Republic of the Philippines EXAM 1

MATHEMATICS
University of Eastern Philippines
ECONOMY AND
College of Engineering PROBABILITY
CIVIL ENGINEERING DEPARTMENT Prepared by:
University Town, Northern Samar Engr. JONATHAN C. BULAGAO

PROBLEM 1 A sum of money is deposited now in a savings account.

The revenue R from selling x number of computer The effective annual interest rate is 12% and interest is
boards is given as R = 60 x and the cost C of producing compounded monthly. How much money must be
them is given by C = 50x + 5000. Find how many deposited to yield P500.00 at the end of 11 months.
boards must be sold to break-even and how much money a. P153.00 c. P446.00
is needed to produce the break-even number of boards. b. P144.00 d. P451.00
a. 500, P30,000 c. 500, P5,000 PROBLEM 8
b. 400, P30,000 d. 500, P3,000 The hire of any person to do whatever work he is skilled
PROBLEM 2 in doing:
Toyota Motors makes and sells certain automobile parts. a. promotional cost c. salary cost
Present sales volume is 500,000 units a year at a selling b. material cost d. labor cost
price of P0.50 per unit. Fixed expenses are P80,000 per PROBLEM 9
year. Compute the present break-even point in pesos. When using net present worth calculations to compare
a. P0.49 c. P0.16 two projects, which of the following could invalidate the
b. P0.25 d. P1.10 calculations?
PROBLEM 3 a. non-conventional cash flows
The Asian Transmission Co. makes and sells certain b. mutually exclusive projects
automotive parts. Present sales volume is 500,000 units c. evaluation over different time periods
a year at a selling price of P0.50 per unit. Fixed expenses d. difference in the magnitude of the projects
total P80,000 per year. Determine the present total profit PROBLEM 10
for a year. A bank offers 0.5% effective monthly interest. What is
a. P160,000 c. P180,000 the effective annual rate with monthly compounding?
b. P170,000 d. P190,000 a. 6.2% c. 7.2%
PROBLEM 4 b. 6% d. 7%
A firm has the capacity to produce 1,000,000 units of PROBLEM 11
product per year. At present, it is able to produce and The cost of producing a certain commodity consist of
sell 600,000 units yearly at a total income of P720,000. P45.00 per unit for labor and material cost and P15.00
Annual fixed costs are P250,000 and the variable costs per unit for other variable cost. The fixed cost per month
per unit is P0.70. Determine the number of units that amounts to P450,000. If the commodity is sold at
should be sold annually to break-even. P250.00 each, what is the break-even quantity?
a. 400,000 c. 60,000 a. 2014 c. 2589
b. 500,000 d. 70,000 b. 2178 d. 2367
PROBLEM 5 PROBLEM 12
A savings association pays 1.5% interest quarterly. What An equipment having a first cost of P450,00 has a life
is the effective annual interest rate? expectancy of 10 years with a final salvage value of
a. 7.85% c. 6.55% P80,000. Using the double declining balance method,
b. 8.55% d. 6.14% what is the book value after 6 years?
PROBLEM 6 a. P117,964.80 c. P184,320.00
A sinking fund consists of 15 annual deposits of b. P147,456.00 d. P230,400.00
P1,000,000 each, will interest earned at the rate of 4% PROBLEM 13
compounded annually. What is the principal in the fund Determine the equal payment series future worth factor
at its terminal date? of an annuity of P15,000 per year for 25 years at 18%
a. P25,115.00 c. P29,546.37 interest annually.
b. P20,023.59 d. P28,105.00 a. 0.786 c. 342.6
PROBLEM 7 b. 1.389 d. 167.21

1
 Republic of the Philippines EXAM 1
MATHEMATICS
University of Eastern Philippines
ECONOMY AND
College of Engineering PROBABILITY
CIVIL ENGINEERING DEPARTMENT Prepared by:
University Town, Northern Samar Engr. JONATHAN C. BULAGAO
PROBLEM 14 PROBLEM 20
A house and lot costing P2 million was bought at a An equipment is bought at P420,000 with an economic
downpayment of P500,000 and P1 million after one life of 6 years and a salvage value of P50,000. The first-
year. The remaining balance will be paid at the end of year depreciation is P105,714. The cost of money is 12%
the third year. If the interest rate is 24% compounded per year. What method of depreciation was used?
semi-annually, what is the required payment? a. straight-line method c. SOYD method
a. P1,432,876 c. P1,274,324 b. sinking fund method d. declining balance
b. P1,763,985 d. P1,387,215 PROBLEM 21
PROBLEM 15 An equipment costing P200,000 has an estimate scrap
A contractor can buy trucks for P800,000 each or rent value of P25,000 at the end of its economic life of 10
them for P1,200 per truck per day. The truck has a years. Using the Double-declining balance method of
salvage value of P100,000 at the end of useful life of 5 depreciation, what is its book value after eight years of
years. The annual maintenance cost is P20,000 per truck. service?
Using the annual-cost method and 14% interest rate, a. P33,554 c. P34,758
determine the number of days per year that each truck b. P32,952 d. P35,712
must be used to warrant its purchase. Use sinking fund PROBLEM 22
method of depreciation. A shoes factory has a production capacity of 9000 units
a. 187 c. 155 per month. The fixed and variable cost are as follows:
b. 177 d. 199 Fixed monthly operating cost = P800,000; Material and
PROBLEM 16 labor cost = P200.00 per units and selling price per unit
What is the difference between the sums an annuity due = P500.00. What is the profit per month if the factory
and an ordinary annuity for the following data: has an efficiency of 80%?
Periodic payment P14,000 a. P1,450,000 c. P1,280,000
Term 16 years b. P1,360,000 d. P1,540,000
Interest Rate 10% compounded quarterly SITUATION 1
Payment Interval 3 months An investment of P2,500 is made at the end of each year
a. P58,598 c. P61,763 with interest of 2.5% compounded annually.
b. P53,992 d. P67,042 23. Determine the equal-payment series compound-
PROBLEM 17 amount factor after 8 years.
Cost of machine = P140,000; useful life = 8 years; a. 8.412 c. 9.632
salvage value P10,000. Determine the 4 th year b. 10.578 d. 8.736
depreciation using the double declining balance method. 24. Determine the total amount of the investment after 8
a. P14,765 c. P16,182 years.
b. P17,312 d. P15,634 a. P23,863.12 c. P22,456.21
PROBLEM 18 b. P25,768.98 d. P21,840.29
Terms of sales: P60,000 payable in 60 days or P57,500 25. How long will it take for the investment to amount to
payable in 15 days. Find the equivalent annual rate of P59,865.00?
simple interest if paid in 60 days. a. 17 c. 19
a. 22.5% c. 24.7% b. 14 d. 22
b. 34.8% d. 32.9%
SITUATION 2
PROBLEM 19 An ordinary annuity has a nominal interest rate of 6%
Find the present value of an annuity of P20,000 payable compounded semi-quarterly for 8 years.
annually for 8 years, with the first payment at the end of 26. What is the present worth factor?
10 years, if money is worth 5%. a. 50.68 c. 48.72
a. P79,354 c. P83,325 b. 45.36 d. 40.54
b. P77,451 d. P81,424
27. What is the sinking fund factor?
2
 Republic of the Philippines EXAM 1
MATHEMATICS
University of Eastern Philippines
ECONOMY AND
College of Engineering PROBABILITY
CIVIL ENGINEERING DEPARTMENT Prepared by:
University Town, Northern Samar Engr. JONATHAN C. BULAGAO
a. 0.01102 c. 0.01223 a. P1,123,985.34 c. P1,357,063.84
b. 0.01962 d. 0.01536 b. P1,543,872.54 d. P1,762,982.23
28. What is the capital-recovery factor? 36. With a down payment of P100,000 and monthly
a. 0.01973 c. 0.02833 interest of 1.5%, what is the monthly amortization of the
b. 0.02563 d. 0.02179 car after 5 years?
PROBLEM 29 a. P11,565.20 c. P10,764.43
An equipment costing P60,000 have book value of b. P12,546.87 d. P9,765.34
P4,000 after 8 years. Find the constant percentage of the SITUATION 5
declining book value. Given the following data for two equipment A and B:
a. 22.36% c. 21.87% A B
b. 28.72% d. 25.36% First Cost P50,000 P150,000
PROBLEM 30 Salvage Value P2,000 P6,000
Determine the annual cost of a structure that requires Annual Maintenance P6,000 P3,000
P15M to build with a salvage value of P2M after 12 Economic Life` 5 15
years, if interest rate is 6%. The maximum rate of return for both equipment is 12%
a. P1,856,324 c. P1,670,601 per annum. Use sinking fund method of depreciation.
b. P2,025,547 d. P1,532,025 37. Determine the annual cost of A.
a. P23,878 c. P21,456
SITUATION 3
b. P19,556 d. P18,456
An equipment has a salvage value of P1 million at the
end of 50 years. The straight-line depreciation charge is 38. Determine the present worth of B.
P2 million. a. P176,389 c. P189,345
31. What is the first cost of the machine? b. P2123,783 d. P169,336
a. P105 million c. P103 million 39. What is the rate of return for the additional initial
b. P101 million d. P110 million investment on equipment B?
32. What is its book value after 25 years? a. 6.69% c. 10.23%
a. P51 million c. P49 million b. 8.65% d. 12.89%
b. P55 million d. P45 million
33. At what year will its total depreciation be P30
million?
a. 10 c. 18
b. 14 d. 15
SITUATION 4
The purchase of a new car requires P100,000 down
payment, P300,000 after two years, and P600,000 after
five years. The interest rate is 18% compounded
monthly?
34. What is the present worth of car?
a. P555,440.76 c. P435,982.12
b. P645,982.43 d. P782,123.23
35. What is the lump sum value of the car if paid after 5
years?