3360 unit 08 2014-i-01
Post on 07-Jul-2018
223 Views
Preview:
TRANSCRIPT
-
8/19/2019 3360 Unit 08 2014-I-01
1/21
ENGR 3360U Winter 2014
Unit 8
Picking the Best Choice
Dr. J. Michael Bennett, P. Eng., PMP,
UOIT,
Version 2014-I-01
-
8/19/2019 3360 Unit 08 2014-I-01
2/21
Unit 8 Picking the Best Choice
Change Record
2014--01 nitia! Creation
"e#t Re$erence Cha%ter 8
2014--18-2 &r' (')' Bennett* P'Eng'* P)P ENGR 3360U Eng Eco
-
8/19/2019 3360 Unit 08 2014-I-01
3/21
Unit 8 Picking the Best Choice
Co+rse ,+t!ine
1' Engineering Econoics
2' Genera! Econoics
1' )icroeconoics
2' )acroeconoics
3' )one. and the Bank o$Canada
3' Engineering Estiation
4' nterest and E/+ia!ence
' Present Worth na!.sis
6' nn+a! Cash !o
5' Rate o$ Ret+rn na!.sis
8' Picking the Best Choice
' ,ther Choosing "echni/+es
10' Uncertaint. and Risk
11' ncoe and &e%reciation
12' $ter-ta# Cash !os
13' Re%!aceent na!.sis
14' n$!ation1' )RR 7e!ection
16' P+!ic 7ector ss+es
15' What Engineering sho+!d kno
ao+t cco+nting
18' Persona! Econoics $or the
Engineer
2014--1 &r' (')' Bennett* P'Eng'* P)P ENGR 3360U Eng Eco8-3
-
8/19/2019 3360 Unit 08 2014-I-01
4/21
Unit 8 Picking the Best Choice
Unit 8 Road )a%
9 8'1 Gra%hica! techni/+es to is+a!i:e %ro!es
9 8'2 ncreenta! na!.sis $or +!ti%!ea!ternaties
2014--18-4 &r' (')' Bennett* P'Eng'* P)P ENGR 3360U Eng Eco
-
8/19/2019 3360 Unit 08 2014-I-01
5/21
Unit 8 Picking the Best Choice
8'1 Gra%hica! %%roach
9 When there are +!ti%!e a!ternaties* a conenienta. to +nderstand hat is ha%%ening is .
gra%hing;
-
8/19/2019 3360 Unit 08 2014-I-01
6/21
Unit 8 Picking the Best Choice
E#a%!e 8-1
"he eng soc is +i!ding a snack cart to raise
one.' "o sere 100 c+stoers %er ho+r
o+!d cost >10*310 and to sere 10*
>13*300' "he net ann+a! incoe $or the!oer ca%acit. is >3*300 and the higher*
>4*000' a$ter .ears the cart has no sa!age
a!+e' What interest rate sho+!d e +sed todecide?
2014--1 &r' (')' Bennett* P'Eng'* P)P ENGR 3360U Eng Eco8-6
-
8/19/2019 3360 Unit 08 2014-I-01
7/21
Unit 8 Picking the Best Choice
E#a%!e 8-1
9 "he $o!!oing e/+ations ho!d;
PW!o4 @ ->10*310 A >3*300P* i* D
PWhigh @ ->13*400 A >4000P* i* D
2014--18-5 &r' (')' Bennett* P'Eng'* P)P ENGR 3360U Eng Eco
-
8/19/2019 3360 Unit 08 2014-I-01
8/21
Unit 8 Picking the Best Choice
E#a%!e 8-1 Gra%h
9 "he gra%h o$ those e/+ations %reio+ss!ideD ers+s interest rate;
2014--18-8 &r' (')' Bennett* P'Eng'* P)P ENGR 3360U Eng Eco
-
8/19/2019 3360 Unit 08 2014-I-01
9/21
Unit 8 Picking the Best Choice
E#a%!e 8-1 Gra%h E#%!ained
9 "o a#ii:e the PW* the choice eteenthe a!ternaties is de$ined . here the
c+res intersect 4'3D'
-
8/19/2019 3360 Unit 08 2014-I-01
10/21
Unit 8 Picking the Best Choice
Choice "a!e
nterest Rate Best Choice
0 H i H 4'3 Iigh-ca%acit. cart
4'3 H i H 18 Jo-ca%acit. cart
18 H i &o nothing
2014--1 &r' (')' Bennett* P'Eng'* P)P ENGR 3360U Eng Eco8-10
-
8/19/2019 3360 Unit 08 2014-I-01
11/21
Unit 8 Picking the Best Choice
!ternaties
9 "he gra%h a%%roach $+rther enhances+nderstanding hen dea!ing ith ore
than to a!ternaties'
9 t ecoes iediate!. a%%arent hereeach a!ternatie %roides a!+e oer the
others'
9 EUC or EUW can a!so e +sed $or thegra%hs instead o$ PW'
2014--18-11 &r' (')' Bennett* P'Eng'* P)P ENGR 3360U Eng Eco
-
8/19/2019 3360 Unit 08 2014-I-01
12/21
Unit 8 Picking the Best Choice
E#a%!e 8'4
%ress+re esse! can e ade o+t o$ rass*stain!ess stee! or titani+' "he $irst cost and
e#%ected !i$e $or each are;
rass 77 "itani+
Cost 100K 15K 300K
Ji$e 4 10 2C @ $irstcost P* i * !i$eD
2014--1 &r' (')' Bennett* P'Eng'* P)P ENGR 3360U Eng Eco8-12
-
8/19/2019 3360 Unit 08 2014-I-01
13/21
Unit 8 Picking the Best Choice
E#a%!e 8-49 "he gra%hed res+!ts o$ e#a%!e 8-4;
2014--18-13 &r' (')' Bennett* P'Eng'* P)P ENGR 3360U Eng Eco
-
8/19/2019 3360 Unit 08 2014-I-01
14/21
Unit 8 Picking the Best Choice
Gra%h E#a%!e 8-4 E#%!ained
9 "he gra%h shos the RR $or each %air o$a!ternaties $ro highest to !oest initia! cost'
9 "he gra%h shos the rangesD here each
a!ternatie sho+!d e se!ected
nterest Rate Best Choice
0 H i H 6'3 "itani+
6'3 H i H 1'3 7tain!ess 7tee!
1'3 H i Brass
2014--18-14 &r' (')' Bennett* P'Eng'* P)P ENGR 3360U Eng Eco
-
8/19/2019 3360 Unit 08 2014-I-01
15/21
Unit 8 Picking the Best Choice
E#a%!e 8'6
Iere are +t+a!!. e#c!+sie a!ternaties* a!!ith 20 .ear !ies' Pre%are a choice ta!e'
B C & E
C,7" 4K 2K 6K 1K K
B 63 410 561 115 58
LRRC-D; 6K-4K@ 561-63DP* i* 20D
i @ 2
2014--1 &r' (')' Bennett* P'Eng'* P)P ENGR 3360U Eng Eco8-1
-
8/19/2019 3360 Unit 08 2014-I-01
16/21
Unit 8 Picking the Best Choice
Gra%hing* contd'
9 E#a%!e 8-6 gra%h shoing an. a!ternaties
2014--18-16 &r' (')' Bennett* P'Eng'* P)P ENGR 3360U Eng Eco
-
8/19/2019 3360 Unit 08 2014-I-01
17/21
Unit 8 Picking the Best Choice
E#a%!e 8-6 E#%!ained
9 "he gra%h c!ear!. shos in this case thata!ternaties & and E are neer %art o$ the
so!+tion'9 "he Mdo-nothing a!ternatie is a %ossii!it.
d+e to the %resent orth o$ a!! a!ternaties
going e!o 0 i$ )RR is aoe 20'
2014--18-15 &r' (')' Bennett* P'Eng'* P)P ENGR 3360U Eng Eco
i 8 i ki h Ch i
-
8/19/2019 3360 Unit 08 2014-I-01
18/21
Unit 8 Picking the Best Choice
Choice ta!e
$ )RR 20 do nothing
$ 20 )RR '6 se!ect B
$ '6 )RR 2 se!ect
$ 2 )RR se!ect C
2014--1 &r' (')' Bennett* P'Eng'* P)P ENGR 3360U Eng Eco8-18
U i 8 Pi ki h B Ch i
-
8/19/2019 3360 Unit 08 2014-I-01
19/21
Unit 8 Picking the Best Choice
8'2 E!eents o$ ncreenta! Rate o$ Ret+rn
1' Be s+re a!! the a!ternaties are identi$ied'2' Constr+ct an NPW or EUW gra%h
shoing a!! a!ternaties %!otted on the sae
a#es'3' E#aine the !ine o$ a#i+ a!+es and
deterine hich a!ternaties create it* and
oer hat range'
4' &eterine the changeoer %oints'
' Create a choice ta!e'
2014--18-1 &r' (')' Bennett* P'Eng'* P)P ENGR 3360U Eng Eco
U i 8 Pi ki h B Ch i
-
8/19/2019 3360 Unit 08 2014-I-01
20/21
Unit 8 Picking the Best Choice
7+ar.
9 na!.sis )ethods;
-
8/19/2019 3360 Unit 08 2014-I-01
21/21
Unit 8 Picking the Best Choice
7+ar.* contd'
9 Rate o$ Ret+rn ana!.sis eteen a!ternaties re/+iresincreenta! rate o$ ret+rn'
9 t ecoes ore co%!e# hen ore than to
a!ternaties are aai!a!e'9 Constr+cting gra%hs he!%s is+a!i:e and iediate!.
recogni:e the constraints o$ the a!ternaties'
9 Gra%hing a!!os one to see the range o$ a!+eshere each a!ternatie %roides the greatest a!+eand choices are a!+es'
2014 18 21 &r ( ) Bennett PEng P)P ENGR 3360U Eng Eco
top related