Engineering Economy With Answers
Engineering Economy With Answers
2. Leo has invested Php 1,000.00, part at 5% and 2. A man paid 10% as down payment of Php 200k
the remainder at 10% simple interest. How much is for a house and lot and agreed to pay the balance
invested at higher rate if the total annual interest on monthly installments for 5 years at an interest
from this investment is Php 95.00? rate of 15%, compounded monthly. What was the
Ans: Php 900 monthly installment in pesos?
Ans: Php 42,821.87
3. You borrowed Php 120,000.00 from a friend and
promised to pay 6% simple interest. How much will 3. An investor deposits Php 10,000 at the end of
you pay at the end of 1 year and 6 months? each year in an account which gives a nominal
Ans: Php 130,800 annual interest of 5% compounded continuously.
How much sum will he accumulate in 10 years?
4. A man borrowed from a bank under a promissory Ans: Php 126,528
note that he signed in the amount of Php 60,000 for
a period of one year. He received only Php 50,150 4. An engineer has just borrowed Php 800,000 from
after the bank collected the advanced interest a local bank, at the rate of 1% per month on the
and an additional amount of Php 850 for notarial unpaid balance. His contract states that he must
and inspection fees. What was the rate of simple repay the loan in 36 equal monthly installments.
interest that the bank collected in advance? How much money must he repay each month?
Ans: 17.65% (Disregard this Problem)
2. A contractor can buy dump trucks for 5. An asset is purchased for Php 9,000. Its estimated
Php 800,000 each or rent them for Php 1200 per life is 10 years, after which it will be sold for Php
day. The truck has a salvage value of Php 100,000 1,000. Find the book value at the end of third year
at the end of its useful life of 5 years. The annual if sum-of-the-year’s digit method (SOYDM)
cost of maintenance is Php 20,000. Using the depreciation is used.
annual cost method and 14% interest rate, Ans: Php 5,703
determine the number of days to warrant its
purchase. 6. An equipment costs Php 1,200,000. At the end of
Ans: 199 its economic life of 5 years, its salvage value is Php
300,000. Using sum of the years digit method, what
Situation 1 (3-5) will be its book value on the 3rd year?
A manufacturing plant installed a new boiler at a Ans: Php 480,000
total cost of Php 150,000. It is estimated to have a
useful life of ten years with the scrap value of Php 7. XU purchased new 3D projectors with a total
5,000. Annual maintenance cost is Php 10,000. If worth of Php 618,000. If the equipment is
the interest is 12% compounded annually: depreciated over an eight-year period with
salvage value of 5%, determine the depreciation
3. Determine the equivalent present worth of the charge during the fifth year using declining
annual maintenance cost. balance method.
Ans: Php 83,333.33 Ans: Php 302,189.20
4. Determine the equivalent annual cost of the net 8. A machine has a first cost of Php 73,500 and a
amount required to replace the boiler. salvage value of Php 3,500 at the end of its useful
Ans: Php 8,262.70 life of 8 years. Evaluate the depreciation of the
machine during the 5th year using Matheson’s
5. Determine its capitalized cost. Method (declining balance method).
Ans: Php 302,189.20 Ans: Php 5077
DEPRECIATION
1. A sand mill costs Php 410,000. Salvage value of
the mill is estimated to be Php 60,000 after 20 years.
Find the appraisal or book value of the sand mill
using straight line depreciation method after
10 years.
Ans: Php 235,000
MSTE REVIEW
1. The height of the cone (vertex up) is H. It contains
water to a depth of 2/3H. What is the ratio of the
volume of water to that of the cone? Ans 26:27
HYDRAULICS REVIEW
Situation (1-3)
A vertical gate 0.60 m wide and 1.2 m high is
submerged completely in water with its top edge
flushed with the water surface.