Individual Assignment on Engineering Economics

Due date Jan15, 2023

1. Compute the value of P for the accompanying cash flow diagram.

Assume i = 12%.

2. Consider the cash flow stream shown in the Figure below and compute
the equivalent present worth for this mixed-payment series at an interest
rate of 15%.

3. If you desire to withdraw the following amounts over the next five years
from a savings account that earns 7% interest compounded annually.
How much do you need to deposit now?

Year Amount (Birr)

2 20,000
3 30,000
4 60,000
5 80,000

4. The maintenance expense on a water pumping station is expected to be

$800 during the first year and to increase $150 each year for the
following ten years. What present sum of money should be set aside now
to pay for the required maintenance expenses over the ten-year period?
(Assume 12% compound interest per year.)
5. Table below shows the cost and benefit data on present value basis for six
hypothetical projects. Find the best alternative using incremental B-C
ratio analysis.

Project

A B C D E F

Benefit ($ Million) 3.0 11.0 12.0 17.0 19.0 19.0

Cost ($ Million) 5.0 7.0 10.0 12.0 16.0 19.0