Solved Problems in Engineering Economics: CLSU-AE Board Exam Review Materials 1
Solved Problems in Engineering Economics: CLSU-AE Board Exam Review Materials 1
Solved Problems in Engineering Economics: CLSU-AE Board Exam Review Materials 1
ENGINEERING ECONOMICS
Given:
P = 35,000
i = 8%
n = 7mos & 15 days = 15days/30days = 0.5mo
= 7.5mos/12 = 0.625 year
Solution:
I = P x ix n
= P35,000 x 0.08 x 0.625
= P1,750
I=F–P
= $15,036.30 - $10,000
= $5,036.30
Given:
F = P6,700.48
i = 10% / 2 = 5%
n = 3 years x 2 = 6 periods
Solution:
P = F (1+i)-n
= 6,700.48 (1+0.05)-6
= 6,700.48 (0.746)
= P5,000
Given:
C = P1,050 Z = P1,000
i = 8% r = 9%
n = 6 years
Solution:
Vn = C (P/F, i%, n) + rZ (P/A, i%, n)
= 1,050 (P/F, 8%, 6) + 0.09(1,000) (P/A, 8%, 6)
= 1,050 (0.6302) + 90 (4.6229)
= 661.71 + 416.06
= 1,077.77
Solution:
AW(15%) = R – E – CR(i%)
= 720,000 – 80,000 –
[ (3,800,000) (A/P, 15%, 20) – 3,200,000 (A/F, 15%, 20)]
= 640,000 – [ (3,800,000) (0.1598) – 3,200,000 (0.0098)]
= 640,000 – (607,240 – 31,360)
= 640,000 – 575,880
= 64,120
SINCE AW(15%) > O, the investment is justified.
Given:
A = P500
N = 25 years
i = 10%
Solution:
P = A (P/A, 10%, 25)
= P500 (9.0770)
= P4,538.50
Solution:
A = F (A/F, 15%, 5)
= 24, 720 (0.1483)
= P3,665.98
Solution:
BEP = CF / (p-cv)
= $21,270 / ($16/A - $1.75/A)
= $21,270 / $14.25/A
= 1,493 Acres
Solution:
F = P (1 + ni)
P = F / (1 + ni)
= 15,000 [ 1+ 3(0.20)]
= 15,000 (1.6)
= 24,000
Solution:
Solution:
i = 8/4 = 2%
F = P (1+i)N
3 = 1 (1+0.02)N
3 = 1.02N
ln3/ ln1.02 = N
N = 55.48 periods or quarters = 13.87 years or 14 years
Solution:
N = 12 x 2 = 24 periods
r = 10% / 2 = 5% per period
i% = 8% / 2 = 4% per period or semi-annually
C = Z = $5,000
Solution:
Solution:
BEP = CF / p – cv
= 80,000,000 / 3,600 – 1,600
= 40,000 units
in % capacity:
Solution:
i = I / Pn
= 3,552.50 / 28,000 x 1.75
= 3,552.50 / 49,000
= 0.0725 or 7.25%
Solution:
D* = a - cv / 2b
p = a – bD ; a = 11,250 ; b = 1.5
End-of-Year Profit
1 15,000
2 -12,500
3 20,000
4 20,000
5 50,000
N N
PW = Σ Rk (P/F,i’%,k) - Σ Ek (P/F,i’%,k) = 0
k=0 k=0
At i = 15%
PW = - 50,000 + 15,000 (P/F,15%,1) – 12,500 (P/F,15%,2)
+ 20,000 (P/F,15%,3) + 20,000 (P/F, 15%, 4) + 50,000 (P/F, 15%, 5)
= 3,038.75
At i = 18%
PW = - 50,000 + 15,000 (P/F,18%,1) – 12,500 (P/F,18%,2)
+ 20,000 (P/F,18%,3) + 20,000 (P/F, 18%, 4) + 50,000 (P/F, 18%, 5)
= -1,922
BY INTERPOLATION:
CLSU-AE Board Exam Review 20
i = 16.83% Materials
An agricultural engineer estimated that the purchase of an
automated tiller can save a farmer P150,000 a year in a labor
cost. The tiller has an expected life of 5 years and no salvage
value. If the farmer must earn a 20% annual return on such
investment, at what amount he should spend to justify the
purchase of the tiller?
Solution:
P = A (P/A, 20%, 5)
= 150,000 (2.9906)
= 448,590
D3 = B (1-R)k-1 (R)
= 448,590 (1 – 2/5)2 (2/5)
= 64, 596.96
A salvage value equal to 20% of the first cost is expected for each
structure. If the interest rate is 12% which structure should the
barangay council choose?
Solution:
R S
Material cost / unit P150 P170
Labor Cost / unit P80 P90
Solution:
Solution:
Solution:
Solution:
Solution:
Solution:
Solution:
Solution:
For Bidder A:
PW = 5,000,000 (0.20) + 500,000 (P/A, 10%, 8)
= 1,000,000 + 500,000 (5.3349)
= 3,667,450
For Bidder B:
Solving for the interest rate per semi-annual:
i = (1 + r/M)M – 1
0.10 = (1 + r/2)2 – 1
r/2 = 0.0488 or 4.88% per semi-annual
PW = 1,000,000 + 250,000 (P/A, 4.88%,14)
= 1,000,000 + 250,000 (9.9756)
= 3,493,918
Therefore, the bid which isCLSU-AE
moreBoard Exam Review
beneficial
Materials
to AMC is that from 35
Bidder A.
A company imports a 30Hp sandmill costing 520,000. Bank
charges, brokerage, etc, costs 10,000. Installation costs were
40,000. Other incidental expenses amounted to 25,000.
Salvage value of the mill is estimated to be 75,000 after 20
years. Find the book value of the mill using SLM, at the end
of: a) 10 years b) 15 years
Solution:
B = 520,000 + 10,000 + 40,000 + 25,000
= 595,000
d = (B – SV) / N
= (595,000 – 75,000) / 20
= 26,000
d10 = 26,000 (10)
= 260,000
BV10= 595,000 – 260,000
= 335,000
d15 = 26,000 (15)
= 390,000
BV15= 595,000 – 390,000
= 205,000 CLSU-AE Board Exam Review 36
Materials
A man wishes to purchase a car with a total cost of 450,000.
He made a down payment of 50,000 and the balance payable
in 24 monthly installments. If the effective interest rate is 12%
for each year computed on the total balance to be paid by
installment. How much would each installment payment be?
Solution:
Monthly installment:
Interest rate per month = i = (1 + r/M)M – 1
0.12 = (1 + r/12)12 – 1
r/2 = 0.00949 or 0.949% per month
Solution:
P = A (P/A,1%,48)
= 3,600 (37.9740)
= 136,706.40
Solution:
D’ = CF / (p – cv)
= 40,500 / (55 – 22)
= 1,227.27
= 1,228 blocks
Solution:
A = F (A/F,18%,10)
= 825,000 (0.0425)
= 35,062.50
Solution:
Solution:
P = A (P/A,15%,10)
= 20,000 (5.0188)
= 100,376
Solution:
d = (B – SV) / N
= (500,000 – 40,000) / 10
= 46,000
d6 = 46,000 (6)
= 276,000
Solution: