9. 8.42 Titan manufactures and sells gas-powered electricity generators. It can purchase a new line of fuel

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9. 8.42 Titan manufactures and sells gas-powered electricity generators. It can purchase a new line of fuel injectors from either of two companies: A or B. The AOC and annual savings estimates are available, but the savings estimate is unreliable at this time. Use an AW analysis at MARR = 10% per year to determine if the selection between A and B changes when the estimated savings varies as much as ±40% from the best estimates, and if so, at what percentage in the estimate? Use tabulated factors or a spreadsheet, as requested by your instructor. Table Summary: Table divided into two columns compares two companies selling fuel injectors based on savings and rate of return. The column headers are marked from left to right as: company; A; and B. Company A B First cost, $ −50,000 −37,500 AOC, $ per year −7,500 −8,000 Savings best estimate, $ per year 15,000 13,000 Salvage value, $ 5,000 3,700 Life, years 5 5

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Basics Of Engineering Economy

ISBN: 9781259683312

3rd Edition

Authors: Leland T. Blank, Anthony Tarquin

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