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    Final Exam Eng Economics 2015

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    Rawaa Mohamed
    This document contains an exam for an engineering economics course. The exam contains 5 questions testing various concepts in engineering economics, including different types of economies, objectives of manufacturing companies, calculating rates of return on investments, break even analysis, depreciation, present value, annual equivalent worth, and payback period. Students are asked calculation and explanation questions about these fundamental economic principles.

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    © All Rights Reserved
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    Final Exam Eng Economics 2015

    Uploaded by

    Rawaa Mohamed
    25 views2 pages
    This document contains an exam for an engineering economics course. The exam contains 5 questions testing various concepts in engineering economics, including different types of economies, objectives of manufacturing companies, calculating rates of return on investments, break even analysis, depreciation, present value, annual equivalent worth, and payback period. Students are asked calculation and explanation questions about these fundamental economic principles.

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    This document contains an exam for an engineering economics course. The exam contains 5 questions testing various concepts in engineering economics, including different types of economies, objectives of manufacturing companies, calculating rates of return on investments, break even analysis, depreciation, present value, annual equivalent worth, and payback period. Students are asked calculation and explanation questions about these fundamental economic principles.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    25 views2 pages

    Final Exam Eng Economics 2015

    Uploaded by

    Rawaa Mohamed
    This document contains an exam for an engineering economics course. The exam contains 5 questions testing various concepts in engineering economics, including different types of economies, objectives of manufacturing companies, calculating rates of return on investments, break even analysis, depreciation, present value, annual equivalent worth, and payback period. Students are asked calculation and explanation questions about these fundamental economic principles.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    ‫المعهد الكندي العالي لتكنولوجيا‬

    ‫الهندسة واإلدارة‬

    Engineering Department Course Name: Engineering Economics


    Industrial Engineering Course Code: IEN 351
    Fall Semester Exam Period: 3 hrs
    Final Exam Total Marks: 50 marks
    Instructor Name: Dr. Mervat Badr No. of Pages: 2 pages

    Question # 1 10 Marks

    1. What are the different types of economy?


    2. What would be manufacturing company’s objectives?
    3. Which of the following 1-year investments has the highest rate of return?
    (a) $12,500 that yields $1125 in interest,
    (b) $56,000 that yields $6160 in interest, or
    (c) $95,000 that yields $7600 in interest .

    4. University tuition and fees can be paid by using one of two plans.
    Early-bird: Pay total amount due 1 year in advance and get a 10% discount.
    On-time: Pay total amount due when classes start.
    The cost of tuition and fees is $10,000 per year.
    (a) How much is paid in the early-bird plan?
    (b) What is the equivalent amount of the savings compared to the on-time payment at the time that
    the on-time payment is made?

    Question # 2 10 Marks

    1. The owner of a manufacturing company is considering whether to produce a new product. The estimate
    of the fixed costs per year is $40,000 and variable costs per unit produced are $50.
    a) If the product is sold at a price of $70, how many units of product does he have to be sold in order to
    break even?
    b) If the company sells 3000 units at the product price of $70, what will be the profit?
    c) If the product can be produced either with the current equipment or with new, more efficient
    equipment that will raise the fixed cost to $60,000 per year, but the variable cost would be reduced
    to $25 per unit. The selling price is still $70 per unit. Is it better to use the current equipment or the
    new one? Specify the volume of demand for which you would choose each process.

    Question # 3 12 Marks

    1. To finance a new product line, a company borrowed $1.8 million at 10% per year interest. If the
    company repaid the loan in a lump sum amount after 2 years, what was?
    a) The amount of the payment
    b) The amount of interest?

    See Next Page

    ‫ا ل م ع ه د ا ل ك ن د ي ا ل ع ا ل ي ل ت ك ن و ل و ج ي ا ا ل ه ن د س ة و ا إل د ا ر ة‬ Page 1
    ‫المعهد الكندي العالي لتكنولوجيا‬
    ‫الهندسة واإلدارة‬

    2. If Laurel made a $30,000 investment in a friend’s business and received $50,000, 5 years later,
    determine the rate of return.

    3. Thompson Mechanical Products is planning to set aside $150,000 now for possibly replacing its large
    synchronous refiner motors whenever it becomes necessary. If the replacement is not needed for 7
    years, how much will the company have in its investment set-aside account, provided it achieves a
    rate of return of 11% per year?

    Question # 4 10 Marks

    1. If interest is compounded at 20% per year, how long will it take for $50,000 to accumulate to
    $86,400?

    2. Why is depreciation considered important to engineering economy?

    3. An asset that is book-depreciated over a 5-year period by the straight line method has BV3= $62,000
    with a depreciation charge of $26,000 per year. Determine:
    a) The first cost of the asset
    b) The assumed salvage value.

    Question # 5 10 Marks

    1. 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 10% per year? Draw the cash flow diagram.

    2. A project has the following costs and benefits. What is the payback period?

    Year Costs Benefits

    0 $1400

    1 500

    2 300 $400

    3 -10 300 in each year

    ‫ا ل م ع ه د ا ل ك ن د ي ا ل ع ا ل ي ل ت ك ن و ل و ج ي ا ا ل ه ن د س ة و ا إل د ا ر ة‬ Page 2

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