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(a) Perform a sensitivity analysis on the two parametersof

Engineering Economy (1) | 16th Edition | ISBN: 9780133439274 | Authors: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling ISBN: 9780133439274 207

Solution for problem 5 Chapter 18

Engineering Economy (1) | 16th Edition

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Engineering Economy (1) | 16th Edition | ISBN: 9780133439274 | Authors: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling

Engineering Economy (1) | 16th Edition

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Problem 5

(a) Perform a sensitivity analysis on the two parametersof M&O costs and number of households todetermine if alternative 3 remains the best economicchoice. Three estimates are made for eachparameter in Table 186. M&O costs may varyup (pessimistic) or down (optimistic) from themost likely estimates presented in the case statement.The estimated number of households(4980) is determined to be the pessimistic estimate.Growth of 2% up to 5% (optimistic) willtend to lower the monthly cost per household. (b) Consider the monthly cost per household for alternative4, the optimistic estimate. The number ofhouseholds is 5% above 4980, or 5230. What is thenumber of households that would have to be availablein order for this option to have exactly thesame monthly household cost as that for alternative3 at the optimistic estimate of 5230 households?

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Chapter 18, Problem 5 is Solved
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Textbook: Engineering Economy (1)
Edition: 16
Author: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
ISBN: 9780133439274

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(a) Perform a sensitivity analysis on the two parametersof