NAME:____________________
SID:___________________________
GENG-3130 (sec 60) Engineering Economics
Tutorial Assignment #3
Due: 12PM, October 6, 2022 (submission through Blackboard only, no e-mail submission)
Problem #1: For the following cash flows, (receipt of 10,000 at t=0; payment of 50,000 at t=1; receipt
of 50,000 at t=3; and receipt of 30,000 at t=5), various interest rates are applied: 4% for year 1; 6%
for years 2 and 3, and 5% for years 4 and 5. Find the equivalent net value at t=5, i.e., F5=?
F5=?
50,000
4%
6%
1
0
6%
5%
4
2
5%
5
3
10,000
30,000
-50,000
Problem #2: You want $50,000 six years from now for a new car, and your grandparents offer to
give you $15,000 now. A part-time job will allow you to make six additional deposits, one at the end
of each year. If the bank pays 5% interest (compounded annually), how large must your annual
deposits be?
50,000
15000
Annual=?
TAs on duty: Mohajernia, Bita
NAME:____________________
SID:___________________________
Problem #3: A French software genius had been offered €15,000 per year for the next four years
and then €25,000 per year for the following 15 years for the rights to his new smart phone app. At
5% interest, how much is this offer worth today?
Problem # 4: A new wave-soldering machine is expected to save Brisbane Circuit Boards $15,000
per year through reduced labour costs and increased quality. The device will have a life of eight (8)
years, and have a salvage value of $20,000. at the end of the 8th year (salvage value means the used
machine can be sold in the open market). If the company can generally expect to get 12% return on
its capital, how much could it afford to pay for the wave-soldering machine?
TAs on duty: Mohajernia, Bita