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    Assignment #1

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    The document contains multiple engineering economics and entrepreneurship assignment questions related to topics like determining if driving further for cheaper gas is worthwhile, comparing battery and utility energy costs, analyzing ethanol fuel blend savings, and evaluating alternatives for a machine to produce drill bits that considers costs, risks, and non-monetary factors.

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    Assignment #1

    Uploaded by

    babywei
    114 views2 pages
    The document contains multiple engineering economics and entrepreneurship assignment questions related to topics like determining if driving further for cheaper gas is worthwhile, comparing battery and utility energy costs, analyzing ethanol fuel blend savings, and evaluating alternatives for a machine to produce drill bits that considers costs, risks, and non-monetary factors.

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    Assignment 1

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    The document contains multiple engineering economics and entrepreneurship assignment questions related to topics like determining if driving further for cheaper gas is worthwhile, comparing battery and utility energy costs, analyzing ethanol fuel blend savings, and evaluating alternatives for a machine to produce drill bits that considers costs, risks, and non-monetary factors.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    114 views2 pages

    Assignment #1

    Uploaded by

    babywei
    The document contains multiple engineering economics and entrepreneurship assignment questions related to topics like determining if driving further for cheaper gas is worthwhile, comparing battery and utility energy costs, analyzing ethanol fuel blend savings, and evaluating alternatives for a machine to produce drill bits that considers costs, risks, and non-monetary factors.

    Copyright:

    © All Rights Reserved
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    Download as pdf or txt
    of 2

    GDB3023

    ENGINEERING ECONOMICS & ENTREPRENEURSHIP


    JANUARY 2021
    ASSIGNMENT #1 [CLO1]

    1-1 Stan Moneymaker needs 15 gallons of gasoline to top off his automobile’s
    gas tank. If he drives an extra eight miles (round trip) to a gas station on
    the outskirts of town, Stan can save $0.10 per gallon on the price of
    gasoline. Suppose gasoline costs $3.90 per gallon and Stan’s car gets 25
    mpg for in-town driving. Should Stan make the trip to get less expensive
    gasoline? Each mile that Stan drives creates one pound of carbon dioxide.
    Each pound of CO2 has a cost impact of $0.02 on the environment. What
    other factors (cost and otherwise) should Stan consider in his decision
    making?
    [10 marks]

    1-3 A typical discounted price of a AAA battery is $0.75. It is designed to


    provide 1.5 volts and 1.0 amps for about an hour. Now we multiply volts and
    amps to obtain power of 1.5 watts from the battery. Thus, it costs $0.75
    for 1.5 Watt-hours of energy. How much would it cost to deliver one kilo
    Watt-hour? How does this compare with the cost of energy from your local
    electric utility at $0.10 per kilo Watt-hour?
    [10 marks]

    1-5 Henry Ford’s Model T was originally designed and built to run on ethanol.
    Today, ethanol (190-proof alcohol) can be produced with domestic stills
    for about $0.85 per gallon. When blended with gasoline costing $4.00 per
    gallon, a 20% ethanol and 80% gasoline mixture costs $3.37 per gallon.
    Assume fuel consumption at 25 mpg and engine performance in general
    are not adversely affected with this 20–80 blend (called E20).
    [10 marks]

    (a.) How much money can be saved for 15,000 miles of driving per year?
    (b.) How much gasoline per year is being converted if one million people
    use the E20 fuel?
    1-12 During your first month as an employee at Greenfield Industries (a large
    drill-bit manufacturer), you are asked to evaluate alternatives for
    producing a newly designed drill bit on a turning machine. Your boss’
    memorandum to you has practically no information about what the
    alternatives are and what criteria should be used. The same task was posed
    to a previous employee who could not finish the analysis, but she has given
    you the following information: An old turning machine valued at $350,000
    exists (in the warehouse) that can be modified for the new drill bit. The
    in-house technicians have given an estimate of $40,000 to modify this
    machine, and they assure you that they will have the machine ready before
    the projected start date (although they have never done any modifications
    of this type). It is hoped that the old turning machine will be able to meet
    production requirements at full capacity. An outside company, McDonald
    Inc., made the machine seven years ago and can easily do the same
    modifications for $60,000. The cooling system used for this machine is not
    environmentally safe and would require some disposal costs. McDonald Inc.
    has offered to build a new turning machine with more environmental
    safeguards and higher capacity for a price of $450,000. McDonald Inc. has
    promised this machine before the startup date and is willing to pay any late
    costs. Your company has $100,000 set aside for the start-up of the new
    product line of drill bits. For this situation,
    (a.) Define the problem.
    (b.) List key assumptions.
    (c.) List alternatives facing Greenfield Industries.
    (d.) Select a criterion for evaluation of alternatives.
    (e.) Introduce risk into this situation.
    (f.) Discuss how nonmonetary considerations may impact the selection.
    (g.) Describe how a postaudit could be performed.
    [10 marks]

    1-20 A deep-water oil rig has just collapsed into the Gulf of Mexico. Its blowout-
    preventer system has failed, so thousands of barrels of crude oil each day
    are gushing into the ocean. List some alternatives for stopping the
    unchecked flow of oil into the Gulf.
    [10 marks]

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