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SEME BRANCH SESSION : Most SUBJECT :PE 7299 ENGINEERING ECONOMY TIME 3 HOUF ULL MARKS: 60 INSTRUCTION : 2. Candidates may attempt any 5 questions maximum of 60 marks. 3. The missing data, if any, may be assumed suitably. 4, Before attempting the question paper, be sure that you have got the correct question paper. 5. Tables/ Data, hand book/Graph Paper etc. to be supplied to the candidates in the examination hall. % The question paper 2 T questions each of 12 marks and total 84 marks. QI. (a) Define Efigineering Economy. What is the role of an Engineer in Engineering Economy? (b) If current ratio is 2.5 and the working capital is Rs. 60,000. Calculate the amount of current assets and Current liabilities. (c) Journalize the following transactions in the book of trader. Debit balance on Sept. 1, 2012: Cash in hand Rs 8,000, Cash at Bank Rs 25,000, Stock of Goods Rs 20,000, Furniture Rs 2,000, and Building Rs 10,000. Sundry Debtors: Vijay Rs 2,000, Anil Rs, 1,000, and Madhu Rs 2,000. Credit Balances on Sep.1,2012: Sundry Creditors: Anand Rs 5,000, Loan fram Bablu Rs 10,000. Following were the further transactions in the month of Sep., 2012: Sep.1 Purchased goods worth Rs 5,000 for cash less 20% trade discount and 5% cash discount. Sep.4 Received Rs 1,980 from Vijay and allowed him Rs 20 as discount. _Sep.6 Purchased goods from Bharat Rs 5,000. Sep.8 Purchased plant from Mukesh for Rs 5,000 and Paid Rs 100 as Cartage for bringing the plant to the factory and another Rs 200 as installation charges. Sep. 12 Sold goods ta Rahim on credit Rs 600. Sep.15 Rahim become an insolvent and could pay only 50 paise in a rupee. Sep.18 Sold goods to Ram for cash Rs 1,000. Sep.20 Paid salary to Ratan Rs 2,000, Sept.21 Paid Anand Rs 4,800 in full settlement. Sep. 26 Interest received from Madhu Rs 200. Sep. 28 Paid to Bablu interst on loan Rs 500. Sep. 30 Sold goods for cash Rs 500. Sept 30 Withdraw goods from business for personal use Rs 200. He Q2. (a) Explain (i) currentiratio (ii) Acid test ratio (ii) Equity rtio (iv) Sunk costs (b) If the variable cost i$ RS. 15 per unit and fixed cost for a specific period is Rs. 4000. The present activity level is 200 units. What will be Total cost of producing 201 units. (CJA cast iron foundry employs 30 persons. t consumers materials worth of Rs. 25,000 and pays ‘workers of the rate of Re 1.00 per hour and in total overhead of 150 hours and paid at double their normal rate. Find (i) the total cost (ii) The man-hour rate of overheds. Assume an 8 hour working day. Q3. (a) Why break even chart is not suitable for comparison of problems involving many parameters. (b) What is a break even chart? Explain with the help of suitable graphical presentation the managerial application break even chart. (c} The fixed: cost for the years 1997-2000 are Rs 8,00,000, variable cost per unit is Rs 30. The stimated sales for the period are valued Rs 24,00,000. Each unit sells at Rs 180. jetermine: i BEP. ii Rs 18,00,000 will be the likely turnover for the next budget period, calculate the estimated contribution and profit. Sj. Ha profit target of Rs 9,50,000 has been budgeted, compute the t over required Q) (4) (61 (2) [4] (6) 2) [4] (6) Q4. (a) Define nominal interest rate and effective interest rate. Is there any relationship between them! (b) What is present worth amount? What are the features which make the present worth amount. suitable for the basis of comparison. {c) A bank gives a loan toa company to purchase an equipment worth Rs. 1,000,000 at an interest rate of 18 FIP P/F FIA AIF ]P7A ‘compounded annually. This amount should be repaid in 15 yearly equal installments installments amount that the company has to pay to the bank. AP [i974 [0.0835 965] DUT | 5.0316 Q5. (a) What is minimum attractive rate of return ( MARR)? (b) What is continuous compounding? What are continuous compounding single sum future worth of Annuity? 0.19977 ga) (©) A company is planning is planning to expand its present business activity. It has two alternatives for the expansion programme and the corresponding cash flows are tabulated below. Each alternatives has a life of five years and a negligible salvage value. The minimum attractive rate of return for the company is 12%. Suggest the best alternative to the company. Initial Investment Yearly revenue ‘Alternative! 500,000 170,000, Alternative -II '800,000 270,000 ‘When n=5 and iis ing ea 0 ied 5 T Rp em [ra fa Tepe “hip —| 0.2638" [ 0.2774 | 0.2913 | 0.2985 [0.3126 0.327 [0.3344 | 0.3418 | 0.3452 OB6AT FiF | 0.6009] 05674 [0.3194 | 0.4972 | 0.4561 0.4190 | o-a019 | 0.3855 [-0:3709 | 0.3417 PIA | 3.7008] 3.60ab_[ 3.351 | 3.3522 | 3.1995 3.0576 | 2.9906 P9780] 2.8636 | 7.7454 Fe [aent | 1.762 [1.925 [2.01 | 2.192 73a6 [2.488 | 2994 2.703 [293 Q6. (a)Define: Marginal cost, Recovery period, Depletion and Salvage value for an asset. (b) Define challenger and Defender, what do you mean by physical impairment and obsolescence? Explain. (c)A Manufacturer finds from his past records that the costs per year associated with a machine with ~ purchase price of Rs. 50,000 are as given below: Determine the optimum policy. Year(n) [1 2 3 4 - 6 c. z ] Maint.cost | 15000 | 16000_| 18000 | 27000. | 25000 | 29000 | 3400040000 Scrap 35000 | 75000 | 17000 | #2000 | 0000 | 5000 | 4000 | 4000 | QZ. (a) Write short note on decision models under uncertainty. {b) What are the different methods employed for calculating depreciation. Explain any one in brief. (c) A machine costing Rs.15,000 has a scrap value of Rs. 5,000 at the end of 10 years of its serviceable {6} life. If the m/c runs for 2,100 hours/yrs. Calculate the depreciation rate per hr of m/c and the total annual depreciation. * 25.11.2013 M" ie) (4) (4) fa {4} (61 2 [4] ia a (2) [4]