Exam (elaborations)
Solution Manual of Engineering Economy 16th Edition By William G.SALLAVAN
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- Engineering Economy
- Institution
- Engineering Economy
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, Solutions to Chapter 1 ProblemsA Note To Instructors: Because of volatile energy prices in today's world, the instructor is encouraged to vary energy
prices in affected problems (e.g. the price of a gallon of gasoline) plus and minus 50 percent and ask students to
determine whether this range of prices changes the recommendation in the problem. This should make for stimulating in-
class discussion of the results.
1-1 Because each pound of CO2 has a penalty of $0.20,
Savings = (15 gallons $0.10/gallon) (8 lb)($0.20/lb) = $1.34
If Stan can drive his car for less than $1.34/8 = $0.1675 per mile, he should make the trip. The cost of
gasoline only for the trip is (8 miles 25 miles/gallon)($3.90/gallon) = $1.25, but other costs of driving,
such as insurance, maintenance, and depreciation, may also influence Stan’s decision. What is the cost
of an accident, should Stan have one during his weekly trip to purchase less expensive gasoline? If Stan
makes the trip weekly for a year, should this influence his decision?
1
© 2015 Pearson Education, Inc., Upper Saddle River, NJ. All rights reserved. This publication is protected by Copyright and written permission should be obtained from
the publisher prior to any prohibited reproduction, storage in a retrieval system, or transmission in any form or by any means, electronic, mechanical, photocopying,
recording, or likewise. For information regarding permission(s), write to: Rights and Permissions Department, Pearson Education, Inc., Upper Saddle River, NJ 07458.
, 1-2 Principle 1 would lead to numerous other means for launching payloads into space. For example, using
private U.S. or foreign firms are other viable options.
Principle 2 forces differences in costs and benefits of alternative launching methods to be identified and
measured.
Principle 3 establishes a consistent viewpoint to be utilized in the analysis of launching methods (e.g. the
perspective of the U.S. government).
Principle 4 reduces the costs and benefits identified by Principal 2 to a common unit of comparison,
expressed in dollars (or other monetary units).
Principal 5 ensures that no significant criteria in evaluating alternatives are overlooked.
Principle 6 identifies risks associated with each alternative-- including them in the analysis is of critical
importance.
Principal 7 allows the analyst to determine how a good (or poor) decision was made and why. This
should impact on subsequent decision making.
2
© 2015 Pearson Education, Inc., Upper Saddle River, NJ. All rights reserved. This publication is protected by Copyright and written permission should be obtained from
the publisher prior to any prohibited reproduction, storage in a retrieval system, or transmission in any form or by any means, electronic, mechanical, photocopying,
recording, or likewise. For information regarding permission(s), write to: Rights and Permissions Department, Pearson Education, Inc., Upper Saddle River, NJ 07458.
, 1-3 Cost per Watt-hour = $0.75/1.5 Watt-hours = $0.50 per Watt-hour
At a cost of $0.50 per Watt-hour, it would cost (1,000)($0.50 per Watt-hour) = $500 per kilo Watt-hour
for power from a single AAA battery. This is 5,000 times more costly than energy from your local
utility. No wonder we turn off our battery operated devices when we're not using them!
3
© 2015 Pearson Education, Inc., Upper Saddle River, NJ. All rights reserved. This publication is protected by Copyright and written permission should be obtained from
the publisher prior to any prohibited reproduction, storage in a retrieval system, or transmission in any form or by any means, electronic, mechanical, photocopying,
recording, or likewise. For information regarding permission(s), write to: Rights and Permissions Department, Pearson Education, Inc., Upper Saddle River, NJ 07458.
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