Modifying an assembly line has a first cost of$80,000, and

Engineering Economic Analysis | 12th Edition | ISBN: 9780199339358 | Authors: Donald G Newnan

Problem 10-17 Chapter 10

Engineering Economic Analysis | 12th Edition

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Engineering Economic Analysis | 12th Edition | ISBN: 9780199339358 | Authors: Donald G Newnan

Engineering Economic Analysis | 12th Edition

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Problem 10-17

Modifying an assembly line has a first cost of$80,000, and its salvage value is $0. The firmsinterest rate is 9%. The savings shown in the tabledepend on whether the assembly line runs one, two,or three shifts, and on whether the product is madefor 3 or 5 years.Shifts/ Savings/Useful Lifedayear Probability (years) Probability1 $15,000 0.3 3 0.62 30,000 0.5 5 0.43 45,000 0.2 (a)Give the joint probability distribution for sav-ings per year and the useful life.(b)Define optimistic, most likely, and pessimisticscenarios by using both optimistic, both mostlikely, and both pessimistic estimates. Use a lifeof 4 years as the most likely value. What is thepresent worth for each scenario?

Step-by-Step Solution:
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STAT 2004 WEEK 5  A bar plot is used to summarize categorical variables. PROBABILITY The proportion of times an outcome would occur if repeated infinitely many times.  Sample space- Represents possible outcomes.  Law of Large Numbers- As the number of trials increases, the estimate goes closer to the true probability. In other words,...

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Chapter 10, Problem 10-17 is Solved
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Textbook: Engineering Economic Analysis
Edition: 12
Author: Donald G Newnan
ISBN: 9780199339358

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