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Engineering Economy

The document contains an 8-item midterm exam covering topics in engineering economics including: 1) Calculating return on investment (ROI) for a project with an initial investment, working capital, salvage value, and annual cash flows. 2) Determining modified internal rate of return (MIRR) for a similar investment with expenses. 3) Calculating gross profit at different capacity utilization levels given fixed costs, sales, and gross profit at a specific capacity. 4) Finding payback period in years for an investment with total capital cost, fixed capital ratio, salvage value, and annual net profit. 5) Calculating net present value (NPV) of an investment with multiple cash flows

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Michelle Mariposa
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41 views

Engineering Economy

The document contains an 8-item midterm exam covering topics in engineering economics including: 1) Calculating return on investment (ROI) for a project with an initial investment, working capital, salvage value, and annual cash flows. 2) Determining modified internal rate of return (MIRR) for a similar investment with expenses. 3) Calculating gross profit at different capacity utilization levels given fixed costs, sales, and gross profit at a specific capacity. 4) Finding payback period in years for an investment with total capital cost, fixed capital ratio, salvage value, and annual net profit. 5) Calculating net present value (NPV) of an investment with multiple cash flows

Uploaded by

Michelle Mariposa
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Midterm Exam

Engg Econ
April 04.2023

1. An investment requires a total capital investment of P1,200,000 and a working capital of P100,000.
The fixed capital investment has salvage value of P200,000 after 5 years. The projected annual cash
flow is P500,000 per year. Determine the ROI
a. 26.67% b. 29.09% c. 25.00% d. 19.98%

2. An investment requires a total capital investment of P1,200,000 and a working capital of P100,000.
The fixed capital investment has salvage value of P200,000 after 5 years. The projected annual cash
flow is P500,000 per year from 2nd year until 5th year and annual expenses is P360,000.
Determine the MIRR. (Shift-Solve allowed)
a. 26.67% b. 19.98% c. 20.28% d. 18.88%

3. The annual fixed costs of a plant is P5,000,000 with net sales of P 25,000,000 at 100% capacity. The
gross profit at 80% capacity is P5,000,000? What is its gross profit at 90% capacity?
a.P6,250,000 b. P8,000,000 c. P10,000,000 d. P62,5000

4. An investment requires a total capital investment of P15,000,000 and a fixed capital equal to 80% of
total capital investment. The fixed capital investment has salvage value of P200,000 after 5 years. The
projected annual net profit is P2,000,000 . The pay-out period in years is nearest to..
a. 2.71 b. 2.5 c. 3 d.3.5

5. A project requires a total capital investment of P1,500,000 with fixed capita investment equal to 80%
of total capital investment. The fixed capital investment has salvage value of P200,000 after 6 years.

Cash Flow (1st year to 3rd year) =P450,000/year; Cash Flow (4th year to 5th year)=P350,000/year.
Assuming a MARR of 20% is required, the net present value of the investment is nearest to.
..- P75,189 b. P85,400 c. P60,060 d. P50,000
a

6. Mr. Laden Been borrows from a bank P6,000, 000 at 8% pa compounded quarterly, agreeing to pay
the loan in 10 equal end of quarter payments. If the first payment is made 1 year from now, the
quarterly payments are nearest to_______. (Present Cash flow)
a. P723,020 b. P737,480 c. P708,843 d. P565,680.
7. An original loan of P2,000,000 was made at 6% simple interest per year for 5 years. At the end of
this time, no interest had been paid and the loan was extended for 5 more years at a new interest
rate of 12% per year compounded monthly. What is the total amount owed at the end of the 10th
year if no intermediate payments are made?
a. P448,000 b. P317,375 c. P4,723,410 d. P507,681

8. An amount of P1,000,00 is borrowed at 16% pa compounded quarterly. A partial payment of


P400,000 is made after one year, and P200,000, on the 18th month. The remaining amount to be
paid on the 2nd year is____.
a. P684,305.46 b. P458,880.65 c. P588,858.45 d. P472,298

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