CEE 291 Problem Solving Using Computer Tools
Homework 3: Excel and Matlab Intro
Assigned: 2/2/2010
Due: 2/8/2010 by 5:00 pm in the ECOW2 drop box and in the hall box outside 1261 EH.
EXCEL
1. ENGINEERING ECONOMICS
Engineering economics involves a set of principles for comparing alternative, physically feasible
plans/solutions to a problem in order to determine the economically optimal one. Such a
comparison requires that all relevant costs and benefits of alternative plans are comparable;
thus, benefits and cost must be expressed in the same monetary units, and time for realization
of benefits and costs are expressed with discounting techniques using compound interest
expressions. Benefits and costs associated with projects occur at various times (e.g., initial
investment occurs at the beginning, operation and maintenance occur through the project life,
major replacement/rehabilitation occur periodically, benefits typically accrue over time). Three
common discounting formulas are:
(
29
n
i
1
P
F
+
=
 future amount,
F
, from single, initial payment,
P
(
29
(
29

+
+
=
1
i
1
i
1
i
P
A
n
n
 annual
payment amount ,
A
,
to recover initial capital investment,
P
(
29

+
=
1
i
1
i
F
A
n
 annual investment amount,
A
, to accumulate amount
F
with
n
= period of time in years of economic life of project (time beyond when operational cost
exceeds incremental benefits) and
i
= discount (interest) rate, assumed constant over period
(for public works involves a value judgment based upon maximizing social welfare and may be
based upon a market rate for risk free investment and allows only slow change in the rate).
Applications –
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View Full Documenta) To pay for one year of school, a student borrows $12,000 from the government. The money
must be repaid in 20 years with annual payments at an interest rate of 3%. Determine the
student’s required annual payment.
b) Two alternatives, A and B, are being considered for a new section of an aqueduct that
transports water from a reservoir to a community. Both alternatives have the same flow
capacity. Plan A uses a tunnel, while plan B uses a section of lined canal and a section of steel
flume. The initial and maintenance costs and economic life for each plan and its components
are shown in the table. Assuming a constant interest rate of 4% over the 100 year project life,
compare both alternatives on the basis of annual costs and on the basis of present worth of
costs.
Plan
Facility type, Initial Cost, life expectancy, yrs
Annual Maintenance Cost
A
Tunnel, $450,000, 100 yrs
$4,000
B
Canal, $120,000, 100 yrs
Canal lining, $50,000, 20 yrs
Flume, $90,000, 50 yrs
$10,500
2. Exam problem from a previous semester –
A rigid, tower footing that is 10 ft square will carry a 500 ton load and be placed 5 ft below the
ground surface in a dense sand layer that extends from the ground surface to 30 ft below the
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 Spring '10
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