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CENG 196 Problem Set 04 Engineering Economy 2425B

This document is a problem set for CENG 196 – CE Competency Appraisal I, focusing on engineering economy concepts. It includes 20 questions that cover various topics such as interest calculations, depreciation methods, and cost analysis. Each question requires a complete solution formatted clearly on CE paper.

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JOSHUA TE�OSO
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87 views1 page

CENG 196 Problem Set 04 Engineering Economy 2425B

This document is a problem set for CENG 196 – CE Competency Appraisal I, focusing on engineering economy concepts. It includes 20 questions that cover various topics such as interest calculations, depreciation methods, and cost analysis. Each question requires a complete solution formatted clearly on CE paper.

Uploaded by

JOSHUA TE�OSO
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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CENG 196 – CE COMPETENCY APPRAISAL I

Second Semester A.Y. 2024-2025


PROBLEM SET NO. 4
ENGINEERING ECONOMY
Instructions: Answer the following questions on CE paper. Format your paper into two columns for clarity,
ensuring each question is accompanied by its complete solution. Enclose your final answer for each
question within a box.
1. An equipment installation job in the completion stage can be completed in 40 days of 8-
hour day work with 40 men working. With the contract expiring in 30 days, the contractor
decided to add 10 men on the job, overtime note being permitted. If the liquidated damage
is ₱2,000 pesos per day of delay, and the men are paid ₱80 per day, determine the number
of days of delay and compute the amount of savings with the addition of workers.
2. An investment of ₱200,000 for 36 days earns ₱3,588 after deducting 20% withholding tax.
Find the annual rate of simple interest.
3. A man borrowed ₱75,000 on September 18, 1898 and promised to pay on May 17, 1904 at
a simple interest of 12% per annum. How much will be the total interest?
4. An item is payable in 180 days but if paid in 30 days, there will be a discount. If the annual
rate of interest is 32%, find the discount.
5. How long will it take money to double if it earns 4% per annum compounded annually?
6. A man borrowed ₱120,000 and promised to pay annually for 5 years. The payment starts
at “X” pesos and the succeeding payments double yearly. If the interest rate is 8%
compounded annually, how much will the first payment be?
7. Convert 8% compounded quarterly per year into compounded annually per quarter.
8. An individual makes five annual deposits of ₱2,000 in a savings account that pays interest
at a rate of 4% per year. One year after making the last deposit, the interest rate changes
to 6% per year, five years after the last deposit, the accumulated money is withdrawn from
the account, how much is withdrawn?
9. A farmer bought a tractor costing ₱25,000 payable in 10 semi-annual payments, each
installment payable at the beginning of each period. If the rate of interest is 26%
compounded semi-annually, determine the amount of each installment.
10. A man loans ₱192,000 and promised to pay for 8 years at an interest rate of 5%
compounded annually, the first payment being due at the end of 10 years. Find the annual
payment.
11. Find the present worth of a perpetuity of ₱10,000 payable quarterly if money is worth 10%
compounded monthly.
12. Suppose a man receives an initial annual salary of ₱60,000, increasing at the rate of ₱5,000
a year. If money is worth 10%, determine his equivalent uniform salary for a period of 8
years.
13. A man borrowed ₱120,000 and promised to pay annually for 5 years. The payment starts
at “X” pesos. The man intends to increase his payments by 10% at the end of each
successive year. If the interest rate is 8% compounded annually, how much will the first
payment be?
14. The original cost of a certain piece of equipment is ₱500,000. The value after its useful life
of 5 years is ₱100,000. Using straight line method of depreciation, find its value at the end
of 3 years.
15. An equipment was bought for ₱1,800,000 with a salvage value of ₱350,000 after its life of
8 years. The cost of money is 12% per year. Using sinking fund method of depreciation, fits
its book value after 5 years.
16. A machine costing ₱880,000, is estimated to have a life of 8 years. If the annual rate of
depreciation is 24%, determine the total depreciation using the constant percentage of the
declining balance method.
17. Determine the annual cost of a structure that requires ₱15 million to build with a salvage
value of ₱2 million after 12 years if the interest rate is 6% compounded annually.
18. At 6%, find the capitalized cost of a bridge whose cost is ₱250 million and life is 20 years,
if the bridge must be partially rebuilt at a cost of ₱100 million at the end of each 20 years.
19. An investor bought a machine costing ₱560,000 with a scrap value of ₱40,000 after its
useful life of 8 years. He desires interest annually at the rate of 8% on his investment and
accumulates replacement fund by investing annual deposits at 5%. Find the minimum
annual return from his investment.
20. A company produces a certain commodity. The labor and material cost for each item
produced is ₱65.00. Other variable cost is₱28.00 per unit. The fixed monthly cost is
₱440,000.00 if each item is to be sold at ₱170.00, determine the number of units that must
be produced per month in order to break-even.

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