Faculty : Faculty of Engineering Zagazig University Date : 29 / 12/2020

st
Academic year : 1 . Term 2020/2021 Exam Time : 1 Hour
rd
Course level : 3 Year Design & Prod. No. of Pages : 5
Course Name : Engineering Economy NO. of Questions : 35
Course Code : INE 301 Full Mark : 35
Department : Industrial Engg.. Dept.
Final-Term Exam January 2019
‫االقتصاد اهلندسي للفرقة الثالثة تصميم و إنتاج‬

‫اســــــم الطــــالـب‬

)Username( ‫كود الطالب‬

‫اكتب و ظلل كود الطالب‬

)Username(
Answer key

[1]   [21]      

[2]   [22]      
[3]   [23]      
[4]   [24]      
  [25]      
[5]
   
[6]   [26] 
   
[7]   [27]     
[8]   [28]     
[9]   [29]     

[10]   [30] 
‫تعليمات هامة‬
[11]   [31] 
[12]   [32]  ‫ اكتب اسمك ورقم جلوسك‬-

[13]   [33]  : ‫ استخدم القلم الرصاص فى‬-

[14]   [34]  ‫ كتابة وتظليل رقم الجلوس‬-1
[15]   [35] 
‫ اختيار اإلجابة الصحيحة – ظلل دائرة‬-2
[16]   ‫ التظليل أكثر من دائرة يلغى‬،‫واحدة لكل سؤال‬
[17]   ‫درجة السؤال‬

[18]   ‫ استخدم الممحاة لتعديل اختياراتك‬-3

[19]   ‫ ال تستخدم القلم الكوريكتور نهائيا‬-
[20]  
‫ ال تستخدم القلم الجاف نهائيا‬-

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 1) Under ideal conditions, a picture frame manufacturing facility can produce 480
frames per day. Under normal conditions, the company schedules 135 frames
per day. Current market conditions and production strategy have combined to
limit production to 120 frames per day. If the production manager sets the
effective capacity at 100 frames per day, what is the resulting capacity cushion?
A) 11% B) 26% C) 74% D) none of them
2) A hospital is considering purchasing a new $40,000 diagnostic machine that will
have no salvage value after installation, as the cost of removal equals any sale
value. Maintenance is estimated to be $2,000 per year as long as the machine is
owned. After ten years the radioactive ion source will have caused sufficient
damage to machine components that safe operation is no longer possible and
the machine must be scrapped. The most economic life of this machine is :
A. One year since it will have no salvage after installation.
B. Ten years because maintenance doesn’t increase.
C. Less than ten years but more information is needed to determine the economic life.
D. More than ten years but more information is needed to determine the economic life
3) A company purchased a vehicle for $6000. I will be used for 5 years and its
residual value is expected to be $1000. What is the annual amount of
deprecation using straight line method of depreciation?
A) $1000 B) $2000 C) $3000 D) $3300
4) What is the accumulated depreciation?
A) Sum of all depreciation expenses of a fixed asset B) Depreciation expenses
C) Cost of depletion of assets D) Future value of fixed asset
5) Consider the supply and demand diagram drawn below.

Suppose that demand is initially D1, but, following a change in consumer preferences,
demand shifts to D2. Note that the two demand curves are parallel. Which of the
following statements is TRUE?

a) Demand increases by 30 units. b) Quantity demanded increases by 30 units.

c) Equilibrium quantity increases by 30 units. d) More than one of the above statements is true.

6) A fixed asset was bought for $5000. Its accumulated depreciation is $3000 and
rate of depreciation is 20%. Calculate its depreciation expenses for the current

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 accounting period using reducing balance method?
A) $600 B) $2000 C) $300 D) $400
8) In depreciation calculation, the useful life of a fixed asset is:
A) a certain figure B) an estimate C) a predetermined figure for all fixed assets
D) None of them
9) Depreciable amount + Residual value of a fixed asset =?
A) Depreciation expenses B) Accumulated depreciation
C) Cost of the fixed asset D) Future economic benefits of a fixed asset
10) Cost of a fixed asset – Accumulated depreciation expenses of the fixed asset=?
A) Book value of a fixed asset B) Market value of a fixed asset
C) Historical cost of a fixed asset D) Recoverable amount of a fixed asset
11) XYZ firm has imported a machine from abroad. Which of the following is NOT the element of
machine’s cost? A) Purchase price of machine B) Import duty
C) Demurrage charges D) Refundable tax

12) A company purchased a new machine for $500,000 and machine’s test run was started to make
sure that machine works properly. There was expense of $5000 incurred on test run, however the
sale proceeds of test production were $2000. You are required to find out the total cost of
machine?
A) $500,000 B) $505,000 C) $ 503,000 D) $ 495,000

13) Which of the following fixed assets is not depreciated in the ordinary circumstances?
A) Plant and machinery B) Building C) Land D) Equipment

14) In the calculation of depreciation, all of the following items are actually estimates except:
A) Useful life B) Residual value C) Historical cost D) Salvage value

15) Which of the following accounting concepts or principles require the calculation of
depreciation of the fixed assets?
A) Prudence concept B) Accrual concept C) Consistency concept D) Matching concept
16) A car was purchased for $5500. Its residual value was estimated to be $500 while
its monthly depreciation expenses are $100 using straight line method. Which of the
following is the annual rate of depreciation?
A) 20% B) 24% C) 2% D) 25%
17) Under which method of depreciation the amount of depreciation expenses remains
constant throughout the useful life of a fixed asset
A) Reducing balance method B) Unit of activity method
C) Straight line method D) None of these
18) An increase in the value of fixed asset is referred to as:
A) Depreciation B) Appreciation C) Market capitalization D) Reverse depreciation
19) A fixed asset having book value of $2000 was sold for $1500. Which of the following
is the gain or loss on the sale of fixed asset?
A) $500 gain B) $1500 loss C) $500 loss D) $1000 gain
20) Book value of a fixed asset equals to market value or sale proceeds of a fixed asset

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if:
A) Gain on sale=0 B) Loss on sale=0 C) Gain or loss on sale=0 D) Gain > loss on sale
21) The term ______ is generally used for the depreciation of natural resources
A) Amortization B) Depletion C) Appreciation D) Disposal value
22) Which of the following is a biological asset?
A) Land B) Building C) Environment D) Living plants and animals
23) Items of property, plant and equipment can be recognized as assets when their
cost can be measured reliably and it is likely that the future economic benefits
associated with the assets:
A) Will increase gradually B) Will diminish with the passage of time
C) will flow to the entity D) won’t be available
Questions # 24 and 25
‫ لديك انت واثني عشرر صردي ا‬, ‫بناء على المعلومات المتوافرة لديك عن مشروع المليون ونصف فدان وتم استعراضها بالمحاضرة‬
:‫مبلغ ستة ماليين و نصف جنيه موزعة بالتساوي على افراد المجموعة اجب عنى االسئلة االتية‬
‫ ) أي قطعة أرض يمكن اختيارها لالستثمار ؟‬24
A) ‫ فدان بالمغرة‬230 ‫قطعة أرض‬ B) ‫ فدان بغرب غرب المنيا‬233 ‫قطعة أرض‬
C) ‫ فدان بالفرافرة‬1650 ‫قطعة أرض‬ D) All of them
‫ ) بناء على أي معيار قمت باالختيار ؟‬25
A) Present Value B) Rate of return C) Benefit to Cost Ratio D) All of them
Questions # 26 & 27
Lamia borrows a sum of $5000 from Eng. Shamia and agree to pay the sum plus accrued (‫ )ما يتراكم‬at
the end of fourth year. How much should she pay if:

26) 10% simple interest applies?

A) $ 7001 B) $ 8000 C) $7000 D) $ 7320.5
27) 10% compound interest applies?
A) $ 7001 B) $ 8000 C) $7000 D) $ 7320.5

28) A person deposits a sum of Rs. 20,000 at the interest rate of 18% compounded
annually for 10 years. Find the maturity value after 10 years.
A) Rs. 104,680 B) Rs. 20,000 C) Rs. 204,96 D) Rs. 107,320.5

29) A person wishes to have a future sum of Rs. 1,00,000 for his son’s education
after 10 years from now.
What is the single-payment that he should deposit now so that he gets the
desired amount after 10 years?
The bank gives 15% interest rate compounded annually.
A) Rs. 14,680 B) Rs. 24,720 C) Rs. 24,960 D) Rs. 17,320.5

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30) A person invests a sum of Rs. 5,000 in a bank at a nominal interest rate of 12% for
10 years. The compounding is quarterly. Find the maturity amount of the deposit after
10 years.
A) Rs. 16,310.19 B) Rs. 16,308.91 C) May be A or B D) both A and B

31) When college students leave town for the summer, the demand for meals at the
local restaurants declines. This results in

A) a decrease in equilibrium price and an increase in quantity.

B) an increase in equilibrium price and quantity.
C) a decrease in equilibrium price and quantity.
D) an increase in equilibrium price, and a decrease in quantity.

32) All the following shift the demand curve for automobiles to the right except:

A) the local factory gives a big raise to its employees. B) a brand new automobile
dealership opens in town.
C) the price of gasoline falls. D) None of the Above

33) What happens in the market for airline travel when the price of traveling by rail
decreases? A) The demand curve shifts left. B) The demand curve shifts right.
C) The supply curve shifts left. D) The supply curve shifts right.
34) When a price ceiling is imposed above the equilibrium price,
A) a shortage results. B) a surplus results. C) the equilibrium outcome prevails.
D) there is not enough information to determine the outcome.
35) Which of the following statements about demand curves is TRUE?

I. The “Law of Demand” holds if a consumer’s marginal benefit is lower at higher

quantities consumed than it is at lower quantities consumed.
II. If the consumer’s marginal benefit is the same no matter what quantity is consumed,
then her demand curve will be vertical.
III. All else equal, the marginal benefit of consuming a normal good will be higher for
richer consumers than for poorer consumers.

A) III only. B) I and II only. C) I and III only. D) I only.

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