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Engineering Economy, Sixteenth Edition Sullivan | Wicks | Koelling Copyright ©2015, 2012, 2009 by Pearson Education, Inc. All rights reserved. Figure 6-1.

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Presentation on theme: "Engineering Economy, Sixteenth Edition Sullivan | Wicks | Koelling Copyright ©2015, 2012, 2009 by Pearson Education, Inc. All rights reserved. Figure 6-1."— Presentation transcript:

1 Engineering Economy, Sixteenth Edition Sullivan | Wicks | Koelling Copyright ©2015, 2012, 2009 by Pearson Education, Inc. All rights reserved. Figure 6-1 Cash-Flow Diagrams for Alternatives A and B and Their Difference

2 Engineering Economy, Sixteenth Edition Sullivan | Wicks | Koelling Copyright ©2015, 2012, 2009 by Pearson Education, Inc. All rights reserved. Figure 6-2 Cash-Flow Diagrams for Alternatives C and D and Their Difference

3 Engineering Economy, Sixteenth Edition Sullivan | Wicks | Koelling Copyright ©2015, 2012, 2009 by Pearson Education, Inc. All rights reserved. TABLE 6-1 Comparison of Four Molding Presses, Using the PW, AW, and FW Methods to Minimize Total Costs

4 Engineering Economy, Sixteenth Edition Sullivan | Wicks | Koelling Copyright ©2015, 2012, 2009 by Pearson Education, Inc. All rights reserved. Figure 6-3 Spreadsheet Solution, Example 6-2

5 Engineering Economy, Sixteenth Edition Sullivan | Wicks | Koelling Copyright ©2015, 2012, 2009 by Pearson Education, Inc. All rights reserved. TABLE 6-2 Comparison of Four Molding Presses, Using the PW, AW, and FW Methods to Maximize Overall Profitability

6 Engineering Economy, Sixteenth Edition Sullivan | Wicks | Koelling Copyright ©2015, 2012, 2009 by Pearson Education, Inc. All rights reserved. Figure 6-4 Spreadsheet Solution, Example 6-3

7 Engineering Economy, Sixteenth Edition Sullivan | Wicks | Koelling Copyright ©2015, 2012, 2009 by Pearson Education, Inc. All rights reserved. Figure 6-5 Illustration of the Ranking Error in Studies Using the IRR Method

8 Engineering Economy, Sixteenth Edition Sullivan | Wicks | Koelling Copyright ©2015, 2012, 2009 by Pearson Education, Inc. All rights reserved. Figure 6-6 Incremental Investment Analysis Procedure

9 Engineering Economy, Sixteenth Edition Sullivan | Wicks | Koelling Copyright ©2015, 2012, 2009 by Pearson Education, Inc. All rights reserved. TABLE 6-3 Comparison of Five Acceptable Investment Alternatives Using the IRR Method (Example 6-4)

10 Engineering Economy, Sixteenth Edition Sullivan | Wicks | Koelling Copyright ©2015, 2012, 2009 by Pearson Education, Inc. All rights reserved. TABLE 6-4 Comparison of Four Cost (Design) Alternatives Using the IRR and PW Methods with Incremental Analysis (Example 6-5)

11 Engineering Economy, Sixteenth Edition Sullivan | Wicks | Koelling Copyright ©2015, 2012, 2009 by Pearson Education, Inc. All rights reserved. Figure 6-7 Representation of Capital Investment Increments and IRR on Increments Considered in Selecting Design 3 (D3) in Example 6-5

12 Engineering Economy, Sixteenth Edition Sullivan | Wicks | Koelling Copyright ©2015, 2012, 2009 by Pearson Education, Inc. All rights reserved. Figure 6-8 Spreadsheet Solution, Example 6-5

13 Engineering Economy, Sixteenth Edition Sullivan | Wicks | Koelling Copyright ©2015, 2012, 2009 by Pearson Education, Inc. All rights reserved. TABLE 6-5 Comparison of Three Mutually Exclusive Alternatives Using the ERR Method (Example 6-6)

14 Engineering Economy, Sixteenth Edition Sullivan | Wicks | Koelling Copyright ©2015, 2012, 2009 by Pearson Education, Inc. All rights reserved. Figure 6-9 Illustration of Repeatability Assumption (Example 6-7) and Coterminated Assumption (Example 6- 8)

15 Engineering Economy, Sixteenth Edition Sullivan | Wicks | Koelling Copyright ©2015, 2012, 2009 by Pearson Education, Inc. All rights reserved. Figure 6-10 Spreadsheet Solution, Example 6-7

16 Engineering Economy, Sixteenth Edition Sullivan | Wicks | Koelling Copyright ©2015, 2012, 2009 by Pearson Education, Inc. All rights reserved. Figure 6-11 Spreadsheet Solution, Example 6-10

17 Engineering Economy, Sixteenth Edition Sullivan | Wicks | Koelling Copyright ©2015, 2012, 2009 by Pearson Education, Inc. All rights reserved. Figure 6-12 Cash-Flow Diagrams for the Pump Models Being Compared in Example 6-11

18 Engineering Economy, Sixteenth Edition Sullivan | Wicks | Koelling Copyright ©2015, 2012, 2009 by Pearson Education, Inc. All rights reserved. Figure 6-13 Individuals control chart for Savings Gap by Project ID. Four projects (7, 17, 34, and 35) had gaps that are beyond the control limits and are classified as out of control. Determining what is different about how these estimates were determined will likely lead to a way to improve the process.

19 Engineering Economy, Sixteenth Edition Sullivan | Wicks | Koelling Copyright ©2015, 2012, 2009 by Pearson Education, Inc. All rights reserved. Figure 6-14 Scatter plot of Savings Gap versus Product Type. The smaller variation of the Legacy product estimation process is clearly evident in this view of the data.

20 Engineering Economy, Sixteenth Edition Sullivan | Wicks | Koelling Copyright ©2015, 2012, 2009 by Pearson Education, Inc. All rights reserved. Figure 6-15 Scatter plot of Savings Gap versus Facility. The symbol outlines allow one to visualize points with similar values. The West and East facilities have much greater variation in their savings estimates than the other locations.

21 Engineering Economy, Sixteenth Edition Sullivan | Wicks | Koelling Copyright ©2015, 2012, 2009 by Pearson Education, Inc. All rights reserved. Figure 6-16 Spreadsheet formulas for Individuals control chart. Only the first five projects from the database are shown to conserve space.

22 Engineering Economy, Sixteenth Edition Sullivan | Wicks | Koelling Copyright ©2015, 2012, 2009 by Pearson Education, Inc. All rights reserved. TABLE P6-6 Alternative Types of Cooling Towers for a 200-Megawatt Fossil-Fired Power Plant Operating at Full Capacity a in Problem 6-6

23 Engineering Economy, Sixteenth Edition Sullivan | Wicks | Koelling Copyright ©2015, 2012, 2009 by Pearson Education, Inc. All rights reserved. TABLE P6-26 Table for Problem 6-26

24 Engineering Economy, Sixteenth Edition Sullivan | Wicks | Koelling Copyright ©2015, 2012, 2009 by Pearson Education, Inc. All rights reserved. TABLE P6-31 Table for Problem 6-31

25 Engineering Economy, Sixteenth Edition Sullivan | Wicks | Koelling Copyright ©2015, 2012, 2009 by Pearson Education, Inc. All rights reserved. TABLE P6-48 Table for Problem 6-48

26 Engineering Economy, Sixteenth Edition Sullivan | Wicks | Koelling Copyright ©2015, 2012, 2009 by Pearson Education, Inc. All rights reserved. TABLE P6-82 Data for Problems 6-82 through 6- 85


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