RI - Engineering Econ 4
RI - Engineering Econ 4
4. If the proceeds of the loan P2,460 will be paid Situation - A machine is purchased at P10200 with a. 106,000 c.101,760
P2,840 at the end 1 year and 3 months, what is the an expected salvage value of P1,200 at the end of its
simple discount rate? Ans. 11% economic life of 8 years. If money is worth 6% per b. 169,600 d.122,640
annum, determine the book value of the machine at
Inflation the end of 4 years using:
3. A telephone company purchases a microwave
radio equipment for P6M. If the equipment shall be
5. A P2,000 in 2 years has an average inflation rate of 11. Straight Line Method; Ans. P5700; depreciated over a period of 8 years with a salvage
6% and the real interest rate of money is 10%. value of 5% of the cost of equipment, determine the
Determine the inflation-adjusted interest rate. 12. . SOYD method; Ans. P3700; worth of the equipment on the 4th year after
Ans. 16.6% deducting the depreciation changes using MACRS
13. Matheson’s method; Ans. P3499 method.
6. A company invests P10,000.00 today to be repaid
in 5 years in one lump sum at 12% compounded 14. DDB method; Ans. P3227; a. 750,000 c. 984,375
annually. If the rate of inflation is 3% compounded
annually, how much profit is relieved over 5 years? 15. MACRS method; Ans. P3765 b. 1,312,500 d. 2.215M
Ans. 5,202.0
16. Sinking Fund method; Ans. P6,222 Answers: 1-B, 2-D, 3-D
7. If the cost of money is 9% and the inflation rate is
5%, what interest rate will take care of the cost of
money and inflation? Ans. 14.45%
8. A property is purchased at P 100,000 with a
salvage value of 10% of the original cost after 8
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Civil Engineering November 2020 Review Innovations Engineering Economy 4
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