Reference no: EM132855247

Engineering Economics Questions -

Q1. An employee of the central government is using a car which is eight years old. It can be sold now at Rs. 2.26 lakhs or can be kept for another seven years. In that case the annual operation and maintenance cost will be Rs. 0.34 lakhs, one-time expenditure of Rs. 0.31 lakhs after 3 years and a salvage value of Rs. 0.8 lakh at the end of 7th year. What is the annual worth of the existing car at 8% rate of interest?

Q2. A city corporation is considering a waste disposal system in which wet waste will be converted into manure and dry wastes will be sold for recycling to an ancillary unit. Setting up the wet waste treatment yard will have an initial expenditure of Rs. 9402.44 lakhs, an annual operation and maintenance cost of Rs. 118.5 lakhs and Rs. 282.12 lakhs salvage value after 20 years. Annual revenue from the sale of manure is expected to fetch Rs. 130.72 lakhs and proceeds from the sale of dry waste to the ancillary unit is expected to yield Rs. 279.33 lakhs. What is the conventional benefit-cost ratio at 8% interest?

Q3. A company must decide whether to provide their employees with company-owned vehicle or to pay the mileage allowance for their travel from residence to workplace and return. New automobiles would cost about Rs 921.26 lakhs and could be sold five years later for about Rs 398.72 lakhs. Annual operating costs would be Rs. 48.04 lakhs per year and a variable cost of Rs 0.0021 lakh per kilometre. Alternatively, the company will have to pay Rs. 0.0413 lakh per kilometre if it chooses to pay the mileage allowance. Assuming an 8% effective annual interest rate, what is the breakeven between the alternatives.

Q4. An employee of the central government is using a car which is eight years old. A suitable replacement is available at Rs. 7.63 lakhs, annual operation and maintenance cost of Rs. 0.15 lakhs, one-time expenditure of Rs. 0.65 lakhs at the fifth year and salvage value of Rs. 2.59 lakhs at the end of 10th year. what is the annual worth of the new car at 8% rate of interest?

Q5. An employee of the central government is using a car which is eight years old. It can be sold now at Rs. 2.26 lakhs or can be kept for another seven years. In that case the annual operation and maintenance cost will be Rs. 0.34 lakhs, one-time expenditure of Rs. 0.31 lakhs after 3 years and a salvage value of Rs. 0.8 lakh at the end of 7th year. What is the annual worth of the existing car at 8% rate of interest?