Engineering Economy 7th Edition by Leland Blank ,Anthony Tarquin

Exercise 40

Titan manufactures and sells gas-powered electricity generators. It can purchase a new line of fuel injectors from either of two companies. Cost and savings estimates are made, but the savings estimate is unreliable at this time. Use an AW analysis at 10% per year to determine if the selection between company A and company B changes when the savings per year may vary as much as 40% from the best estimates made thus far.