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The Engineering Economic Examination Questions for the Foreign Civil

Engineering Students (1st term of 2020-2021 school year) (Paper A)

Section Section I Section 2 Section 3 Total

Points
Points Judge

Section I:

1. PLEASE Draw a cash-flow diagram

Investment at the beginning $10,000

Uniform annual revenue for 4 years $5000

A market value at end of year 4 $1,000

Annual expenses at each end of year for 4 years $2,500

2. Future Value of a College Degree:

What is future compound amount (F) of this extra income?__________

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A college degree is worth an extra income $30000

Annual interest rate i 10%

Your working years N 40

Section 2:

3. Evaluation of New Equipment Purchase Using PW, AW and FW

FIND Is this proposal a sound one？

Equipment Purchase price $25,000

Market Value at the end of 7 years $8,000

Increased productivity per year $5,000

Firm’s MARR 12%

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4. Find: Which alternative should be selected?

F1 F2 F3 F4

Capital Inv. $24,000 $30,400 $49,600 $52,000

Total expen. $31,200 $29,128 $25,192 $22,880

Useful lives 6 years, MARR 20%

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5. Find: When using Incremental Analysis:

According to the tables below Which alternative should be selected? ________

And Please use another method to verify your answer.

A B C D E

Capital Inv. $900 $1500 $2500 $4000 $5000

Annual Rev. $150 $276 $400 $925 $1125

IRR 10.06%

Useful life 10 years

MARR 10%

A B C D E

IRR 10.6% 13.0% 9.6% 19.1% 18.3%

Increment A △(B-A) △(D-B) △(E-D)

IRR△ 10.6% 16.4% 22.6% 15.1%

Note: use another method to evaluate which alternative should be selected.

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Section 3:

6. Briefly summarize what you have learned from “Engineering ecomomy”. (150-

200 words)