NAME:____________________
SID:____________________
GENG-3130 (01 & 02) Engineering Economics
Tutorial Assignment #2
Due: 12PM, Sept. 22, 2023 (submission through Brightspace only, no e-mail submission)
Problem #1: How much should you invest today at 6% interest (compounded monthly) to accumulate
$1,000,000 in 30 years? Perform calculations using the discounting formula.
Discounting Formula: P = F/(1+i)N
Problem #2 (3 pts):
(a) Using straight-line depreciation, what is the book value after 8 years for an asset costing
$500,000 that has a salvage value of $100,000 after 10 years? What is the depreciation charge
in the 8th year?
(b) Using decline-balance depreciation with d=8%, what is the book value after 5 years for an
asset costing $500,000? What is the depreciation charge in the 6th year?
(c) What is the depreciation rate using declining-balance for an asset costing $250,000 and having
a salvage value of $50,000 after 10 years?
TAs on duty (marking): Liu, Yinting; Tian, Jingnan
NAME:____________________
SID:____________________
Problem #3 (2 pts): A machine costs $500,000 and has a planned life of 20 years, with a salvage
value of $100,000 (at the end of 20 years) using straight-line depreciation. What depreciation rate will
result in the same book values, for both the declining-balance and straight-line methods at the end of
year 10?
Problem #4 (3 pts): Based on the following cash flow diagram, compute the equivalent value of these
cash flows at n=5 (yr), using i=10% (annually).
30000
F5=?
20000
10000
0
=
1
2
3
4
5
6
0
-20000
TAs on duty (marking): Liu, Yinting; Tian, Jingnan
1
2
3
4
5
6