ECOR3800 Midterm

ECOR3800 Midterm - 1 Name & Student #_SOLUTIONS_...

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1 Carleton University DEPARTMENT OF CIVIL & ENVIRONMENTAL ENGINEERING ECOR 3800A Engineering Economics October 22, 2008 TERM TEST 2008 1 Hour + 20 Minutes (a) Closed Book. (b) One 8.5”x11” single sided crib sheet is allowed. (c) Sheets of selected formulas and tables are provided. (d) Programmable calculators are not allowed. 1(a) A consulting company wants to start saving money for replacement of network servers. If the company invests $4,000 at the end of year 1 and increases the amount invested by 5% per year for the following years, how much will be in the account 4 years from now if it earns interest at a rate of 8% per year? Solution Find P and then convert to F. P = 4000{1 – [(1+0.05) 4 /(1+0.08) 4 }]}/(0.08 –0.05) = 4000{ 3.552} = $14,208.88 F = 14,208.88(F/P,8%,4) = 14,208.88(1.3605) = $19,331.18 1(b) A soil testing company is interested in evaluating two equipment designs. The costs are shown below. Which should be selected at an interest rate of 8% per year? The need
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This note was uploaded on 02/24/2010 for the course ECOR 3800 taught by Professor A.khan during the Winter '08 term at Carleton.

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ECOR3800 Midterm - 1 Name & Student #_SOLUTIONS_...

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