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    Problem Set II

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    Vynz Joshua
    1. The document is a problem set for an engineering economics course containing 15 questions about topics such as calculating installment payments, present and future worth, equivalent worth, and capitalized costs. Students are asked to show calculations and draw cash flow diagrams for several of the questions. 2. Questions involve calculating things like the number of payments needed to pay off a car loan, determining present worth of future payments, equivalent annual worth of a mine's production over several years, and capitalized costs of an asset that requires annual maintenance. 3. Students are instructed to round final answers to 2 decimal places and to attempt answering all questions, even if unsure of some. They are also told to follow instructions

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    Problem Set II

    Uploaded by

    Vynz Joshua
    11 views8 pages
    1. The document is a problem set for an engineering economics course containing 15 questions about topics such as calculating installment payments, present and future worth, equivalent worth, and capitalized costs. Students are asked to show calculations and draw cash flow diagrams for several of the questions. 2. Questions involve calculating things like the number of payments needed to pay off a car loan, determining present worth of future payments, equivalent annual worth of a mine's production over several years, and capitalized costs of an asset that requires annual maintenance. 3. Students are instructed to round final answers to 2 decimal places and to attempt answering all questions, even if unsure of some. They are also told to follow instructions

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    1. The document is a problem set for an engineering economics course containing 15 questions about topics such as calculating installment payments, present and future worth, equivalent worth, and capitalized costs. Students are asked to show calculations and draw cash flow diagrams for several of the questions. 2. Questions involve calculating things like the number of payments needed to pay off a car loan, determining present worth of future payments, equivalent annual worth of a mine's production over several years, and capitalized costs of an asset that requires annual maintenance. 3. Students are instructed to round final answers to 2 decimal places and to attempt answering all questions, even if unsure of some. They are also told to follow instructions

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    11 views8 pages

    Problem Set II

    Uploaded by

    Vynz Joshua
    1. The document is a problem set for an engineering economics course containing 15 questions about topics such as calculating installment payments, present and future worth, equivalent worth, and capitalized costs. Students are asked to show calculations and draw cash flow diagrams for several of the questions. 2. Questions involve calculating things like the number of payments needed to pay off a car loan, determining present worth of future payments, equivalent annual worth of a mine's production over several years, and capitalized costs of an asset that requires annual maintenance. 3. Students are instructed to round final answers to 2 decimal places and to attempt answering all questions, even if unsure of some. They are also told to follow instructions

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 8

    Problem Set II

    Second Semester, AY 2023-2024


    Course Code ENGG 404

    Course Title ENGINEERING ECONOMICS

    Section

    SR-Code

    Name of Student

    General Instructions:
    1. Answer all the following questions. If you are unsure about a question, provide your best
    attempt
    2. Follow instructions on every question.
    3. Round your final answers to 2 decimal places
    1. How many quarterly payments of Php56,000 at 12% compounded quarterly must be
    made in order to pay a car costing Php750,000 by installments instead of paying it at
    once?

    2. An employee has a promissory note, due 6 years hence, whose maturity value is P87,000.
    If the rate of interest is 10% compounded quarterly, what is the value of this note now

    3. If a credit card charges 1.5% interest every month, what are the nominal and effective
    interest rates per year?
    4. Today, a businessman borrowed money to be paid in equal payments of P2000 at the end
    of every three months for 5 years. If the interest rate is 12% compounded quarterly, how
    much did he borrow? Draw cash flow diagram

    5. If P670 is invested at the end of each year for 6 years at an interest rate of 7.5%. What is
    the total amount available upon the deposit of the 6th payment? Draw cash flow diagram
    6. An air-conditioning company offers late payment options for a split type aircon with
    monthly payments of P3205 for 2 years. The payments will begin after 4 months. How
    much is the cash price of the aircon if the interest rate is 8.3% compounded monthly? Draw
    Cash Flow Diagram

    7. An engineer wishes to purchase and annuity for his retirement. He’s 25 years old today,
    and he wants the first payment to occur in 25 years when he turns 50. He would like the
    annuity to make 20 equal annual installments of Php250,000. How much will the annuity
    cost today if i = 8% Draw Cash Flow Diagram
    8. A shop owner started to save money by depositing an amount every beginning of the month
    to a bank that offers 5.7% so they can buy a Php56000 worth of machine in 6 months. Find
    the monthly deposits. Draw Cash Flow Diagram

    9. An engineer borrowed Php150,000 at 10% effective annual interest. He must pay back the
    loan over 25 years with a uniform monthly payment due on the first day of each month.
    How much does the engineer pay each month? Draw Cash Flow Diagram
    10. A small gold mine yielded an equivalent amount of Php600,000 during its first year of
    operation, Php550,000 in its second year, and amounts decreasing by Php50,000 every
    year. Knowing that the mine can only operate up to 5 years, what is its equivalent annual
    yield if i = 10% Draw Cash Flow Diagram

    11. A highway department expects the cost of maintenance for a piece of heavy construction
    equipment to be $6000 in year 1, to be $6500 in year 2, and to increase annually by $500
    through year 10. At an interest rate of 10% per year, determine the present worth of 10
    years of maintenance costs. Draw Cash Flow Diagram
    12. Josh needs money to launch a business. I have agreed to lend him the money today at an
    interest rate of 6% compounded annually. I require that the loan be repaid in 9 annual
    payments. Payment will start at the end of year 1 with a Php15,000 payment. Subsequent
    payments will decrease by Php1,000 each year thereafter. How much money did I lend
    him?

    13. A company sells pressure gauges for $7 each and produces 1000 gauges in the first month
    of production. The company anticipates that production output will improve by 0.25% per
    month for the first 2-years of operation. Assuming that all the gauges are sold in the month
    they are produced, and assume that the interest is 1.5% per month. What is the present
    worth of the sales revenue for the first 2-years of production?
    14. A natural gas drilling project has a net revenue in its first year of $25,000. Each year,
    thereafter, the revenue decreases by 10%/year. Based on i = 12%, what is the present worth
    of his investment over a 20-year period? What is the accumulated worth at the end of the
    20-year period?

    15. Calculate the capitalized cost of an asset that initially costs Php3,000,000 but requires
    annual maintenance cost of Php15,000 in order for it to last longer. Use i = 6.5%

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