NAME:______Mirai Jrooj______ ____ SID:____105217073____

GENG-3130 (01 & 02) Engineering Economics Tutorial Assignment #7

Due: 12PM, November 12, 2021 (submission through Blackboard only, no e-mail submission)
Problem #1 (3/10): New Data for two independent equipment upgrade projects are shown below:

(a) For a MARR of 8%, should either, both or neither machine be purchased? Using the Annual
Worth method.
(b) What are the payback period for these machines? Should either, both or neither machine be
purchased, based on the payback period? The company’s required payback period for such
equipment upgrade projects is 3 years.

GAs on duty: Razieh Kiani Harchegani, Nicholas Vinten, Anik Chandra Dash
NAME:______Mirai Jrooj______ ____ SID:____105217073____

GAs on duty: Razieh Kiani Harchegani, Nicholas Vinten, Anik Chandra Dash
NAME:______Mirai Jrooj______ ____ SID:____105217073____

Problem #2 (2/10): A new packaging machine will save Greene Cheese Ltd. $3000 per year in
reduced spoilage, save $5000 per year in labour, and save $4000 per year in packaging material.
The new machine will have additional expenses of $1500 per year in maintenance and $500 per year
in energy. If it costs $68,000 to purchase, what is its payback period? Assume that the savings are
earned throughout the year, not just at year end.

GAs on duty: Razieh Kiani Harchegani, Nicholas Vinten, Anik Chandra Dash
NAME:______Mirai Jrooj______ ____ SID:____105217073____

Problem #3 (2/10): A projects is being considered by XYZ Co. Detailed cash flows for this project
are: Project initial cost: $212,840. Annual benefit of $25,000 for 20 years
If XYZ Co. is using MARR of 8%, find the IRR for this project.

GAs on duty: Razieh Kiani Harchegani, Nicholas Vinten, Anik Chandra Dash
NAME:______Mirai Jrooj______ ____ SID:____105217073____

Problem #4 (3/10): New windows are expected to save $500 per year in energy costs over their
25-year life for Fox Fabricating. At an initial cost of $8,000 and zero salvage value, using IRR, are
they a good investment? Fox’s MARR is 7%. You can use the EXCEL function to verify your
solution, but you need to solve this problem based on the trial & error procedure discussed in
class, combined with linear interpolation.

GAs on duty: Razieh Kiani Harchegani, Nicholas Vinten, Anik Chandra Dash