1. Engineering Economy, Sixteenth Edition Sullivan | Wicks | Koelling Copyright ©2015, 2012, 2009 by Pearson Education, Inc. All rights reserved. EXAMPLE 5-1 Evaluation of New Equipment Purchase Using PW continued on next slide

2. Engineering Economy, Sixteenth Edition Sullivan | Wicks | Koelling Copyright ©2015, 2012, 2009 by Pearson Education, Inc. All rights reserved. EXAMPLE 5-1 (continued) Evaluation of New Equipment Purchase Using PW

3. Engineering Economy, Sixteenth Edition Sullivan | Wicks | Koelling Copyright ©2015, 2012, 2009 by Pearson Education, Inc. All rights reserved. EXAMPLE 5-2 Present Worth of a Space-Heating System

4. Engineering Economy, Sixteenth Edition Sullivan | Wicks | Koelling Copyright ©2015, 2012, 2009 by Pearson Education, Inc. All rights reserved. EXAMPLE 5-3 Stan Moneymaker Wants to Buy a Bond

5. Engineering Economy, Sixteenth Edition Sullivan | Wicks | Koelling Copyright ©2015, 2012, 2009 by Pearson Education, Inc. All rights reserved. EXAMPLE 5-4 Current Price and Annual Yield of Bond Calculations

6. Engineering Economy, Sixteenth Edition Sullivan | Wicks | Koelling Copyright ©2015, 2012, 2009 by Pearson Education, Inc. All rights reserved. EXAMPLE 5-5 Determining the Capitalized Worth of a Bridge

7. Engineering Economy, Sixteenth Edition Sullivan | Wicks | Koelling Copyright ©2015, 2012, 2009 by Pearson Education, Inc. All rights reserved. EXAMPLE 5-6 The Relationship between FW and PW

8. Engineering Economy, Sixteenth Edition Sullivan | Wicks | Koelling Copyright ©2015, 2012, 2009 by Pearson Education, Inc. All rights reserved. EXAMPLE 5-7 Sensitivity Analysis Using FW (Example 5-2 Revisited)

9. Engineering Economy, Sixteenth Edition Sullivan | Wicks | Koelling Copyright ©2015, 2012, 2009 by Pearson Education, Inc. All rights reserved. EXAMPLE 5-8 Using AW to Evaluate the Purchase of New Equipment (Example 5-1 Revisited) continued on next slide

10. Engineering Economy, Sixteenth Edition Sullivan | Wicks | Koelling Copyright ©2015, 2012, 2009 by Pearson Education, Inc. All rights reserved. EXAMPLE 5-8 (continued) Using AW to Evaluate the Purchase of New Equipment (Example 5-1 Revisited)

11. Engineering Economy, Sixteenth Edition Sullivan | Wicks | Koelling Copyright ©2015, 2012, 2009 by Pearson Education, Inc. All rights reserved. EXAMPLE 5-9 Equivalent Uniform Annual Cost of a Corporate Jet

12. Engineering Economy, Sixteenth Edition Sullivan | Wicks | Koelling Copyright ©2015, 2012, 2009 by Pearson Education, Inc. All rights reserved. EXAMPLE 5-10 Determination of Annual Savings by Using the AW Method (Example 5-2 Revisited)

13. Engineering Economy, Sixteenth Edition Sullivan | Wicks | Koelling Copyright ©2015, 2012, 2009 by Pearson Education, Inc. All rights reserved. EXAMPLE 5-11 Avoid Getting Fleeced on an Auto Lease continued on next slide

14. Engineering Economy, Sixteenth Edition Sullivan | Wicks | Koelling Copyright ©2015, 2012, 2009 by Pearson Education, Inc. All rights reserved. EXAMPLE 5-11 (continued) Avoid Getting Fleeced on an Auto Lease

15. Engineering Economy, Sixteenth Edition Sullivan | Wicks | Koelling Copyright ©2015, 2012, 2009 by Pearson Education, Inc. All rights reserved. EXAMPLE 5-12 Economic Desirability of a Project Using the IRR Method continued on next slide

16. Engineering Economy, Sixteenth Edition Sullivan | Wicks | Koelling Copyright ©2015, 2012, 2009 by Pearson Education, Inc. All rights reserved. EXAMPLE 5-12 (continued) Economic Desirability of a Project Using the IRR Method continued on next slide

17. Engineering Economy, Sixteenth Edition Sullivan | Wicks | Koelling Copyright ©2015, 2012, 2009 by Pearson Education, Inc. All rights reserved. EXAMPLE 5-12 (continued) Economic Desirability of a Project Using the IRR Method

18. Engineering Economy, Sixteenth Edition Sullivan | Wicks | Koelling Copyright ©2015, 2012, 2009 by Pearson Education, Inc. All rights reserved. EXAMPLE 5-13 Evaluation of New Equipment Purchase, Using the Internal Rate of Return Method (Example 5-1 Revisited) continued on next slide

19. Engineering Economy, Sixteenth Edition Sullivan | Wicks | Koelling Copyright ©2015, 2012, 2009 by Pearson Education, Inc. All rights reserved. EXAMPLE 5-13 (continued) Evaluation of New Equipment Purchase, Using the Internal Rate of Return Method (Example 5-1 Revisited)

20. Engineering Economy, Sixteenth Edition Sullivan | Wicks | Koelling Copyright ©2015, 2012, 2009 by Pearson Education, Inc. All rights reserved. EXAMPLE 5-14 Do You Know What Your Effective Interest Rate Is? continued on next slide

21. Engineering Economy, Sixteenth Edition Sullivan | Wicks | Koelling Copyright ©2015, 2012, 2009 by Pearson Education, Inc. All rights reserved. EXAMPLE 5-14 (continued) Do You Know What Your Effective Interest Rate Is? continued on next slide

22. Engineering Economy, Sixteenth Edition Sullivan | Wicks | Koelling Copyright ©2015, 2012, 2009 by Pearson Education, Inc. All rights reserved. EXAMPLE 5-14 (continued) Do You Know What Your Effective Interest Rate Is?

23. Engineering Economy, Sixteenth Edition Sullivan | Wicks | Koelling Copyright ©2015, 2012, 2009 by Pearson Education, Inc. All rights reserved. EXAMPLE 5-15 Be Careful with “Fly-by-Night” Financing! continued on next slide

24. Engineering Economy, Sixteenth Edition Sullivan | Wicks | Koelling Copyright ©2015, 2012, 2009 by Pearson Education, Inc. All rights reserved. EXAMPLE 5-15 (continued) Be Careful with “Fly- by-Night” Financing! continued on next slide

25. Engineering Economy, Sixteenth Edition Sullivan | Wicks | Koelling Copyright ©2015, 2012, 2009 by Pearson Education, Inc. All rights reserved. EXAMPLE 5-15 (continued) Be Careful with “Fly- by-Night” Financing!

26. Engineering Economy, Sixteenth Edition Sullivan | Wicks | Koelling Copyright ©2015, 2012, 2009 by Pearson Education, Inc. All rights reserved. EXAMPLE 5-16 Effective Interest Rate for Purchase of New Aircraft Equipment continued on next slide

27. Engineering Economy, Sixteenth Edition Sullivan | Wicks | Koelling Copyright ©2015, 2012, 2009 by Pearson Education, Inc. All rights reserved. EXAMPLE 5-16 (continued) Effective Interest Rate for Purchase of New Aircraft Equipment

28. Engineering Economy, Sixteenth Edition Sullivan | Wicks | Koelling Copyright ©2015, 2012, 2009 by Pearson Education, Inc. All rights reserved. EXAMPLE 5-17 Calculation of the ERR

29. Engineering Economy, Sixteenth Edition Sullivan | Wicks | Koelling Copyright ©2015, 2012, 2009 by Pearson Education, Inc. All rights reserved. EXAMPLE 5-18 Determining the Acceptability of a Project, Using ERR

30. Engineering Economy, Sixteenth Edition Sullivan | Wicks | Koelling Copyright ©2015, 2012, 2009 by Pearson Education, Inc. All rights reserved. EXAMPLE 5-19 Determining the Simple Payback Period

31. Engineering Economy, Sixteenth Edition Sullivan | Wicks | Koelling Copyright ©2015, 2012, 2009 by Pearson Education, Inc. All rights reserved. EXAMPLE 5-A-1 continued on next slide

32. Engineering Economy, Sixteenth Edition Sullivan | Wicks | Koelling Copyright ©2015, 2012, 2009 by Pearson Education, Inc. All rights reserved. EXAMPLE 5-A-1 (continued) continued on next slide

33. Engineering Economy, Sixteenth Edition Sullivan | Wicks | Koelling Copyright ©2015, 2012, 2009 by Pearson Education, Inc. All rights reserved. EXAMPLE 5-A-1 (continued)

34. Engineering Economy, Sixteenth Edition Sullivan | Wicks | Koelling Copyright ©2015, 2012, 2009 by Pearson Education, Inc. All rights reserved. EXAMPLE 5-A-2 continued on next slide

35. Engineering Economy, Sixteenth Edition Sullivan | Wicks | Koelling Copyright ©2015, 2012, 2009 by Pearson Education, Inc. All rights reserved. EXAMPLE 5-A-2 (continued)