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    Engineering Economy: Homework Chap 2

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    Khánh Huyền
    The document contains a student's homework assignments on engineering economy topics. It includes calculations for: 1) Determining the number of cows needed and the annual gasoline cost for a fleet of cars. 2) Calculating profits and losses for various production scenarios. 3) Computing future and present values, loan payments, interest rates, and time periods for loans using financial formulas. 4) Analyzing investments and determining payback periods using annuities and other calculations.

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    Engineering Economy: Homework Chap 2

    Uploaded by

    Khánh Huyền
    15 views4 pages
    The document contains a student's homework assignments on engineering economy topics. It includes calculations for: 1) Determining the number of cows needed and the annual gasoline cost for a fleet of cars. 2) Calculating profits and losses for various production scenarios. 3) Computing future and present values, loan payments, interest rates, and time periods for loans using financial formulas. 4) Analyzing investments and determining payback periods using annuities and other calculations.

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    Engineering economy

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    The document contains a student's homework assignments on engineering economy topics. It includes calculations for: 1) Determining the number of cows needed and the annual gasoline cost for a fleet of cars. 2) Calculating profits and losses for various production scenarios. 3) Computing future and present values, loan payments, interest rates, and time periods for loans using financial formulas. 4) Analyzing investments and determining payback periods using annuities and other calculations.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    15 views4 pages

    Engineering Economy: Homework Chap 2

    Uploaded by

    Khánh Huyền
    The document contains a student's homework assignments on engineering economy topics. It includes calculations for: 1) Determining the number of cows needed and the annual gasoline cost for a fleet of cars. 2) Calculating profits and losses for various production scenarios. 3) Computing future and present values, loan payments, interest rates, and time periods for loans using financial formulas. 4) Analyzing investments and determining payback periods using annuities and other calculations.

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    of 4

    Engineering economy

    Name: Trần Võ Khánh Huyền

    ID: IELSIU18265

    HOMEWORK CHAP 2:

    2-2)

    Variable
    Fixed cost
    cost
    Raw materials x
    Direct labor x
    Depreciation x
    Supplies x
    Utilities x x
    Property taxes x
    Interest on borrowed
    x
    money
    Administrative salaries x
    Payroll taxes x x
    Insurance (building and
    x
    equipment)
    Clerical salaries x
    Sales commissions x
    Rent x
    2-3)

    a) We have: 1000000 miles/year = miles/day # cows?

    15 miles/day 1 cow

    # cows = cows

    We have: 60 miles/day $5

    miles/day $x

    x= => Annual cost = x /year

    b) We have: 30 miles 1 gallon

    1000000 miles x gallons

    x= gallons

    We have: 1 gallon $3
    gallons cost

    Cost = /year

     The gasoline-fueled car cost $100000 – $83333.33 = $16666.67/year more than a fleet of
    car.

    2-7)

    If the value of re-machining option ($60000) is reasonably certain, this option should be chosen.

    If the management is highly risk advance, the second option is recommended

    2-12)

    We have: D = (2000 – p) / 0.1 => a = 2000, b = 0.1

    TR = aD – bD2 = 2000D – 0.1D2

     D = 10000 units/month

    What are needed to maximum profit is fixed cost per month and variable cost per lash adjuster.

    2-18)

    a) Profit = TR – TC = pD – (Cf + cvD) = 1 x 20000 x 2000 – (17000000 + 20000000) = $3000000

    b) Production is 17000 tons/year

    Profit = TR – TC = pD – (Cf +cvD) = 1 x 17000 x 2000 – (17000000 + 20000000) = -$3000000

     Profit = 0. Therefore, the mine will not be profitable.

    2-25)

    Cf = $200000/year Cv = 60% x 300000 = $180000

    Profit (Loss) = TR – TC = 300000 – (200000 + 180000) = -$80000 => Choose (d) ($80000) loss

    2-28)

    The cost increases to $0.15 per kWh and the cost of insulation quadruples

    ( )

    R11 R19 R30 R38


    A. Investment cost $2400 $3600 $5200 $6400
    B. Annual heating load
    74 x 106 69,8 x 106 67,2 x 106 66,2 x 106
    (Btu/year)
    C. Cost of heat loss per
    $3252,3 $3067,71 $2953,44 $2909,49
    year
    D. Cost of heat loss over 25
    $81307,5 $76692,75 $73836 $72737,25
    years
    E. Total life cycle cost (A +
    $83707,5 $80292,75 $79036 $79137,25
    D)

     Choose R30

    2-30)

    Total extra cost = ( )

    2-44)

    a, False b, False c, True d, False e, True f, True

    g, False h, True i, True j, False k, True l. False

    m, True n, True o, True p, False q, False r, True

    s, True

    HOMEWORK CHAPTER 4:

    4-2)

    I = (P)(N)(i) = $1000 x x 0.06 = $103.92

    So, the future equivalent after years is: 1000 + 103.92 = $1103.92

    4-4)

    Simple interest: I = (P)(N)(i) = 0.05Pi

    Compound interest: I = P –P=P –P

    We have: I / I I<I
    – –

    Therefore, the simple interest is less than the compound interest.

    4-8)

    A = P(A/P, i%, N) = 10000* + = $2374

    So, annual equal loan payment (annuities) is $2374

    Amount owed Interest Principal


    Year Annuities
    at begin of year payment payment
    1 10000 600 1774 2374
    2 8226 493,56 1880,44 2374
    3 6345,56 380,7336 1993,266 2374
    4 4352,2936 261,1376 2112,862 2374
    5 2239,431216 134,3659 2239,634 2374

    4-9)

    F = A(F/A, i%, N) =

    4-10)

    Loan with 12%: F = P(1 + i)N = 5000(1 + 0.12)5 = $8811.71

    Loan with 8.5$: F = P(1 + i)N = 5000(1 + 0.085)5 = $7518.28

    Difference: $1293.43

    4-12)

    F = P(1 + i)N 1000 = P(1 + 0.09)5 = $649.93

    4-13)

    A = F(A/F, i%, N) =

    4-14)

    A = F(A/F, i%, N) = = 432.61  N = 47 months

    4-24)

    P = -$50000 + $7500(P/A, 7%, 10) = -$50000 + $7500(7.0236) = $2677

    The investment is worthwhile.

    4.30)

    $10000 = $2000000(A/F, 10%, N) = => N = 32 years

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