Engineering Economy 7th Edition by Leland Blank ,Anthony Tarquin

Exercise 61

Cardenas and Moreno Engineering is evaluating a very large flood control program for several southern U.S. cities. One component is a 4-year project for a special-purpose transport ship-crane for use in building permanent storm surge protection against hurricanes on the New Orleans coastline. The estimates are P = $300,000, S = 0, and n = 3 years. MACRS depreciation with a 3-year recovery is indicated. Gross income and operating expenses are estimated at $200,000 and $80,000, respectively, for each of 4 years. The CFAT is shown below. Calculate the AW values of the CFAT and EVA series. They should have the same value. The after-tax MARR is 9.75% and T e = 35%.