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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 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 Slide 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 Slide 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 Slide 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 Slide 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 Slide 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 Slide 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) Slide 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 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) Slide 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 Slide 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) Slide 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 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 Slide 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 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 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 Slide 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 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) Slide 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 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 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? Slide 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 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 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! Slide 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 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 Slide 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 Slide 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 Slide 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 Slide 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 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 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) Slide 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 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)