life of 8 years. The company has a MARR of 7%. Determin" rel="nofollow">ine the NPW of the machin" rel="nofollow">ine. p=.25 p=.50 p=.25First cost $40,000 $40,000 $40,000Annual savin" rel="nofollow">ings 2,000 5,000 8,000Annual costs 12,000 8,000 6,000Actual salvage value 4,000 5,000 6,500 3. The company accountant is uncertain" rel="nofollow">in which of three depreciation methods the firm should use for weldin" rel="nofollow">ing equipment that costs $150,000, and has a zero salvage value at the end of a 10-year depreciable life. Compute the depreciation schedule for the weldin" rel="nofollow">ing equipment usin" rel="nofollow">ing the methods listed:a. Straight lin" rel="nofollow">ineb. Double declin" rel="nofollow">inin" rel="nofollow">ing balancec. Sum-of-years’ –digits Based on your analysis, which depreciation method is most profitable for the firm?4. A Petroleum company recently completed construction on a large refin" rel="nofollow">inery in" rel="nofollow">in Louisiana. The fin" rel="nofollow">inal construction cost was $71,000,000. The refin" rel="nofollow">inery covers a total of 260 acres. The Expansion and Acquisition Department at the company is currently workin" rel="nofollow">ing on plans for a new refin" rel="nofollow">inery in" rel="nofollow">in Texas. The anticipated size is approximately 360 acres. If the power-sizin" rel="nofollow">ing exponent for this type of facility is .70, what is the estimated cost of construction?