Kingdom of Saudi Arabia
Ministry of Higher Education
Majmaah University
College of Engineering
Department: Mechanical and Industrial Engineering
Exam Information: QUIZ-I
I QUIZ
GE 407
Course Title:
Engineering Economy
Dr. Chandra
278
Exam date:
13 Sept. 2015
From:
11 :30 To: 12:00 PM
Course code:
Instructor:
Section numbers:
Exam time:
Exam hall:
Number of pages:
Total score:
Topic from syllabus:
10 Points
ABET outcome:
a
Engineering economic decision, cash
flow diagram, Economic equivalence
Student’s Information
Name:
ID:
Exam Instructions:
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Read the questions carefully and several times. Writing clearly will make it possible to
assess your answers correctly.
Any form of cheating, intention to cheating, or disruption of the exam will subject you to
a disciplinary action as specified by the university’s regulations.
Carrying or using the mobile phone during the exam is not allowed. Using the phone
during the exam will carry a disciplinary action.
The calculator is only permitted by the exam supervisor.
No student can leave the exam room during the first half hour of the exam. Any student
coming after the first half hour of the exam will not be permitted to enter the exam.
A student leaving the exam, even for legitimate reasons, may not be given a makeup
exam.
Points Earned:
Question
1
Score
Question
2
Score
Total score in the exam:
Dear student, we encourage you to answer the exam the best you can and we wish you all success.
Q.1
An industrial organization is planning to generate revenue through selling designs. It is expected
that a total of 200,000 SR will be deposited till the end of next year. The collection will increase by
100,000 SR each year for the next 9 years.
Required:
i)
Draw cash flow diagram and Calculate
i.
What is the equivalent present worth of money collected
ii.
What will be the equivalence of money at the end of 10 years from now.
Given i@ 10% compounded annually.
Q2. A project is planned to make initial investment of 30,000 SR. The maintenance cost at year 3 begins
with 5,000 SR, then 5,500 SR for year 4, followed by 6,050 SR, 6,655 SR for the years 5 and 6 respectively.
The revenue from the sales of products is expected 50,000, in year 3, 60,000 in year 4 , 70,000 in year 5
and continues with same arithmetic gradient till the end of year 10. The salvage value is 10000SR.
Required:
Draw cash flow diagram
What is the present value of the project?
Q3. The cash flow diagram given below fig Q3.1 is equivalent to cash flow diagram shown in fig. Q3.2.
70 SR
50 SR
0
1
2
3
4
5
6
7
8
9
Fig Q3.1
x
0
1
2
3
4
5
6
Fig. Q3.2.
Required : Find present value for the cash flow diagrams (Fig Q3.1)
What is the value of X?
7
10
11