impregillo project- engneering economics and mangment

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CE 3361 NAME:____________________

PROJECT III DATE:_____________________

SHOW ALL WORK AND CALCULATIONS

DUE: 19 APRIL 2016

GROUP B: IMPREGILLO COMPANY

IN ORDER TO COMPARE THE BIDS BY CATERPILLER AND IMPREGILLO, KIEWIT HAS ASKED ITS STAFF TO CARRYOUT AN ECONOMIC STUDY BASED IN PRESENT WORTH, ANNUAL WORTH AND PAYBACK PERIOD ANALYSES. IT IS YOUR RESPONSIBILITY TO PERFORM THE ECONOMIC ANALYSIS ONLY ON YOUR ASSIGNED ALTERNATIVE: IN THIS CASE IMPREGILLO. USE THE TABLES PROVIDED IN THIS ASSIGNMENT. NO OTHER SUBMISSIONS WILL BE ACCEPTED. THE FOLLOWING COST/REVENUE SCHEDULE HAS BEEN DEVELOPED FOR THE IMPREGILLO OPTION BY OUR ACCOUNTANT:

IMPERGILLO

INITIAL $600,000

COST

DELIVERY $15,000

COST

OPERATION/ $3000/YR

MAINTANENCE

UPGRADE/ $1000 EVERY 2TH

PARTS YEAR

INSURANCE $600/YR

FIRST YEAR INCOME $120000/YR

INCOME INCREASE $20,000/YR

SALVAGE $120000

LIFE 4 YR

INTEREST

COST 2%/QUARTER CP MONTHLY

REVENUE 3%/YR

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CE 3361 NAME:____________________

PROJECT III DATE:_____________________

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1. PERFORM A PRESENT WORTH ECONOMIC ANALYSIS ON IMPREGILLO OPTION: FILL IN TABLES NEATLY

IMPREGILLO OPTION

PRESENT WORTH: PW i = 8.300%/YR

COST n = 0 TO 12 YEARS

ELEMENT	TIME	P/F	P/A	AMOUNT	SOURCE
-$600,000		1.0000		-$600.000	Eq.
-$ 15,000	0
-$600,000
-$ 15,000		0.72692		-$ 10,904	Eq.
-$600,000
-$ 15,000
-$ 1,000
-$ 1,000			-	-$ 727
-$ 1,000	6
-$ 1,000		0.52841
-$ 1,000
-$ 1,000			-
-$ 3,000		-
-$ 600	12	-
			TOTAL

TIME	(1 + i)n	1/(1 + i)n	(1 + i)n - 1	i ∙ (1 + i)n	P/F	P/A
2
4
6
8
10
12

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CE 3361 NAME:____________________

PROJECT III DATE:_____________________

SHOW ALL WORK AND CALCULATIONS

IMPREGILLO OPTION

PRESENT WORTH: PW i = 3%/YR

n = 4 TO 12 YEARS

REVENUE

ELEMENT	TIME	P/A	P/G	P/F	AMOUNT	SOURCE
$120,000	12		-		$1,194,480	TABLE 8
$ 20,000			51.2482
$120,000		-		0.8885
$120,000	8
$120,000
				TOTAL

DETERMINE NET PRESENT WORTH:

REVENUE:______________

COST: _______________

NET PW:_________________

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CE 3361 NAME:____________________

PROJECT III DATE:_____________________

SHOW ALL WORK AND CALCULATIONS

2. PERFORM AN ANNUALWORTH ECONOMIC ANALYSIS ON THE IMPREGILLO OPTION: FILL IN TABLES NEATLY

IMPREGILLO OPTION

ANNUAL WORTH: AW i = 8.300%/YR

COST n = 12 YEARS

ELEMENT	N	PW	A/P	AMOUNT	SOURCE
-$600,000	12	-$600,000		-$102,870	Eq.
-$ 15,000
-$600,000			0.17145
-$ 15,000	12	-$ 10,904			Eq.
-$600,000
-$ 15,000
-$ 1,000
-$ 1,000				-$ 125
-$ 1,000			0.17145
-$ 1,000
-$ 1,000
-$ 1,000
-$ 3,000				-$ 3000
-$ 600	12
			TOTAL

TIME	(1 + i)n	(1 + i)n – 1	i ∙ (1 + i)n	A/P
12

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CE 3361 NAME:____________________

PROJECT III DATE:_____________________

SHOW ALL WORK AND CALCULATIONS

IMPREGILLO OPTION

ANNUAL WORTH: AW i = 3%/YR

n = 12 YEARS

REVENUE

ELEMENT	n	PW	A/P	AMOUNT	SOURCE
$120,000	12			$120,000
$ 20,000					TABLE 8
$120,000			0.10046
$120,000	12
$120,000
			TOTAL

DETERMINE NET ANNUAL WORTH:

REVENUE:___________

COST:_______________

NET:_________________

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CE 3361 NAME:____________________

PROJECT III DATE:_____________________

SHOW ALL WORK AND CALCULATIONS

3. GIVEN THE FOLLOWING ANNUAL WORTH FOR ONE LIFE CYCLE. DETERMINE THE PAYBACK PERIOD OF THE IMPREGILLO OPTION FOR A 0% RATE OF RETURN:

IMPREGILLO OPTION

ANNUAL WORTH: AW i = 8.300%/YR

COST n = 4 YEARS

ELEMENT	n	AMOUNT	SOURCE
-$600,000	4	-$182,364	Eq.
-$ 15,000	4	-$ 4,559	Eq.
-$ 1,000	4	-$ 259	Eq.
-$ 1,000	4	-$ 221	Eq.
-$ 3,000	4	-$ 3,000	Eq.
-$ 600	4	-$ 600	Eq.

REVENUE i = 3%/YR

n = 4 YEARS

ELEMENT	n	AMOUNT	SOURCE
$120,000	4	$120,000	TABLE 8
$ 20,000	4	$ 29,261	TABLE 8
$120,000	4	$ 28,684	TABLE 8

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CE 3361 NAME:____________________

PROJECT III

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PAYBACK PERIOD CALCULATION: nP

SHOW CALCULATIONS

COST REVENUE

AW NCF

AWREVENUE = ___________

AWCOST = ___________

AW NET CASH FLOW = ___________

nP = ________________

DOES THE IMPREGILLO OPTION PAYBACK PERIOD EXCEED WITHIN

THE USEFUL LIFE OF DRILL: CHOOSE ALL CORRECT ANSWERS

YES NO

ONLY AFTER NOT IMPORTANT

SALVAGE

NAME _____________________________________

SIGNATURE:_______________________________

BY SIGNING THIS PAGE, I CERTIFY THAT I HAVE NOT GIVEN

OR RECEIVED HELP FROM ANY OTHER STUDENT

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CE 3361 NAME:____________________

PROJECT III

THE FOLLOWING STUDENTS ARE ASSIGNED THE IMPREGILLO ALTERNATIVE
IMPREGILLO ALTERNATIVE Alajmi, Faraj Alajmi, Nasher Alanazi, Bassam Aldossary, Husina Alenezi, Abdulwahab Alfakeeh, Ahmed
Alhajeri, Badar Alharbi, Suod Aljabal, Khaled Almakrami, Ali Almelihi, Abdulhadi Almershad, Abdalla Almutairi, Abdullah Almutiri, Ahmad Alotaibi, Abdulrahman
Alotaibi, Mohammad Alrashed, Abdullah Alsuhaibani, Eyas Alzaid, Abdulaziz Alzakeri, Ibrahim Broadway, Jason Erb, Conner Haider, Fajer Prasai, Arjun Shrestha, Kshitiz Suhluli, Abdulrahman White, Chris Walrath, Clinton