Rizal Technological University

Electronics Engineering Review

TE1: Review in General Engineering and Applied Sciences
EVALUATION EXAM 5: ENGINEERING ECONOMY

NAME: ______________________________________________ BLK: ____ DATE: _____________ RATING: ______________

Problem Solving: Show your solutions systematically. Write your final answer to the space provided.

1. Determine the exact simple interest on P5, 000 for the period from Jan.15 to Nov.28, 1992, if the rate of interest is 22%.
P955.74

2. By the condition of a will the sum of P25, 000 is left to be held in trust by her guardian until it amounts to P45, 000. When will the girl receive
the money if the fund is invested at 8% compounded quarterly?
7.42yrs

3. An amount of P1,000 becomes P1,608.44 after 4 years compounded bimonthly. Find the nominal interest.
12.00 %
4. An investor has an option to purchase a tract of land that will be worth P20,000 in seven years. If the value of the land increases at 9% each
year, how much should the investor be willing to pay now for this property?
P10,941
5. At a certain interest rate compounded semiannually P5, 000 will amount to P20, 000 after 10 years. What is the amount at the end of 15 years?
P40,000
6. At the end of each year, a worker invests $2,000 into an account the draws 4% interest. The worker makes every payment for the next 30 years
except for the payment at the end of year 10. That is, no money is invested at the end of year 10. How much money will be in the account at the
end of the 30 years?
107,787.63
7. On a piece of equipment, it is estimated that the service expense will be as follows:

What is the equivalent uniform annual maintenance cost for the machinery if the interest rate is 4%?

396.08

8. Determine the two equal deposits, the first deposit required now and the second deposit at the end of year 6, so that you can withdraw $2,000 at
the end of each year for the next 12 years. Assume that money can earn 4% interest, compounded annually.
10, 484
9. Suppose that you make 12 equal annual deposits of P2,000 each into a bank account paying 8% interest per year. The first deposit will be made
one year from today. How much money can be withdrawn from this bank account immediately after the 12 th deposit?
37,954
10. A man bought an equipment costing P30,000 payable in 12 quarterly payments, each installment payable at the beginning of each period. The
rate of interest is 24% compounded quarterly. What is the amount of each payment
P3,375.76
11. What is the future worth of P600 deposited at the end of every month for 4 years if the interest rate is 12% compounded quarterly?
P36, 641.00
12. What is the future worth of P600 deposited at the end of every month for 4 years if the interest is 12% compounded quarterly?
P36, 641.00
13. Mr. Reyes borrows P600, 000 at 12% compounded annually, agreeing to repay the loan in 15 equal annual payments. How much of the original
principal is still unpaid after he has made the 8th payment?
402,042
14. Calculate the capitalized cost of a project that has an initial cost of P3, 000,000 and an additional cost of P100, 000 at the end of every 10 yrs.
The annual operating costs will be P100, 000 at the end of every year for the first 4 years and P160, 000 thereafter. In addition, there is expected
to be recurring major rework cost of P300, 000 every 13 yrs. Assume i =15%.
Given:
Initial Cost (IC) = P3, 000,000
Additional Cost (AC) = P1, 000,000 n= 10 yrs.
Operating Cost (MC)
PA = P 100,000 for the first 4 yrs.
PF =P160, 000 thereafter
 Rework Cost (CR) = P300, 000 n=13 yrs.
P 4,281,934.994
15. The surface area of a certain plant requires painting is 8,000 sq. ft. Two kinds of paint are available whose brands are A and B. Paint A cost P
1.40 per sq. ft. but needs renewal at the end of 4 yrs., while paint B cost P 1.80 per sq. ft. If money is worth 12% effective, how often should
paint B be renewed so that it will be economical as point A?
5.58 years

Depreciation

16. Using Straight Line Method, complete the following depreciation table. 14pts

Year Book Annual Total Book

Value Depreciation Depreciation Value
(BOY) (EOY)
1 P10,000 2000 2000 8000
2 8000 2000 4000 6000
3 6000 2000 6000 4000
4 4000 2000 8000 2000
17. Using Declining Balance Method, complete the following depreciation table.

Year Book Annual Total Book

Value Depreciation Depreciation Value
(BOY) (EOY)
1 P10,000 3312.6 3312.6 6687.40
2 6687.40 2215.26 5527.86 4472.14
3 4472.14 1481.44 7009.3 2990.70
4 2990.70 990.770 8000 2000
18. Using Double Declining Balance Method, complete the following depreciation table.

Year Book Annual Total Book

Value Depreciation Depreciation Value
(BOY) (EOY)
1 P10,000 5000 5000 5000
2 5000 2500 7500 2500
3 2500 1250 8750 1250
4 1250 625 9375 625
19. Using Sinking Fund Method, i=4%. Complete the following depreciation table.

Year Book Annual Total Book

Value Depreciation Depreciation Value
(BOY) (EOY)
1 P10,000 1883.92 1883.92 8116.08
2 8116.08 1883.92 3843.20 6156.8
3 6156.8 1883.92 5880.84 4119.16
4 4119.16 1883.92 8000 2000

Or

Year Book Annual Total Book

Value Depreciation Depreciation Value
(BOY) (EOY)
1 P10,000 1883.92 1883.92 8116.08
2 8116.08 1959.28 3843.20 6156.8
3 6156.8 2037.65 5880.84 4119.16
4 4119.16 2119.16 8000 2000

20. Using SYD Method, complete the following depreciation table.

Year Reverse Book Annual Total Book

Digit Value Depreciation Depreciation Value
(BOY) (EOY)
1 4 P10,000 3200 3200 6800
2 3 6800 2400 5600 4400
3 2 4400 1600 7200 2800
4 1 2800 800 8000 2000
Bonus Questions. 3 pts each

21. A Php 150,000, 8% bond pays dividends semi-annually and will be redeemed at 120% after 5 years. Find the bond value if money is worth 4%
compounded semi-annually?
201,558.20
22. A newly acquired machine requires an annual maintenance cost of P15,000. If the annual maintenance cost increases by 20% each year for 10
years, what is the estimated present worth of the maintenance costs if money is worth 5%?
280, 118.91
23. An arithmetic gradient with series of end of period payments of P10,000 on the first year, P8,000 on the 2 nd year, P6,000 on third year, P4,000
on the fourth year and P2,000 on the 5th year. If interest rate is 2%, what is its present worth?
28, 654.05

END OF EVAL EXAM 5