Basics of Engineering Economy 2nd Edition by Anthony Tarquin,Leland Blank

Exercise 4

A small consulting engineering company bought an office building for $900,000. The company has ten engineers and eight support staff. Monthly expenses for salaries, utilities, grounds mainte­nance, etc. are $1.1 million. If the average billing rate per engineer is $90 per hour, how many hours per month must be billed in order for the company to make a profit of $15,000 per month Use an interest rate of 1% per month and assume the building will have a market value of $1.5 million after 10 years.