Engineering Economics Problems

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(2.5 points) An investment of $5000 in an Infotech common stock proved to be very profitable.

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1. (2.5 points) An investment of $5000 in an Infotech common stock proved to be very profitable. At the end of 3 years the stock was sold for $30,000. What was the rate of return on investment? 2. (2.5 points) Horizon Wireless must rebuild a cell tower recently destroyed by a tornado. If made of normal steel, the tower will cost $40,000 to construct and should last 18 years. Maintenance will cost $1,000 per year. If corrosion resistant steel is used, the tower will cost $50,000 to build and the annual maintenance cost will be reduced to $200 per year. Determine the IRR of building the corrosion resistant tower. If Horizon requires a return of 10% on its capital projects, which tower should they build?
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Hello. Have a look at the final answer and get back to me. Thanks!!

Running Head: ENGINEERING ECONOMICS

Title: ENGINEERING ECONOMICS
Student's name:
Course title:

1

ENGINEERING ECONOMICS

2

Engineering Economics
1. What was the rate of return on investment?
P = $5,000
F = $30,000
n = 3 years
The formula for getting the future value is:
F = P (1+i)n
$3...


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