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Assignment 2

# Assignment 2

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07/06/2013

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Engineering Economy255330Assignment 2
Chapter 3
Combining Factors
Due Date:
3.3 Amalgamated Iron and Steel purchased a new machine for ram camberinglarge I – beams. The company expects to bend 80 beams at \$2000 per beamin each of the first 3 years, after which the company expects to bend 100beams per year at \$2500 per beam through year 8. If the company’s minimumattractive rate of return is 18% per year, what is the present worth of theexpected income? (P = \$823,691)3.9 A metallurgical engineer decides to set aside money for his newborn daughter’scollege education. He estimates that her needs will be \$20,000 on her 17th,18th, 19th, and 20
th
birthdays. If he plans to make uniform deposits starting 3years from now and continue through year 16, what should be the size of each deposit, if the account earns interest at a rate of 8% per year?(A = \$2735.79)3.22 Use the cash flow diagram below to calculate the amount of money in year 5that is equivalent to all the cash flows shown, if the interest rate is 12% per year. (Amt, year 5 = \$14,145)3.27 Find the value of
x
below such that the positive cash flows will be exactlyequivalent to the negative cash flows, if the interest rate is 14% per year.(x = \$6124.64)
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