12 Quest,ion tsank , l,)ngirrccrirrg lrl<:onomics by Jairno lt.

Tiong Present, Economy 13

Cost of Project = Total cost + contingency

Cost of Project = 1050000 + 157500
' An 8-meter wide concrete road pavement s00 meters long is desired to
be
Cost of Project = P 1,207'500
constructed over a well-compacted gravel road, together wii-h the necessary
concrete curbs and gutters on both sides. ln orderio put the subgrade on The project will cost P 1,207,500.
an
even level grade, a 500 cubic meters of sand fiiling is nece"."ry,-or"i *hich
the
10-inch concrete pavement will be placed?

Assume the following data: - en etectric utility purchases 2,300,000 kw-hr per month of electric energy from
National Power Cbrporation at P 2.OO per kw-hr and sells all this to consumers
4 Sand fill, including rolling and watering = p 100 per cubic meter per kw-hr should
a-fteiJeOucting distribution loss es of 2OYo. At what average rate
B. concrete pavement, 10 inches thick (iabor and materials) including currng
tnii be-sold to break even if the following are other monthly expenses in
= P 220 per sq. meter "n"rgy
Ite operation:
C. Curbs and gutters = p 12 per linear meter
Taxes 2.5Yo of qross revenue
How much will the project cost allowing 15yo for contingency? P 750,000
Salaries
lleoreciation P 2.250.000
A. P 1,207,000
lnterest P 700,000
B. P 1,207,500
P 300,000
c. P 1,208,000 Maintenance
P 200.000
Miscellaneous

A. P 4.90
"V.ur.r- B. P 5.20
c. P 5.90
Let Cr = cost of sand filling, rolling and watering D. P 6.30
Cz = cost of curbs and gutter (both sides)
Co = cost of concrete pavement
,'/,/nt n.

Let x = rate per kw-hr of energy sold to consumers

",=[#)('oom3)
Cr = P50,000 Solving for ExPenses:

P1 -nr;
.,=[T)(soomtz) AmountpaidtoNPc=[, )1r.ooooo**
1kw - hr /'
Cz = P120,000 = 4600000

With 20% losses, only 80% is sold to consumers'

., =[TP)(soom[am)
Totalnumber of kw - hr sold = 0.80(2300000)
Ca = P880,000 = 1840000 kw - hr

Total cost = C1 + Q2 + Q. Taxes = 0.025(1 8a0000)(x)

Total cost = 50000 + 120000 + BSOOOO = 46000x
Totalcost=P1,050,000
+
Total expenses = Amt. paid to NPC + Taxes-+ Salary + Depreciation
Contingency = 0. 1 5(1 050000) lnterest + Maintenance + Miscellaneous
Contingency = P 157,500