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    Gohar Bajwa
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    This document contains 10 questions for an engineering economics assignment. It provides instructions to draw diagrams where necessary, complete the assignment by hand, and notes that late assignments will not be accepted. The questions cover a range of engineering economics topics including alternative selection using net present value, internal rate of return, benefit-cost ratio, and profitability index analyses. The questions involve projects from various industries such as chemicals, electronics, wireless networks, security, and flood control.

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    This document contains 10 questions for an engineering economics assignment. It provides instructions to draw diagrams where necessary, complete the assignment by hand, and notes that late assignments will not be accepted. The questions cover a range of engineering economics topics including alternative selection using net present value, internal rate of return, benefit-cost ratio, and profitability index analyses. The questions involve projects from various industries such as chemicals, electronics, wireless networks, security, and flood control.

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    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd
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    365 views3 pages

    Assignment 4

    Uploaded by

    Gohar Bajwa
    This document contains 10 questions for an engineering economics assignment. It provides instructions to draw diagrams where necessary, complete the assignment by hand, and notes that late assignments will not be accepted. The questions cover a range of engineering economics topics including alternative selection using net present value, internal rate of return, benefit-cost ratio, and profitability index analyses. The questions involve projects from various industries such as chemicals, electronics, wireless networks, security, and flood control.

    Copyright:

    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd
    Flag for inappropriate content
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    of 3

    Department of Mechanical Engineering

    Engineering Economics (Fall-2019)


    Assignment # 4
    Due Date: 04-11-19 (For Section A & C) 05-11-2019 for Section B

    Note:
    1- Draw diagrams to explain the system where necessary.
    2- Do the assignment by hand.
    3- Late assignments will not be accepted.

    Q-1 The tabulation of the incremental cash flows between alternatives A and B is
    shown on the next page. Alternative A has a 3-year life and alternative B a 6-year life. If
    neither alternative has a salvage value, what is (a) the first cost of alternative
    A and (b) the fi rst cost of alternative B?

    Q-2 Chem-Tex Chemical is considering two additives for improving the dry-weather
    stability of its lowcost acrylic paint. Additive A has a fi rst cost of $110,000 and an annual
    operating cost of $60,000. Additive B has a first cost of $175,000 and an annual operating
    cost of $35,000. If the company uses a 3-year recovery period for paint products and a
    MARR of 20% per year, which process is economically favored? Use an incremental
    ROR analysis

    Q-3 Hewett Electronics manufactures amplified pressure transducers. It must decide


    between two machines for a finishing operation. Select one for them on the basis of AW-
    based rate of return analysis. The company’s MARR is 18% per year.

    Q-4 A WiMAX wireless network integrated with a satellite network can provide
    connectivity to any location within 10 km of the base station. The number of sectors per
    base station can be varied to increase the bandwidth. An independent cable operator is
    considering three bandwidth alternatives. Assume a life of 20 years and a MARR of 10%
    per year to determine which alternative is best using an incremental rate of return
    analysis.

    1/3
    Q-5 The five alternatives shown here are being evaluated by the rate of return method.

    (a) If the alternatives are mutually exclusive and the MARR is 26% per
    year, which alternative should be selected?
    (b) If the alternatives are mutually exclusive and the MARR is 15% per
    year, which alternative should be selected?
    (c) If the alternatives are independent and the MARR is 15% per year,
    which alternative(s) should be selected?

    Q-6 From the following estimates, determine the B/C ratio for a
    project that has a 20-year life. Use an interest rate of 8% per year.

    Q-7 Calculate the B/C ratio for the following cash flow estimates at a
    discount rate of 7% per year

    2/3
    Q-8 A project had a staged investment distributed over the 6-year contract period. For
    the cash flows shown (next page) and an interest rate of 10% per year, determine the
    profitability index and determine if the project was economically justified.

    Q-9 The two alternatives shown are under consideration for improving security at a
    county jail in Travis County, New York. Determine which one should be selected, based
    on a B/C analysis, an interest rate of 7% per year and a 10-year study period.

    Q-10 A project to control flooding from rare, but sometimes heavy


    rainfalls in the arid southwest will have the cash fl ows shown below.
    Determine which project should be selected on the basis of a B/C
    analysis at i 8% per year and a 20-year study period.

    3/3

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