che374-2008-midterm-solutions

che374-2008-midterm-solutions - C HE374 E ngineeringconomic...

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CHE374 - Engineering Economic Analysis Midterm Test, October 22,2008 Name: S0l'0TtoNe Student Number: Question Number Marks I 5 2 5 3 lo 4 ,6 5 5 6 d Total 45 Answer all questions, Please write your final answer in pen. Aids allowed: Calculator, textbook, class notes, personal notes. Page L of9
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Question #1 (5 marks) A chair ala fumitwe store has apdoe of$1000 The advertisement reads "Don't pay acentfor tn" ntrt y"*, rtt"o-puyjust $35 in48 easy monthly instalments" Assume the ftlst pa)'ment is due at the end ofthe fil$;ondr, otre year Aom date ofpurchase What is the IRR based on the fnuo"i"g p.ouia"a ty the "iore, i*pres, yo* answer as an annual rate based on annual compounding. l,t Ktoo o / - t. IOOO. l(/rt r,' u^t ' LI+S i,o)r3(z (e/f,; +a) ttD | | --7q./ h1 rtL/s RvJ = $4' +l .J /"J-/)'il"'^L' 1,.;, F-2, .-:' {8, Ltr'vr t \ ;-,',ry1c--;,) u ? vt i("_K, ,^ nn - lt 74'{ -' 1?o r ffir.r -- 0.0t53f @ ." a^r"_,il ^1., ffi(_ ffi, 0 Page2ofg fr-^J "r-^rrr, tq,tl h
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Question #2 (5 marks) Giventhefoulmutuallyexoluqivel0yearinvestnentoppolhrnities,d€leminethebest opportunity using the IRR method. Assume MARR = 12%' FC Annual SavingSalvaqe Value IRR 80,000 13,000 10,00q 11.0% B 120,000 23.000 34,000 15.8% c '145,000 24,000 25,000 1.8% D 145,000 28,000 29,000 15.5% ft r> L ". y"/ fp8 l AftRR 0 0( + TPK ' MTBP 7f 000 D -9 k s )"1^"?" ,000 :ooo' #* 'r t* 1' /'44Po tr- /'4'f Ll' z5L,6k(r/t',;', tV ' 0'lz ILF+ 9 ' ?'0 6+l Pftt > Lilt ,'' ptaa 1)@ >lL o .lo, u.. >/o\tRP uD'b D Page 3 of 9
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Question #3 (16 marks) You work for a Canadian based company (operating in C$) and the company has just made an €800,000 sale in Europe. The equipment v/ill be delivered I yeal from now. You will be paid 20yo up liont and the remaining 80olo on delivery. The materials
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This note was uploaded on 04/20/2011 for the course CHE 374 taught by Professor Lawrnshyn during the Fall '11 term at University of Toronto.

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che374-2008-midterm-solutions - C HE374 E ngineeringconomic...

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