1.You are the project manager for a manufacturing company that is considering a new manufacturing line with target completion date by end-of-year 2017. Working with the Engineering and Purchasing members of your project team to develop a preliminary cost of this line for the company capital budget, you determine that the total delivered cost of the major equipment items will be $9.2 M at the time of receipt in mid-year 2017. This total cost was developed from vendor estimates received by Purchasing and inflated to 2017 dollars by applying the projected manufacturing cost inflation indices for years 2014 thru 2016. Using the factored (delivered) equipment cost method, determine the preliminary estimate of total cost for the new line. The Engineering member of the team advises that the historical 3.5 factor applies. Also, he advises that 15 percent should be allowed for engineering costs and 10 percent for contingencies, respectively. No additional infrastructure is required. Find the estimated plant cost. (5 points)

2. Your company completed a production line in 2010 to manufacture a certain new assembled product. Although demand growth was initially slow, demand for this product is now growing rapidly. You have been appointed manager of a project to construct an additional production unit at the same location using the same technology. The production line total cost was $35.7M in 2010. Because the product demand is accelerating, your senior management directs that the new line capacity be 50 percent greater than the existing line. Target completion for this line is the end of 2018. No additional infrastructure is required. The construction cost index at the end of 2010 was 439.6 (based on 1959 costs). The construction cost index projected for 2018 is 595.5. (based on 1959 costs). The Engineering member of your team advises that a size scale-up correlation exponent of 0.7 should be used. What is the estimated cost of the larger second line to be completed in 2015? (5 points)