11/15/21, 9:25 AM Quiz 7-AW Evaluation: Group 4 ES-ECON - ENGINEERING ECONOMICS

Quiz 7-AW Evaluation

Due
Nov 15 at 9:30am
Points
100
Questions
5
Available
Nov 15 at 8:30am - Nov 15 at 9:30am
about 1 hour
Time Limit
60 Minutes

Instructions
Good Luck!

Attempt History
Attempt Time Score
LATEST Attempt 1
52 minutes 60 out of 100

Score for this quiz:

60 out of 100
Submitted Nov 15 at 9:21am
This attempt took 52 minutes.

Question 1 20
/ 20 pts

White Oaks Properties builds strip shopping centers and small malls. The
company plans to replace its refrigeration, cooking, and HVAC equipment
with newer models in one entire center built 9 years ago. The original
purchase price of the equipment was $638,000 nine years ago and the
operating cost has averaged $240,000 per year. Determine the equivalent
annual cost of the equipment if the company can now sell it for $184,000.
The company’s MARR is 15% per year. 

 
-326774

 
-471709

 
-417079

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11/15/21, 9:25 AM Quiz 7-AW Evaluation: Group 4 ES-ECON - ENGINEERING ECONOMICS

Correct!  
-362747

Question 2 0
/ 20 pts

A delivery car had a first cost of $30,000, an annual operating cost of

$12,000, and an estimated $4000 salvage value after its 5-year life. Due
to an economic slowdown, the car will be retained for only 2 years and
must be sold now as a used vehicle. At an interest rate of 10% per year,
what must the market value of the 2-year-old vehicle be in order for its
AW value to be the same as the AW for a full 6-year life cycle?

orrect Answer  
-21057

 
-20157

 
-22923

ou Answered  
-23292

Question 3 20
/ 20 pts

A consulting engineering firm is considering two models of SUVs for the

company principals. A GM model will have a first cost of $36,000, an
operating cost of $3100, and a salvage value of $15,000 after 3 years. A
Ford model will have a first cost of $32,000, an operating cost of $4000,
and also have a $15,000 resale value, but after 4 years. (a) At an interest
rate of 15% per year, which model should the consulting firm buy?
Conduct an annual worth analysis.

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11/15/21, 9:25 AM Quiz 7-AW Evaluation: Group 4 ES-ECON - ENGINEERING ECONOMICS

 
FORD=-11,305

 
GM=-12, 402

Correct!  
FORD=-12,204

 
GM=-14,547

Question 4 20
/ 20 pts

Two methods can be used for producing solar panels for electric power
generation. Method 1 will have an initial cost of $550,000, an AOC of
$160,000 per year, and $120,000 salvage value after its 3-year life.
Method 2 will cost $830,000 with an AOC of $120,000, and a $240,000
salvage value after its 5-year life. Assume your boss asked you to
determine which method is better, but she wants the analysis done over a
3-year planning period. You estimate the salvage value of method 2 will
be 25% higher after 3 years than it is after 5 years. If the MARR is 10%
per year, which method should the company select? 

 
Select Method2= -334, 398

 
Select Method 2=-366,868

Correct!  
Select Method 1=-344,909

 
Select Method 1= -343,398

Question 5 0
/ 20 pts

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11/15/21, 9:25 AM Quiz 7-AW Evaluation: Group 4 ES-ECON - ENGINEERING ECONOMICS

Polymer Molding, Inc. is considering two processes for manufacturing

storm drains. Plan A involves conventional injection molding that will
require making a steel mold at a cost of $2 million. The cost for
inspecting, maintaining, and cleaning the molds is expected to be $60,000
per year. Since the cost of materials for this plan is expected to be the
same as for the other plan, this cost is not included in the comparison.
The salvage value for plan A is expected to be 10% of the first cost. Plan
B involves using an innovative process known as virtual engineered
composites wherein a floating mold uses an operating system that
constantly adjusts the water pressure around the mold and the chemicals
entering the process. The first cost to tool the floating mold is only
$795,000, but because of the newness of the process, personnel and
product-reject costs are expected to be higher than for a conventional
process. The company expects the operating costs to be $85,000 for the
first year and then decrease to $46,000 per year thereafter. There will be
no salvage value with this plan. At an interest rate of 5% per year, what is
the difference between their AW over a 3-year study period?

ou Answered
-379,405.7

orrect Answers Between 379,405 and 379,410

Quiz Score:
60 out of 100

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