Engineering Economy 17th Edition Sullivan Solutions Manual Full Chapter PDF

Engineering Economy 17th Edition
Sullivan Solutions Manual

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Solutions to Chapter 8 Problems
A Note To Instructors: Because of volatile energy prices in today's world, the instructor is encouraged to vary energy
prices in affected problems (e.g. the price of a gallon of gasoline) plus and minus 50 percent and ask students to
determine whether this range of prices changes the recommendation in the problem. This should make for stimulating in-
class discussion of the results.
8-1. The basic question is this: “Is the extra $800 in investment cost justified by the annual energy savings of
$100 per year for 10 years?” We assume that the real cost of energy does not inflate during the 10-year
life (study period) of the system. Also assume that the residual value of the system is negligible after 10
years. The IRR of the difference between the two systems is:
0 = -$800 + $100 (P/A, i’%, 10)
By trial and error (or Excel), we see that i’% = 4.3% > 2% so the more expensive system is cost
justified.
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8-2 F15 = $1,000,000
Purchasing equivalent in today’s spending power:
= $1,000,000(P/F, 5%, 7)(P/F, 8%, 8)
= $1,000,000(0.7107)(0.5403)
= $383,991
8-3 The average rate of inflation is 10% per year, and the market place interest rate is
5% + 10% + (5%)(10%) = 15.5% per year.
PW2 = ($1,000)
1  ( P / F ,15.5%,23)( F / P,10%,23) = $12,262.36
0.155  0.10
PW0 = $12,262.36 (P/F, 15.5%, 2) = $9,192.
8-4 The future worth of their 30 year investment plan is:
F = $16,000 (F/A, 6%, 30)
= $16,000 (79.0582)
= $1,264,931
The purchasing power in today’s dollars of their savings plan is:
P = $1,264,931 (P/F, 2%, 30)
= $1,264,931 (0.5521)
= $698,369
No, they will not be able to meet their savings expectation.
8-5 This problem can be solved with the following table (PW = Present Worth).
Year Annual Tuition (A$) PW Factor (P/F, i%, N) PW of Tuition

Freshman (N=1) $12,000 (P/F, 4%, 1) $11,538
Sophomore (N=2) $12,000 (F/P,10%,1) = $13,200 (P/F, 4%,2) $12,205
Junior (N =3) $13,200 (F/P,12%,1) = $14,784 (P/F, 6%, 1)(P/F,4%,2) $12,896
Senior (N=4) $14,784 (F/P, 8%, 1) = $15,967 (P/F, 6%, 2)(P/F,4%,2) $13,139
Total PW = $49,778
Your parents would need to deposit $49,778 at the start of your senior year in high school. Notice this is
for tuition only!
8-6 f = 4% per year; ir = 8% per year; b = 0
Alternative A: Estimates are in actual dollars, so the combined (market) interest rate must be used to
compute the present worth (PW).
im = ir + f + (ir)(f) = 0.08 + 0.04 + (0.08)(0.04) = 0.1232 or 12.32% per year
PW(12.32%) = − $120,000(P/F,12.32%,1) − $132,000(P/F,12.32%,2)
− $148,000(P/F,12.32%,3) − $160,000(P/F,12.32%,4)
= − $120,000(0.8903) − $132,000(0.7927) − $148,000(0.7057) − $160,000(0.6283)
= − $416,444
Alternative B: Estimates are in real dollars, so the real interest rate must be used to compute the present
worth (PW).
PW(9%) = − $100,000(P/A,8%,4) − $10,000(P/G,8%,4)

= − $100,000(3.3121) − $10,000(4.650)
= − $377,710
Alternative B has the least negative equivalent worth in the base time period (a PW value in this case
since b = 0).
8-7 (a) $6.58 = $50(F/P, i′, 50), or i′ = −3.97% (annual average loss in purchasing power)
(b) $1,952 = $50(F/P, i*, 50), or i* = 7.6% (which is the market interest rate). The real rate earned on
the investment in stocks is (7.6% − 3.97%)/1.0397 = 3.5%.
8-8 Use Equation (8-4)
0.14 = 0.025 + ir + 0.025 ir
0.115 = ir (1 + 0.025)
ir = 0.1122 or 11.22%
8-9 The engineer's salary has increased by 6.47%, 7.18%, and 6.96% in years 2, 3, and 4, respectively.
These are annual rates of change. By using Equation 8-1, but with each year's general price inflation
taken into account separately, the R$ equivalents in year 0 dollars are calculated as follows.
EOY Salary (R$ in Year 0)

1 $34,000 (P/F,2.4%,1) = $ 33,203
2 $36,200 (P/F,2.4%,1)(P/F,1.9%,1) = 34,692
3 $38,800 (P/F,2.4%,1)(P/F,1.9%,1)(P/F,3.3%,1) = 35,996
4 $41,500 (P/F,2.4%,1)(P/F,1.9%,1)(P/F,3.3%,1)(P/F,3.4%,1) = 37,235
Note: Time reference is the beginning of the first year. For ease of computation, it is assumed that the
salary is received at the end of the year.
8-10 Tennessee index-adjusted salary = (95/132) × $70,000 = $50,379 per year
Tennessee actual salary = (1.00 − 0.11) × $70,000 = $62,300 per year
“Savings” = $62,300 − $50,379 = $11,921 per year
FW(10%) = $11,921(F/A, 10%, 5) = $72,779. Paul is not penalized at all!
(0)
8-11 R$ 10 = $400M(1.65) = $660M
A$10 = $920M = $660M(1+f)10
1.394 = (1+f)10
f= 10
1.394 − 1 = 0.0338 or 3.38%
8-12 After-tax nominal return per year = 6% (1 – 0.33) = 4%
Approximate real return per year = 4% − 3% = 1% each year.
F (in today’s purchasing power) = $100,000(F/P, 1%, 10) = $110,460
8-13 F = $100,000(F/P, 10%, 10) = $259,370 Taxable Earnings = $159,370
After-tax F = $159,370(1 – 0.33) + $100,000 = $206,778
F (in today’s purchasing power) = $206,778 (P/F, 3%, 10) = $153,864
Your younger brother is ahead by about $43,400 with his concern over performance (total return) rather
than risk avoidance (safety).
8-14 Unit cost (8 years ago) = $89 / ft2 SB = 80,000 ft2
X = 0.92 SA = 125,000 ft2
eC = 5.4% per year im = MARRc = 12% per year
eAE = 5.66% per year f = 7.69% per year
(a) Using the power sizing technique (exponential cost estimating model) from Section 3.4.1, with an
adjustment for the price increase in construction costs, we have:
X
S 
CA = CB  A  (1 + eC)8
 SB 
0.92
 125,000
= ($89/ft2)(80,000 ft2)   (1.054)8
 80,000 
= $16,350,060
Total Capital Investment = $16,350,060 (1 + 0.05 + 0.042 + 0.08 + 0.31)

= $24,230,790
(b) Note: The building is not being sold at the end of the 10 years. Therefore, working capital is not
considered to be recovered at that time.
PW(12%) = −$24,230,790 – ($5)(125,000 ft2)

1  ( P / F ,12%,10)( F / P,5.66%,10)
0.12  0.0566
625,000(0.4416)
= −$24,230,790 –
0.0634
= −$28,584,102
0.12 - 0.0769
(c) ir   0.04 or 4% per year
1.0769
Assuming the base year to be the present (b = 0), we have:
AW(4%) = −$28,584,102 (A/P,4%,10) = −$3,524,420
8-15 ($100/bbl.)[(1.025)(1.05)]5 = $144.40/bbl.
8-16 We can equate future worth's in 20 years. The FW of her savings plan will be P(1.05)20 and the FW
of the $400,000 if it were to inflate at 7% per year is $400,000(1.07)20. P is what we are trying to
determine. So we can equate these two amounts as follows:
P(1.05)20 = $400,000(1.07)20 or P = $400,000(1.07 / 1.05)20.
This equals $400,000(1.01905)20 = $583,377. She must now put away more than $400,000 because
inflation each year is greater than the interest rate on her savings account. This demonstrates the
injurious effect of high inflation in an economy.
8-17 The value of ir is desired to match the R$ of $50,000 per year.
ir = (0.08 - 0.03) / (1 + 0.03) = 0.0485 (4.85%).
To determine the amount of life insurance to guarantee $50,000 (R-dollars) per year, we need to find the
capitalized worth (CW) of this annuity:
CW = $50,000 / 0.0485 = $1,030,928.
So Alfred needs $1,030,928 worth of life insurance.
8-18 (a) Lump sum interest in 2014 = ($2.4 billion/5)(F/A, 10%, 5) – 2.4 billion
= $530,448,000
0.91
 200,000 
(b) C2009 = ($2.4 billion)   = $3.12 billion
 150,000 
(c) C2019 = ($3.12 billion)(F/P, 9.2%, 10) = $7.52 billion
8-19 (a) R$28 = $690(P/F, 3.2%, 28) = $285.64
(b) $850 = $690(1.032)N; N = 6.62 years
(c) $285.56 = $850(1 + ir)28; ir = −3.82%

This was not a good investment to have made in January of 1980.
8-20 (a) Cost in year 2024 = $15,000 (F/P,8%,15) = $57,100
Cost in year 2025 = $61,668
Cost in year 2026 = $66,601
Cost in year 2027 = $71,929
Total (un−discounted dollars) = $257,298
(b) Ieff = (1.005)12 – 1 = 0.0617 or 6.17%
P2024 = $57,100 + $61,668[1 – (P/F,6.17%,3)(F/P,8%,3)]/(0.0617 – 0.08) = $234,373
A = $234,373 (A/P,0.5%,156 months) = $234,373 (0.00925) = $2,168 per month
8-21 (a) R$ = $7.50(1.018)22 = $11.10 per thousand cubic feet
(b) A$ = $7.50(1.032)22 = $22.20 per thousand cubic feet
8-22 (a) From Equation (8-1), we see that real dollars as of year k = 0 (today) is $1,107,706(P/F, 3%, 60) =
$187,978 which is still a tidy sum of purchasing power.
(b) When f = 2% per year, we have R$0 = $1,107,706(P/F, 2%, 60) = $337,629. The impact of
inflation is clear when you compare the results of Parts (a) and (b).
 2,400 ft 2 
8-23 (a) Cost in 10 years = ($3.75/lb)(400 lb) (1.085)10 = $3,700
2 
 2,200 ft 
(b) Left to student.
8-24 Escalation in savings is 0.5% per year (f) and the interest rate is 6% per year. By using Equation 4-30, we
can calculate the present value at time zero (now):
P = ($5,000 [1- (P/F, 6%, 35)(F/P, 0.5%, 35)]) / (0.06 – 0.005)
= ($5,000 [1- (0.1301)(1.1907)]) / (0.055)
= $76,827
Then F (future equivalent) is $76,827 (F/P, 6%, 35) = $590,502
Students often ask about the following situation. IF the rate of inflation in the economy averages 3% per
year, the spending power of F in today’s dollars (year 0) is how much?
P’ = $590,502 (P/F, 3%, 35)
= $590,502 (0.3554)
=$209,864
8-25 Based on Equation (4-28), we have
[1  (0.0668)(3.2620)]
PW = $2.5 billion = $48.88 billion and AW = $3.67 billion.
0.07  0.03
With inflation considered in this problem, the taxpayers can afford to increase the subsidy for the F-T
technology.
8-26 (a) The tuition for 2017 is calculated as follows:
F2017 = $5,000 (1.13)(1.046)(1.06)2(1.09)2(1.12)(1.08)(1.06)(1.056) = $10,682
(b) The annual compounded rate of increase during this 10 year period of time is
$10,682 = $5,000 (F/P, i’, 10)
Or i% = 7.89% per year
8-27 ir = 10.05% per year; f = 4.5% per year; f = ej = 5.7% per year
im = 0.1005 + 0.045 + (0.1005)(0.045) = 0.15 or 15% per year
ej’ = (0.15  0.057) / 1.057 = 0.0880 or 8.8% per year
MV7 = (0.10)($950,000) = $95,000
PW(15%) = $950,000  $92,600(P/A, 8.8%, 7) + $95,000(P/F, 15%, 7) = $1,383,484
Annual Revenue = $1,383,484 (A/P, 15%, 7) = $332,590
8-28 MVA = 25,000 (1.055)6 = $34,471.07
MVB = 40,000 (1.055)8 = $61,387.46
PWA = -150,000 + 34,000 (P/A, 15, 6) – 500 (P/G,15,6) + 34,471.07 (P/F, 15, 6)
= -150,000 + 34,000 (3.7845) – 500 (7.937) + 34,471.07 (0.423)
= -10,393.66
AWA = PWA (A/P, 15, 6)
= PWA (0.2642)
= -$2,746.00
PWB = -240,000 + 44,000 (P/A, 15, 8) + 61,387.46 (P/F, 15, 8)
= -240,000 + 44,000 (4.4873) + 61,387.46 (0.3269)
= -22,491.24
AWB = PWB (A/P, 15, 8)
= PWB (0.2229)
= -$5,013.30
Select A
$20(F/P, 22.5%, N)
8-29  5. One approach would be to find the minimum value of N by trial and error.
$10(F/P, 13.1%, N)
At N = 12 years, the cost of an RA dose is $228.38 and the cost of a diabetes inhaler use is $43.81. The
ratio of RA to diabetes is 5.21, so N = 12 years wil “git ‘er done.”
8-30 Option 1: Software with 3 year upgrade agreement.
(A) (B) Taxable Cash Flow

Year BTCF Depreci− Income: for ATCF
(A$) ation C=A+B Income (A$)
Taxes A+D
D = −t(C)
0 −$X −−− −−− −−− −$X
1 0 $X/3 −$X/3 $0.1133X $0.1133X
2 0 $X/3 −$X/3 $0.1133X $0.1133X
3 0 $X/3 −$X/3 $0.1133X $0.1133X
PW1(20%) = −$X + $0.1133X(P/A,20%,3)
(A) (B) Taxable Cash Flow

Year BTCF Depreci− Income: for ATCF
(A$) ation C=A+B Income (A$)
Taxes A+D
D = −t(C)
1 −$20,000 −−− − $20,000 $6,800 −$13,200
2 − 22,000 −−− − 22,000 7,480 − 14,520
3 − 24,200 −−− − 24,200 8,228 − 15,972
PW2(20%) = −$13,200(P/F,20%,1) − $14,520(P/F,20%,2) − $15,972(P/F,20%,3)

= −$30,326
Set PW1 = PW2 and solve for X.
−$X + $0.1133X(P/A,20%,3) = −$30,326
−$0.761X = −$30,326
X = $39,836
Therefore, $39,836 could be spent for software with a 3 year upgrade agreement (i.e., Option 1).
8-31 The annual capital recovery cost of the autoclave is:
CR (8%) = $180,000 (A/P, 8%, 8) - $18,000 (A/F, 8%, 8)

= $31,320 - $1,692
= $29,628
The annual equivalent revenue, based on Equation 4-30, can be determined as follows in two steps:
PW of revenue = $60,000 [1- (P/F, 8%,8)(F/P, 5%,8)] / (0.08 - 0.05)

= $60,000 [1- (0.5403)(1.4775)] / 0.03
= $403,414
and the equivalent annual revenue equals $403,400 (A/P, 8%, 8) = $70,194.
The net equivalent annual worth is $70,194 - $29,628 = $40,566.
Finally, the equivalent annual worth per hour of utilization is $40,566 per year / 2,000 hours per year =
$20.28 per hour. This is the expected profit per hour of utilization of the autoclave.
8-32 In 2009 there was parity between the U.S. dollar and the Real. But in 2014 one Real is worth $0.50
U.S., so the investment is now worth $50 million and the bank has suffered a major loss. Conventional
wisdom would be to cut the losses instead of chasing bad money with good money (i.e. sell out).
8-33 (a) In two years: $1 (1.026)2 = 6.4X
or, $1 = 6.4X / (1.026)2 = 6.08 units of X.
(b) In three years: $1 = (6.4X) (1.026)3
= 6.91 units of X.
8-34 (a) The value of 0.5 pound Sterling is 90 cents, so 5 cents can be saved on each item purchased in U.S.
dollars.
(b) 100,000 items × $0.05 = $5,000 can be saved by purchasing in the U.S.
8-35 iUS = 26% per year
(a) fe = 8% per year
ifm = 0.26 + 0.08 + (0.26)(0.08) = 0.3608, or 36.08% per year
(IRR on project in Country A currency)
(b) fe = −6% per year
ifm = 0.26 + (− 0.06) + (0.26)(− 0.06) = 0.1844, or 18.44% per year
(IRR on project in Country B currency)
8-36 Left to student.
8-37 (a)
Exchange
NCF Rate NCF
EOY (T−marks) (T−marks/$) ($) PW(18%)
0 −$3,600,000 20.000 −$180,000 − $180,000
1 450,000 22.400 20,089 17,025
2 1,500,000 25.088 59,790 42,941
3 1,500,000 28.099 53,383 32,489
4 1,500,000 31.470 47,664 24,585
5 1,500,000 35.247 42,557 18,602
6 1,500,000 39.476 37,998 14,074
7 1,500,000 44.214 33,926 10,649
PW (18%) = − $19,635
Project is not economically acceptable.

(b) IRRfm in terms of T−marks:
PW(i'%) = −3,600,000 + 450,000 (P/F, i'%, 1)
+ 1,500,000 (P/A, i'%, 6) (P/F, i'%, 1)
By linear interpolation, i'% = IRRfm = 0.2798, or 28.0% per year.

(c) From Equation 8-7, we have:
IRR fm - f e 0.28 - 0.12
(IRR)US = = = 0.1429, or 14.29% < 18%
1+ fe 1.12
Note: This confirms our recommendation in part (a).
8-38 100 euros × $1.24 = $124. The cost in U.S. dollars is $124 + $40 = $164. Sanjay may think he is
paying too much for the jewelry, but he goes ahead with the purchase anyway. He could have converted
his 100 euros into U.S. dollars, but there is a 7.5 euro commission on the transaction. Or he could have
kept his 100 euros for the next trip he makes to Europe and simply charge the purchase to his credit
card.
8-39 ifm = 20% per year; fe = −2.2% per year
Current exchange rate = $1 per 92 Z−Krons
0.20 - (-0.022)
i US  = 22.7%
1 - 0.022
PW(22.7%) = −$168,000,000 − $32,000,000(P/F,22.7%,1)
+ $69,000,000(P/A,22.7%,9)(P/F,22.7%,1)
= −$168,000,000 − $32,000,000(0.8150) + $69,000,000(3.7065)(0.8150)
= $14,355,028 > 0
Yes, this project will meet the company's economic decision criteria.
8-40 (a)
(A) (B) (C) (D) (E) (F) (G)

Year BTCF Adjustment BTCF Lease Taxable Cash ATCF
(R$) (1.10)Year (A$) Payment Income: Flow for (A$)
(A$) (C) – (D) Income C−D+F
Taxes
−t(E)
1 − $4,000 1.100 −$4,400 $80,000 $84,000 $33,760 −$50,640
2 − 4,000 1.210 − 4,840 60,000 − 64,840 25,936 − 38,904
3 − 4,000 1.331 − 5,324 50,000 − 55,324 22,130 − 33,194
4 − 4,000 1.464 − 5,856 50,000 − 55,856 22,342 − 33,514
5 − 4,000 1.611 − 6,442 50,000 − 56,442 22,577 − 33,865
6 − 4,000 1.772 − 7,086 50,000 − 57,086 22,834 −34,252
0 0 0
(b) im = (1.05)(1.09524) – 1 = 0.15 = 15% per year
PW = −$50,640(P/F,15%,1) − $38,904(P/F,15%,2) − $33,194(P/F,15%,3)

− $33,514(P/F,15%,4) − $33,865(P/F,15%,5) − $34,252(P/F,15%,6)
= −$146,084
EUAC = $146,084(A/P,15%,6) = $38,595
8-41 Demand = 500 million BTU/year; Efficiency = 80%, N = 12 years
f = 10% per year; b = 0
MARR = im = 18% per year
 500 million Btu   1,000 ft of gas

3
Annual gas demand =    = 625,000 ft3 of gas
 0.8   million Btu 
$7.50(1.1) $8.25
A1 = 3
=
1000 ft 1000 ft 3
 $8.25  1  (P / F,18%,12)(F / P,10%,12)]

PW(18%) = − (625,000 ft3)  3 
 1000 ft  0.18  0.10
 $8.25 
= − (625,000 ft3)  3 
(7.1176)
 1000 ft 
= −$36,700
8-42 (a) Cost of compressor replacement at EOY 8 (A$) = $500(1 + 0.06)8 = $797
Annual maintenance expense: A1(A$) = $100 (1.06) = $106
Annual electricity expense: A1(A$) = $680(1.10) = $748
PW(15%) = −$2,500 − $797 (P/F,15%,8)

−$106 1  ( P / F ,15%,15)( F / P,6%,15)
0.15  0.06
−$748 1  ( P / F ,15%,15)( F / P,10%,15)
0.15  0.10
= $2,500 − $797 (0.3269) − $106(0.70546) − $748(0.48662)
0.09 0.05
= −$10,871
A$: AW(15%) = −$10.871(A/P,15%,15) = −$1,859
(b) ir = 0.15  0.06 = 0.085or 8.5% per year

1.06
= −$10,871 (0.1204) = −$1,309
8-43 dk = ($150,000−0)/3 = $50,000
(A) (B) (C) (D) (E) (F) (G)

Year Revenues Expenses BTCF Depreci− Taxable Cash ATCF
(A$) (A$) (A$) ation Income: Flow for (A$)
A+B C−D Income C+F
Taxes
−t(E)
0 −$150,000 −$150,000 −−− −−− −−− −$150,000
1 $84,000 −21,800 62,200 $50,000 $12,200 −$6,100 56,100
2 88,200 −23,762 64,438 50,000 14,438 −7,219 57,219
3 92,610 −25,900 66,709 50,000 16,709 −8,355 58,354
For discounting purposes, im = 26% would be used since the ATCFs are expressed in actual dollars.
8-44 Annual revenues in year k (A$) = $360,000(1.025)k
Annual expenses in year k (A$) = −$239,000(1.056)k
(a) The values in the following table are expressed in A$.
Annual Annual ATCF

EOY Revenues Expenses BTCF Depr TI T(39%) (A$)
0 −$220,000 −−− −−− −−− −$220,000
1 $369,000 − $252,384 116,616 $44,000 $72,616 − $28,320 88,296
2 378,225 − 266,518 111,707 70,400 41,307 − 16,110 95,597
3 387,681 − 281,442 106,239 42,240 63,999 − 24,960 81,279
4 397,373 − 297,203 100,170 25,344 74,826 − 29,182 70,988
5 407,307 − 313,847 93,460 25,344 68,116 − 26,565 66,895
6 417,490 − 331,422 86,068 12,672 73,396 − 28,624 57,444
6 40,000 −−− 40,000 − 15,600 24,400
6
PW(10%) =  ATCF (P/F,10%,k) = $136,557
k=0
k
Total investment that can be afforded (including new equipment) =

$136,557 + $220,000 = $356,557
(b) ATCFk (R$) = ATCFk (A$)(P/F,4.9%,k)
ATCFk ATCFk
Year, (A$) (P/F,4.9%,k) (R$)
k
0 − $220,000 1.0000 − $220,000
1 88,296 0.9533 84,173
2 95,597 0.9088 86,879
3 81,279 0.8663 70,412
4 70,988 0.8258 58,622
5 66,895 0.7873 52,666
6 57,444 0.7505 43,112
6 24,400 0.7505 18,312
8-45 Purchase (A$ Analysis):
Oper., Ins. &
Investment / Other Expenses Maintenance
EOY Market (O,I,OE) Expense BTCF
Value
0 − $600,000 − $600,000
1 − $27,560b − $34,880c − 62,440
2 − 29,214 − 38,019 − 67,233
3 − 30,966 − 41,441 − 72,407
4 − 32,824 − 45,171 − 77,995
5 − 34,794 − 49,236 − 84,030
6 − 36,881 − 53,667 − 90,549
6 101,355a 101,355
ATCF
EOY BTCF Deprd TI T(34%) (A$)
0 − $600,000 − $600,000
1 − 62,440 $120,000 − $182,440 $62,030 − 410
2 − 67,233 192,000 − 259,233 88,139 20,906
3 − 72,407 115,200 − 187,607 63,786 − 8,621
4 − 77,995 69,120 − 147,115 50,019 − 27,976
5 − 84,030 69,120 − 153,150 52,071 − 31,959
6 − 90,549 34,560 − 125,108 42,537 − 48,012
6 101,355 101,355 − 34,461 66,894
Notes:
a
(MV)6 = $90,000 (1.02)6 = $101,355
b
(O,I,OE)k = $26,000 (1.06)k
c
(Maint)k = $32,000 (1.09)k
d
Cost Basis = $600,000
im = 0.13208 + 0.06 + (0.13208)(0.06) = 0.20, or 20% per year

6
FW6 (A$) =  ATCF (F/P, 20%, 6 − k) = − $1,823,920
k=0
k
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down to theirs. We will remove all restrictions from international
trade, as we have removed all restrictions from inter-State trade,
whenever they will raise their labor and their conditions to our
standard.
Men of Georgia, upon this great industrial question there should
be no North nor South. To us of every section have been entrusted
the interests of our country—our whole country. To others have been
confided the care of other nations and other people. We will not
interfere with them; we bid them not interfere with us. My fellow-
citizens, in this conflict, influenced by patriotism, national interest,
and national pride, let us be Americans.
Speech of Hon. Chauncey M. Depew.
Presenting President Harrison for Re-nomination at the

Minneapolis Convention, June 9, 1892.
Mr. President and Gentlemen of the Convention.—It is the
peculiarity of Republican National Conventions that each one of
them has a distinct and interesting history. We are here to meet
conditions and solve problems which make this gathering not only
no exception to the rule but substantially a new departure. That there
should be strong convictions and their earnest expression as to
preferences and politics is characteristic of the right of individual
judgment which is the fundamental principle of Republicanism.
There have been occasions when the result was so sure that the
delegates could freely indulge in the charming privilege of favoritism
and of friendship. But the situation which now confronts us demands
the exercise of dispassionate judgment and our best thought and
experience. We cannot venture on uncertain ground or encounter
obstacles placed in the pathway of success by ourselves. The
Democratic party is now divided, but the hope of the possession of
power once more will make it in the final battle more aggressive,
determined and unscrupulous than ever. It starts with fifteen States
secure without an effort by processes which are a travesty upon
popular government, and, if continued long enough, will paralyze
institutions founded upon popular suffrage. It has to win four more
States in a fair fight, States which, in the vocabulary of politics, are
denominated doubtful. The Republican party must appeal to the
conscience and the judgment of the individual voter in every State in
the Union. This is in accordance with the principles upon which it
was founded and the objects for which it contends. It has accepted
this issue before and fought it out with an extraordinary continuance
of success. The conditions of Republican victory from 1860 to 1880
were created by Abraham Lincoln and U. S. Grant. They were that
the saved republic should be run by its saviours, the emancipation of
slaves, the reconstruction of the States, the reception of those who
had fought to destroy the republic back into the fold, without the
penalties or punishments, and to an equal share with those who had
fought and saved the nation, in the solemn obligation and
inestimable privilege of American citizenship. They were the
embodiment into the Constitution of the principles for which
2,000,000 of men had fought and 500,000 had died. They were the
restoration of public credit, the resumption of specie payments and
the prosperous condition of solvent business for twenty-five years.
They were names with which to conjure and events fresh in the
public mind which were eloquent with popular enthusiasm. It
needed little else than a recital of the glorious story of its heroes and
a statement of the achievements of the Republican party to retain the
confidence of the people. But from the desire for a change, which is
characteristic of free governments, there came a reversal, there came
a check to the progress of the Republican party and four years of
Democratic administration. Those four years largely relegated to the
realm of history past issues and brought us face to face with what
Democracy, its professions and its practices mean to-day. The great
names which have adorned the roll of the Republican statesman and
soldiers are potent and popular. The great measures of the
Republican party are still the best part of the history of the country.
The unequalled and unexampled story of Republicanism in its
progress and its achievements stands unique in the record of parties
in governments which are free. But we live in practical times, facing
practical issues which affect the business, the wages, the labor and
the prosperity of to-day.
“It will be won or lost upon the policy, foreign and domestic, the
industrial measures and the administrative acts of the
administration of Benjamin Harrison. Whoever receives the
nomination of this convention will run upon the judgment of the
people as to whether they have been more prosperous and more
happy, whether the country has been in a better condition at home
and stood more honorable abroad under these last four years of
Harrison and Republican administration than during the preceding
four years of Cleveland and Democratic government. Not since
Thomas Jefferson has any administration been called upon to face
and solve so many or such difficult problems as those which have
been exigent in our conditions. No administration since the
organization of the government has ever met difficulties better or
more to the satisfaction of the American people. Chile has been
taught that, no matter how small the antagonist, no community can
with safety insult the flag or murder American sailors. Germany and
England have learned in Samoa that the United States has become
one of the powers of the world, and no matter how mighty the
adversary, at every sacrifice American honor will be maintained. The
Bering Sea question, which was the insurmountable obstacle in the
diplomacy of Cleveland and of Bayard, has been settled upon a basis
which sustains the American people until arbitration shall have
determined our right. The dollar of the country has been placed and
kept on the standard of commercial nations, and a convention has
been agreed upon with foreign governments, which, by making bi-
metallism the policy of all nations, may successfully solve all our
financial problems. The tariff, tinkered with and trifled with to the
serious disturbance of trade and disaster to business since the days
of Washington, has been courageously embodied into a code which
has preserved the principle of the protection of American industries.
To it has been added a beneficent policy, supplemented by beneficial
treaties and wise diplomacy, which has opened to our farmers and
manufacturers the markets of other countries. The navy has been
builded upon lines which will protect American citizens and
American interests and the American flag all over the world. The
public debt has been reduced. The maturing bonds have been paid
off. The public credit has been maintained. The burdens of taxation
have been lightened. Two hundred millions of currency have been
added to the people’s money without disturbances of the exchanges.
“Unexampled prosperity has crowned wise laws and their wise
administration. The main question which divides us is to whom does
the credit of all this belong? Orators may stand upon this platform
more able and more eloquent than I who will paint in more brilliant
colors, but they cannot put in more earnest thought the affection and
admiration of Republicans for our distinguished Secretary of State. I
yield to no Republican, no matter from what State he hails, in
admiration and respect for John Sherman, for Governor McKinley,
for Thomas B. Reed, for Iowa’s great Senator, for the favorites of
Illinois and Wisconsin, but when I am told that the credit for the
brilliant diplomacy of this administration belongs exclusively to the
Secretary of State, for the administration of its finances to the
Secretary of the Treasury, for the construction of its ships to the
Secretary of the Navy, for the introduction of American pork in
Europe to the Secretary of Agriculture, for the settlement, so far as it
is settled, of the currency question, to Senator John Sherman, for the
formulation of the tariff laws to Governor McKinley, for the removal
of the restrictions placed by foreign nations upon the introduction of
American pork to our ministers at Paris and Berlin, I am tempted to
seriously inquire who, during the last four years, has been President
of the United States anyhow? Cæsar, when he wrote those
commentaries, which were the history of the conquests of Europe
under his leadership, modestly took the position of Eneas when he
said: ‘They are the narrative of events, the whole of which I saw and
the part of which I was.’ General Thomas, as the rock of
Chickamauga, occupies a place in our history with Leonidas among
the Greeks, except that he succeeded where Leonidas failed. The
fight of Joe Hooker above the clouds was the poetry of battle. The
resistless rush of Sheridan and his steed down the valley of the
Shenandoah is the epic of our civil war. The march of Sherman from
Atlanta to the sea is the supreme triumph of gallantry and strategy. It
detracts nothing from the splendor or the merits of the deeds of his
lieutenants to say that having selected them with marvellous sagacity
and discretion Grant still remained the supreme commander of the
national army. All the proposed acts of any administration before
they are formulated are passed upon in Cabinet council, and the
measures and suggestions of the ablest Secretaries would have failed
with a lesser President, but for the great good of the country and the
benefit of the Republican party they have succeeded because of the
suggestive mind, the indomitable courage, the intelligent
appreciation of situation and the grand magnanimity of Benjamin
Harrison. It is an undisputed fact that during the few months when
both the Secretary of State and the Secretary of the Treasury were ill
the President personally assumed the duties of the State Department
and of the Treasury Department, and both with equal success. The
Secretary of State in accepting his portfolio under President Garfield
wrote: ‘Your administration must be made brilliant, successful and
strong in the confidence and pride of the people, not at all diverting
its energies for re-election, and yet compelling that result by the logic
of events and by the imperious necessities of the situation.’ Garfield
fell before the bullet of the assassin and Mr. Blaine retired to private
life. General Harrison invited him to take up that unfinished
diplomatic career where its threads had been so tragically broken. He
entered the Cabinet. He resumed his work and has won a higher
place in our history. The prophecy he made for Garfield has been
superbly fulfilled by Harrison. In the language of Mr. Blaine: ‘The
President has compelled a re-election by the logic of events and the
imperious necessities of the situation.’
“The man who is nominated here to-day to win must carry a
certain well-known number of the doubtful States. Patrick Henry, in
the convention which started rolling the ball of the independence of
the Colonies from Great Britain, said: ‘I have but one lamp by which
my feet are guided, and that is the lamp of experience. I know of no
way of judging of the future but by the past.’ New York was carried in
1880 by General Garfield, and in every important election since then
we have done our best. We have put forward our ablest, our most
popular, our most brilliant leaders for Governor and State officers to
suffer constant defeat. The only light which illumines with the sun of
hope the dark record of those twelve years is the fact that in 1888 the
State of New York was triumphantly carried by President Harrison.
He carried it then as a gallant soldier, a wise Senator, statesman, who
inspired confidence by his public utterances in daily speech from the
commencement of the canvass to its close. He still has all these
claims, and in addition an administration beyond criticism and rich
with elements of popularity with which to carry New York. Ancestry
helps in the old world and handicaps in the new. There is but one
distinguished example of a son first overcoming the limitations
imposed by the pre-eminent fame of his father, and then rising above
it, and that was when the younger Pitt became greater than Chatham.
With an ancestor a signer of the Declaration of Independence and
another who saved the Northwest from savagery and gave it to
civilization and empire, who was also President of the United States,
a poor and unknown lawyer of Indiana has risen by his unaided
efforts to such distinction as lawyer, orator, soldier, statesman and
President, that he reflects more credit on his ancestors than they
have devolved upon him and presents in American history the
parallel of the younger Pitt. By the grand record of a wise
administration, by the strength in frequent contact of the people, in
wonderfully versatile and felicitous speech, by the claims of a pure
life in public and in the simplicity of a typical American home, I
nominate Benjamin Harrison.”
Speech of Hon. Leon Abbett.
Presenting Grover Cleveland for Nomination at the Chicago

Convention, June 22, 1892.
Mr. Chairman and Gentlemen of the Convention.—In
presenting the name to this Convention, I speak for the united
Democracy of the State of New Jersey, whose loyalty to Democratic
principles, faithful services to the party, and whose contributions to
its success entitle it to the respectful consideration of the Democracy
of the United States. Its electoral vote has always been cast in
support of Democratic principles and Democratic candidates.
In voicing the unanimous wish of the delegation from New Jersey,
I present as their candidate for the suffrages of this Convention the
name of a distinguished Democratic statesman, born upon its soil,
for whom in the two great Presidential contests the State of New
Jersey has given its electoral vote.
The supreme consideration in the mind of the Democracy of New
Jersey is the success of the Democratic party and its principles. We
have been in the past, and will be in the future, ready to sacrifice
personal preferences in deference to the clear expression of the will
of the Democracy of the Union. It is because of that that this name
will awaken throughout our State the enthusiasm of the Democracy
and insure success. It is because he represents the great Democratic
principles and policy upon which this entire convention is a unit; it is
because we believe that with him as a candidate the Democrats of the
Union will sweep the country and establish its principles throughout
the length and breadth of the land, that we offer to the Convention as
a nominee the choice of New Jersey, Grover Cleveland.
If any doubt existed in the minds of the Democrats of New Jersey
of his ability to lead the great Democratic hosts to victory they would
not present his name to-day. With them success of the party and the
establishment of its principles are beyond their love and admiration
for any man. We feel certain that every Democratic State though its
preferences may be for some other distinguished Democrat, will give
its warm, enthusiastic and earnest support to the nominee of this
Convention.
The man whom we present will rally to his party thousands of
independent voters, whose choice is determined by their personal
conviction that the candidate will represent principles dear to them,
and whose public life and policy gives assurance that if chosen by the
people they will secure an honest, pure and conservative
administration and the great interests of the country will be
encouraged and protected.
The time will come when other distinguished Democrats who have
been mentioned in connection with this nomination will receive that
consideration to which the great services they have rendered their
party entitle them, but we stand to-day in the presence of the fact
that the majority of the Democratic masses throughout the country,
the rank and file, the millions of its voters, demand the nomination
of Grover Cleveland.
This sentiment is so strong and overpowering that it has affected
and controlled the actions of delegates who would otherwise present
the name of some distinguished leader of their own State with whom
they feel victory would be assured and in whom the entire country
would feel confidence, but the people have spoken and favorite sons
and leaders are standing aside in obedience to their will.
Shall we listen to the voice of the Democracy of the Union? Shall
we place on our banner the man of our choice, the man in whom they
believe, or shall we, for any consideration of policy or expediency,
hesitate to obey their will?
I have sublime faith in the expression of the people when it is clear
and decisive. When the question before them is one that has excited
discussion and debate; when it appeals to their interests and their
feelings and calls for the exercise of their judgment and they then say
we want this man and we can elect him, we, their representatives,
must not disobey nor disappoint them.
It is incumbent upon us to obey their wishes and concur in their
judgment; then, having given them the candidate of their choice,
they will give us their best, their most energetic efforts to secure
success.
We confidently rely upon the loyal and successful work of the
Democratic leaders who have advocated other candidates. We know
that in the great States across the river from New Jersey, now
controlled by the Democratic party, there is no Democrat who will
shirk the duty of making every effort to secure the success of the
candidate of this Convention, notwithstanding his judgment may
differ from that of the majority.
The Democracy of New York and its great leaders whose efforts
and splendid generalship have given to us a Democratic Senator and
Governor will always be true to the great party they represent; they
will not waver, nor will they rest in the coming canvass until they
have achieved success.
Their grand victories of the past, their natural and honorable
ambition, their unquestioned Democracy will make them arise and
fight as never before, and with those that they represent and lead
they will march in the great independent vote and will again secure
for us the Democratic victory in New York. The grand Democrats
under whose leadership the city and State of New York are now
governed will give to the cause the great weight of their
organizations.
The thundering echoes of this Convention announcing the
nomination of Grover Cleveland will not have died out over the hills
and through the valleys of this land before you will hear and see all
our leaders rallying to the support of our candidate.
They will begin their efforts for organization and success and
continue their work until victory crowns their efforts. All Democrats
will fight for victory, and they will succeed because the principles of
the party enunciated here are for the best interests of the country at
large and because the people of this land have unquestioning faith
that Grover Cleveland will give the country a pure, honest and stable
government and an administration from which the great business
interests of the country and the agricultural and laboring interests of
the masses will receive proper and due consideration.
The question has been asked, Why is it that the masses of the party
demand the nomination of Grover Cleveland? Why is it that this man
who has no offices to distribute, no wealth to command, should have
stirred the spontaneous support of the great body of Democracy?
Why is it that with all that has been urged against him the people still
cry “Give us Cleveland?” Why is it, though he has pronounced in
honest, clear and able language his views upon questions upon which
some of his party may differ with him, that he is still near and dear to
the masses?
It is because he has crystallized into a living issue the great
principle upon which this battle is to be fought out. If he did not
create tariff reform he made it a Presidential issue; he vitalized it and
presented it to our party as the issue for which we could fight and
continue to battle until upon it victory is now assured.
There are few men in his position who would have the courage to
boldly make the issue and present it so clearly and forcibly as he did
in his great message of 1887. I believe that his policy then was to
force a national issue which would appeal to the judgment of the
people.
We must honor a man who is honest enough and bold enough
under such circumstances to proclaim that the success of the party
upon principle is better than evasion or shirking of true national
issues for temporary success. When victory is obtained upon a
principle, it forms the solid foundation of party success in the future.
It is no longer the question of a battle to be won on the mistakes of
our foes, but it is a victory to be accomplished by a charge along the
whole line under the banner of principle.
There is another reason why the people demand his nomination.
They feel that the tariff reform views of ex-President Cleveland and
the principles laid down in his great message, whatever its temporary
effect may have been, give us a live and a vital issue to fight for,
which has made the great victories since 1888 possible. It
consolidated in one solid phalanx the Democracy of the nation.
In every State of this union that policy has been placed in
Democratic platforms and our battles have been fought upon it, and
this great body of representative Democrats have seen its good
results.
Every man in this Convention recognizes the policy of the party. In
Massachusetts it gave us a Russell. In Iowa it gave us a Boies. In
Wisconsin it gave us a Peck for Governor and Vilas for Senator. In
Michigan it gave us Winans for Governor and gave us a Democratic
Legislature, and will give us eight electoral votes for President.
In 1889 in Ohio it gave us James Campbell for Governor, and in
1891, to defeat him it required the power, the wealth and the
machinery of the entire republican party. In Pennsylvania it gave us
Robert E. Pattison. In Connecticut it gave us a Democratic Governor,
who was kept out of office by the infamous conduct of the Republican
party. In New Hampshire it gave us a Legislature, of which we were
defrauded. In Illinois it gave us a Palmer for Senator and in Nebraska
it gave us Boyd for Governor.
In the great Southern States it has continued in power Democratic
Governors and Democratic Legislatures. In New Jersey the power of
the Democracy has been strengthened, and the Legislature and
executive are now both democratic.
In the great State of New York it gave us David B. Hill for Senator
and Roswell P. Flower for Governor.
With all these glorious achievements it is the wisest and best party
policy to nominate again the man whose policy made these successes
possible. The people believe that these victories, which gave us a
Democratic House of Representatives in 1890 and Democratic
Governors and Senators in Republican and doubtful states, are due
to the courage and wisdom of Grover Cleveland. And so believing,
they recognize him as their great leader.
In presenting his name to the Convention it is no reflection upon
any of them as the leaders of the party. The victories which have been
obtained are not alone the heritage of those States; they belong to the
whole party. I feel that every Democratic State and that every
individual Democrat has reason to rejoice and be proud and applaud
these splendid successes.
The candidacy of Grover Cleveland is not a reflection upon others;
it is not antagonistic to any great Democratic leader. He comes
before this Convention not as the candidate of any one State. He is
the choice of the great majority of Democratic voters.
The Democracy of New Jersey therefore presents to this
Convention, in this the people’s year, the nominee of the people, the
plain, blunt, honest citizen, the idol of the Democratic masses,
Grover Cleveland.
AMERICAN POLITICS.
BOOK IV.
PARLIAMENTARY PRACTICE.
Declaration of Independence.
A Declaration by the Representatives of the United States of

America in Congress assembled. July 4, 1776.
When in the Course of human events, it becomes necessary for one
people to dissolve the political bands which have connected them
with another, and to assume among the powers of the earth, the
separate and equal station to which the Laws of Nature and of
Nature’s God entitle them, a decent respect to the opinions of
mankind requires that they should declare the causes which impel
them to the separation.
We hold these truths to be self-evident, that all men are created
equal; that they are endowed by their Creator with certain
unalienable Rights; that among these are Life, Liberty, and the
pursuit of Happiness. That to secure these rights, Governments are
instituted among Men, deriving their just powers from the consent of
the governed; That whenever any Form of Government becomes
destructive of these ends, it is the Right of the People to alter or to
abolish it, and to institute new Government, laying its foundation on
such principles and organizing its powers in such form, as to them
shall seem most likely to effect their Safety and Happiness.
Prudence, indeed, will dictate that Governments long established
should not be changed for light and transient causes; and
accordingly all experience hath shown, that mankind are more
disposed to suffer, while evils are sufferable, than to right themselves
by abolishing the forms to which they are accustomed. But when a
long train of abuses and usurpations, pursuing invariably the same
Object, evinces a design to reduce them under absolute Despotism, it
is their right, it is their duty, to throw off such Government, and to
provide new Guards for their future security. Such has been the
patient sufferance of these Colonies; and such is now the necessity
which constrains them to alter their former Systems of Government.
The history of the present King of Great Britain is a history of
repeated injuries and usurpations, all having in direct object the
establishment of an absolute Tyranny over these States. To prove
this, let Facts be submitted to a candid world.
He has refused his Assent to Laws, the most wholesome and
necessary for the public good.
He has forbidden his Governors to pass Laws of immediate and
pressing importance, unless suspended in their operation till his
Assent should be obtained; and when so suspended, he has utterly
neglected to attend to them.
He has refused to pass other Laws for the accommodation of large
districts of people, unless those people would relinquish the right of
Representation in the Legislature, a right inestimable to them and
formidable to tyrants only.
He has called together legislative bodies at places unusual,
uncomfortable, and distant from the Depository of their public
Records, for the sole purpose of fatiguing them into compliance with
his measures.
He has dissolved Representative Houses repeatedly, for opposing
with manly firmness his invasions on the rights of the people.
He has refused for a long time, after such dissolutions, to cause
others to be elected; whereby the Legislative Powers, incapable of
Annihilation, have returned to the People at large for their exercise;
the State remaining in the meantime exposed to all the dangers of
invasion from without, and convulsions within.
He has endeavored to prevent the Population of these States; for
that purpose obstructing the Laws for Naturalization of Foreigners;
refusing to pass others to encourage their migrations hither, and
raising the conditions of new Appropriations of Lands.
He has obstructed the Administration of Justice, by refusing his
Assent to laws for establishing Judiciary Powers.
He has made Judges dependent on his Will alone, for the tenure of
their offices, and the amount and payment of their salaries.
He has erected a multitude of New Offices, and sent hither swarms
of Officers to harass our People, and eat out their substance.
He has kept among us, in times of peace, Standing Armies without
the Consent of our Legislatures.
He has affected to render the Military independent of and superior
to the Civil Power.
He has combined with others to subject us to a jurisdiction foreign
to our constitution, and unacknowledged by our laws; giving his
Assent to their Acts of pretended Legislation:
For quartering large bodies of armed troops among us:
For protecting them, by a mock Trial, from punishment for any
Murders which they should commit on the Inhabitants of these
States:
For cutting off our Trade with all parts of the world:
For Imposing Taxes on us without our Consent:
For depriving us, in many cases, of the benefits of Trial by Jury:
For transporting us beyond Seas to be tried for pretended offenses:
For abolishing the free System of English Laws in a neighboring
Province, establishing therein an Arbitrary government, and
enlarging its Boundaries so as to render it at once an example and fit
instrument for introducing the same absolute rule into these
Colonies:
For taking away our Charters, abolishing our most valuable Laws,
and altering fundamentally the Forms of our Governments:
For suspending our own Legislatures, and declaring themselves
invested with power to legislate for us in all cases whatsoever.
He has abdicated Government here, by declaring us out of his
Protection and waging War against us.
He has plundered our seas, ravaged our Coasts, burnt our towns,
and destroyed the Lives of our People.
He is at this time transporting large Armies of foreign Mercenaries
to complete the works of death, desolation and tyranny, already
begun with circumstances of Cruelty and Perfidy scarcely paralleled
in the most barbarous ages, and totally unworthy the Head of a
civilized nation.
He has constrained our fellow-citizens taken Captive on the high
Seas to bear Arms against their Country, to become the executioners
of their friends and Brethren, or to fall themselves by their Hands.
He has excited domestic insurrections amongst us, and has
endeavored to bring on the inhabitants of our frontiers, the merciless
Indian Savages, whose known rule of warfare is an undistinguished
destruction of all ages, sexes, and conditions.
In every stage of these Oppressions We have Petitioned for
Redress in the most humble terms; our repeated Petitions have been
answered only by repeated injury. A Prince, whose character is thus
marked by every act which may define a Tyrant, is unfit to be the
ruler of a free People.
Nor have We been wanting in attentions to our British brethren.
We have warned them, from time to time, of attempts by their
legislature to extend an unwarrantable jurisdiction over us. We have
reminded them of the circumstances of our emigration and
settlement here. We have appealed to their native justice and
magnanimity, and we have conjured them by the ties of our common
kindred to disavow these usurpations, which would inevitably
interrupt our connections and correspondence. They, too, have been
deaf to the voice of justice and of consanguinity. We must, therefore,
acquiesce in the necessity which denounces our Separation, and hold
them, as we hold the rest of mankind, Enemies in War, in Peace,
Friends.
We, therefore, the Representatives of the United States of
America in general Congress assembled, appealing to the
Supreme Judge of the World for the rectitude of our intentions, do,
in the Name, and by Authority of the good People of these Colonies,
solemnly PUBLISH and DECLARE, That these United Colonies are, and
of Right ought to be, FREE AND INDEPENDENT States; that they are
Absolved from all Allegiance to the British Crown, and that all
political connection between them and the State of Great Britain is,
and ought to be, totally dissolved; and that as free and
independent States, they have full Power to levy War, conclude
Peace, contract Alliances, establish Commerce, and to do all other
Acts and things which independent States may of right do. And for
the support of this Declaration, with a firm reliance on the Protection
of Divine Providence, We mutually pledge to each other our Lives,
our Fortunes, and our sacred Honor.
The foregoing declaration was, by order of Congress, engrossed,
and signed by the following members:
JOHN HANCOCK.
Josiah Bartlett,
New Hampshire William Whipple,
Matthew Thornton.
Samuel Adams,
John Adams,
Massachusetts Bay.
Robert Treat Paine,
Elbridge Gerry.
Stephen Hopkins,
Rhode Island, etc.
William Ellery.
Roger Sherman,
Samuel Huntington,
Connecticut.
William Williams,
Oliver Wolcott.
William Floyd,
Philip Livingston,
New York.
Francis Lewis,
Lewis Morris.
Richard Stockton,
John Witherspoon,
New Jersey. Francis Hopkinson,
John Hart,
Abraham Clark.
Robert Morris,
Benjamin Rush,
Benjamin Franklin,
John Morton,
Pennsylvania. George Clymer,
James Smith,
George Taylor,
James Wilson,
George Ross.
Cesar Rodney,
Delaware. George Read,
Thomes McKean.

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Engineering Economy 17th Edition

Sullivan Solutions Manual

0 = -$800 + $100 (P/A, i’%, 10)

5% + 10% + (5%)(10%) = 15.5% per year.

PW0 = $12,262.36 (P/F, 15.5%, 2) = $9,192.

Year Annual Tuition (A$) PW Factor (P/F, i%, N) PW of Tuition

PW(9%) = − $100,000(P/A,8%,4) − $10,000(P/G,8%,4)

EOY Salary (R$ in Year 0)

Total Capital Investment = $16,350,060 (1 + 0.05 + 0.042 + 0.08 + 0.31)

PW(12%) = −$24,230,790 – ($5)(125,000 ft2)

AW(4%) = −$28,584,102 (A/P,4%,10) = −$3,524,420

P(1.05)20 = $400,000(1.07)20 or P = $400,000(1.07 / 1.05)20.

ir = (0.08 - 0.03) / (1 + 0.03) = 0.0485 (4.85%).

CW = $50,000 / 0.0485 = $1,030,928.

So Alfred needs $1,030,928 worth of life insurance.

(c) C2019 = ($3.12 billion)(F/P, 9.2%, 10) = $7.52 billion

(b) $850 = $690(1.032)N; N = 6.62 years

(c) $285.56 = $850(1 + ir)28; ir = −3.82%

Total (un−discounted dollars) = $257,298

(b) Ieff = (1.005)12 – 1 = 0.0617 or 6.17%

P2024 = $57,100 + $61,668[1 – (P/F,6.17%,3)(F/P,8%,3)]/(0.0617 – 0.08) = $234,373

A = $234,373 (A/P,0.5%,156 months) = $234,373 (0.00925) = $2,168 per month

(b) A$ = $7.50(1.032)22 = $22.20 per thousand cubic feet

(b) Left to student.

P = ($5,000 [1- (P/F, 6%, 35)(F/P, 0.5%, 35)]) / (0.06 – 0.005)

= ($5,000 [1- (0.1301)(1.1907)]) / (0.055)

Then F (future equivalent) is $76,827 (F/P, 6%, 35) = $590,502

P’ = $590,502 (P/F, 3%, 35)

F2017 = $5,000 (1.13)(1.046)(1.06)2(1.09)2(1.12)(1.08)(1.06)(1.056) = $10,682

$10,682 = $5,000 (F/P, i’, 10)

Or i% = 7.89% per year

im = 0.1005 + 0.045 + (0.1005)(0.045) = 0.15 or 15% per year

ej’ = (0.15  0.057) / 1.057 = 0.0880 or 8.8% per year

MV7 = (0.10)($950,000) = $95,000

PW(15%) = $950,000  $92,600(P/A, 8.8%, 7) + $95,000(P/F, 15%, 7) = $1,383,484

Annual Revenue = $1,383,484 (A/P, 15%, 7) = $332,590

MVB = 40,000 (1.055)8 = $61,387.46

= -150,000 + 34,000 (3.7845) – 500 (7.937) + 34,471.07 (0.423)

AWA = PWA (A/P, 15, 6)

PWB = -240,000 + 44,000 (P/A, 15, 8) + 61,387.46 (P/F, 15, 8)

= -240,000 + 44,000 (4.4873) + 61,387.46 (0.3269)

AWB = PWB (A/P, 15, 8)

(A) (B) Taxable Cash Flow

PW1(20%) = −$X + $0.1133X(P/A,20%,3)

(A) (B) Taxable Cash Flow

PW2(20%) = −$13,200(P/F,20%,1) − $14,520(P/F,20%,2) − $15,972(P/F,20%,3)

Set PW1 = PW2 and solve for X.

−$X + $0.1133X(P/A,20%,3) = −$30,326

CR (8%) = $180,000 (A/P, 8%, 8) - $18,000 (A/F, 8%, 8)

PW of revenue = $60,000 [1- (P/F, 8%,8)(F/P, 5%,8)] / (0.08 - 0.05)

The net equivalent annual worth is $70,194 - $29,628 = $40,566.

Project is not economically acceptable.

By linear interpolation, i'% = IRRfm = 0.2798, or 28.0% per year.

(A) (B) (C) (D) (E) (F) (G)

(b) im = (1.05)(1.09524) – 1 = 0.15 = 15% per year

PW = −$50,640(P/F,15%,1) − $38,904(P/F,15%,2) − $33,194(P/F,15%,3)

EUAC = $146,084(A/P,15%,6) = $38,595

 500 million Btu   1,000 ft of gas

 $8.25  1  (P / F,18%,12)(F / P,10%,12)]

PW(15%) = −$2,500 − $797 (P/F,15%,8)

(b) ir = 0.15  0.06 = 0.085or 8.5% per year

(A) (B) (C) (D) (E) (F) (G)