Mastering Engineering Economics: Key Assignment Insights
School
Addis Ababa University**We aren't endorsed by this school
Course
ENGINEERIN I
Subject
Industrial Engineering
Date
Dec 11, 2024
Pages
2
Uploaded by MinisterMask30089
Engineering Economics Assignment 1.Using an 8% discount rate, what uniform series over five periods, [1,5], is equivalent to the cash flow given in Figure 1. 2.For what interest rate are the two cash flows shown in Figure 2 equivalent? 3.Mr. John purchases a pizza shop for $120,000. Its operation will result in a net income of $15,000/Yr for the first year, increasing by $2,000 each year after year 1. At the end of the fifth year, the shop is sold for $155,000. Draw the cash flow diagram for this project. 4.A credit card company announces that its interest rate is 1.5% per month. What is the corresponding effective annual interest rate? 5.Your local bank has a promotional saving program that pays an interest rate of 6% per year compounded monthly. If you deposit $1,000 on January 1 in this bank, how much will you have in your account at the end of year 1 and year 2? 6.Define and clarify with examples a.Nominal interest rates and b.Effective Interest rates
Engineering Economics Assignment 7.An individual wants to start a small-scale painting business. To economize the start up business, he decides to purchase some used painting equipment. He has two mutually exclusive options, which he expects to fold up the business in three years, •Do most of the painting by himself by limiting his business to only residential painting jobs (B1) or •Purchase more painting equipment and hire some helpers to do both residential and commercial painting jobs that he expects will have a higher equipment cost, but provide higher revenue as well (B2). Given the cash flow for the mutually exclusive alternatives presented below using present worth analysis which project would he select at MARR=10%. nB1B20 -$3,000 -$12,000 1 1,350 4,200 2 1,800 6,225 3 1,500 6.330 8.Consider the following three sets of mutually exclusive alternatives. •Which project would you select based on rate of return on incremental investment, assuming that MARR=15%? nD1D2D30 $2,000 $1,000 $3,000 1 1,500 800 1,500 2 1,000 500 2,000 3 800 500 1,000