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Sheet Exam 11-2023

حل الشيت

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17 views11 pages

Sheet Exam 11-2023

حل الشيت

Uploaded by

hazemabdalazezm
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Higher Technological Institute

10th of Ramadan City


(6th of October branch)
Department of Mechanical Engineering
Subject: Engineering Economy (MNG102+ENG151) Term: Nov 2023
Dr. Ahmed Sultan Moawad Sheet No.1
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1- A company that manufactures regenerative thermal oxidizers made an investment 10


years ago that is now worth $1,300,000. How much was the initial investment at an
interest rate of 15% per year (a) simple interest and (b) compound interest?

2- How much money should you be willing to pay now for a guaranteed 600$ per year for
9 years starting next year, at a rate of return of 16% per year?
3- A couple plans to start saving money by depositing $500 into their savings account one
year from now. They estimate that the deposits will increase by $100 each year for 9 years
thereafter. What would be the present worth of the investments if the interest rate is 5%
per year?

4- A family that won a $100,000 prize on America’s Funniest Home Videos decided to
put one-half of the money in a college fund for their child who was responsible for the
prize. If the fund earned interest at 6% per year, how much was in the account 14 years
after it was started?
5- What amount invested in a savings account that pays 8% interest annually is worth
215892.50 L.E after 10 years?
8- I put 1000$ in an account from my high school graduation gifts and 2000$ into the
same account after my college graduation 4 years later Five years after I started my first
job how much is in the account if it earns 4% per year?
9- A company wishes to set aside budget to cover the maintenance costs of a machine for
its lifetime of 12 years The maintenance charges are 1000$ annually and paid at the end of
each year of service How much money must be invested at the beginning of the first year
to pay for the maintenance costs if the interest rate is 4% on the set aside dollars?

10- A company wishes to make 5 equal annual investments so that on the date of the last
investment, it will have 50 000 $ to buy a new machine. What amount must be invested
each year at an interest of 4 %?
11- How much money must an electrical contractor deposit every year in her savings
account starting 1 year from now at 5.5% per year in order to accumulate $6000 seven
years from now?

12- How much money do we have to save annually to buy a car 4 years from now that has
an estimated cost of $18,000, The savings account offers 4.0 % yearly interest.
13- If an investment opportunity is offered today for $5 Million, how much must it yield
at the end of every year for 10 years to justify the investment if we want to get a 12%
interest?

14- An investment of $40,000 one year ago and $50,000 now are equivalent at what
interest rate?

15- You will save for a vacation by depositing $200 in one month then $5 less each month
for two years. Determine the amount you will have saved after two years if the interest
rate is 4.5% compounded monthly.
16- An investment of $200,000 is expected to generate the following cash inflows in six years: Year
1: $70,000 Year 2: $60,000 Year 3: $55,000 Year 4: $40,000 Year 5: $30,000 Year 6: $25,000
Compute payback period of the investment. Should the investment be made if management wants
to recover the initial investment in 3 years or less?
18- Assume a company is planning to invest $9,000 in a project today. The project is expected to
have a life of four years & interest rate of 10%. The expected cash flows at the end of each of the
next four years are $2,000, $3,000, $3,000 and $4,000. Compute the net present value.

19- Considering i =10%, you have to choose one of two projects A or B, as shown in table:

Year 0 1 2 3
projects A - 1000$ 100$ 600$ 800$
projects B - 1000$ 700$ 500$ 200$

a) Sketch cash flow diagram of Projects A and B?


b) Find net present value (NPV) of Projects A and Band which one do you prefer?
c) Find payback period (Pb) of Projects A and B and which one do you prefer?
20- An industrial engineer is considering two robots for purchase by a fiber-optic manufacturing
company. Robot X will have a first cost of $80,000, an annual maintenance and operation (M&O)
cost of $30,000, and a $40,000 salvage value. Robot Y will have a first cost of $97,000, an annual
M&O cost of $27,000, and a $50,000 salvage value. Which should be selected on the basis of a
Annual worth comparison at an interest rate of 15% per year? Use a 3-year study period.
21- A certain industrial firm desires an economic analysis to determine which of two different
machines should be purchased. Each machine is capable of performing the same task in a given
amount of time. Use the following data to determine which machine you would choose if the
interest rate is 8%. (You have to use the annual worth analysis method)

With my best wishes

Dr. Eng. Ahmed Sultan

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