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Final

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Yuossef Fawzy يوسِف فَوْزِي
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Final

Uploaded by

Yuossef Fawzy يوسِف فَوْزِي
Copyright
© © All Rights Reserved
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Download as PDF, TXT or read online on Scribd
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COLLEGE OF ENGINEERING &TECHNOLOGY.

Department : Basic and Applied Science Department.


Examiners : Engineering Economy Lecturers
Final Examination
Course : Engineering Economy Date / Time: 02/02
Course No. : NE364 Time: (2 Hrs)
Semester :1st 2020 /21 Marks: 40 marks

Answer the next four questions


Question One: (6marks)
It costs $10,000 for hand tools and $5.50 labor per unit to manufacture a product. Another
alternative is to manufacture the product by an automated process that costs $15,000, with a $3.50
per-unit cost. Construct graphically the breakeven point for the two alternatives and show the
optimum range for each alternative.
Question Two: (10marks)
For the given projects with useful life equals six years. Find best alternative using Incremental
Present Worth with MARR = 18%.
Project A B C D
Investment cost $10,000 $8,000 $6,000 $12,000
Estimated units to be sold per year 5,000 2,000 5.000 1,000
Selling price $/unit $2 $3.5 $1.5 $6
Variable cost $/unit $1 $0.75 $0.3 $1.5
Annual Expenses (fixed) $/year $2,000 $3,000 $4,500 $1,000
Salvage Value $200 _____ $1,000 $300

Question Three: (14marks)


a) For the given cash flow below if cash inflow equals cash outflow, find the value of x for i=15%
per year. (Use minimum number of factors)

10,000

f=8% 20,000

0 1 2 3 4 5 6 7 x8 9 10 11 12
2x 3x
4x 5x

1|2 EDQMS2/3
b) Use Present Worth method to compare between the three alternatives A, B and C at
(MARR=12% per year) Assume Repeatability is applicable.

Project A B C
Investment cost $60,000 $40,000 $100,000
Annual $30,000 per $ 15,000 and $15,000 and increases
Revenues year increase by $3000 per year starting at end
by 5% each year of year 7
Annual $7,000 $7,000 $1,000
expenses
Salvage value $10,000 ______ $20,000
Useful life 4 years 6 years 12 years

Question Four: (10marks)


a) A loan of $15,000 is made today at an interest rate of 18% compounded weekly, a payment of
$3000 is made 6 years later. What is the amount still owed at the end of year nine?
b) If a company invests $11,000 to buy a new machine and receives $2,750 per year for five years,
if the salvage value is $1,900. Evaluate the investment using IRR at MARR=12%.

2|2 EDQMS2/3

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