Engineering Economics - Midterm Exam 2021
Engineering Economics - Midterm Exam 2021
Engineering Economics - Midterm Exam 2021
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INSTRUCTIONS TO CANDIDATES:
1. Check the following exam paper information:
Exam paper:
Total number of pages: 4
Instructions:
You are required to answer all compulsory questions.
The total number of marks you can be awarded is 100 marks.
2. Please write your name and student ID on the exam paper and answer sheets.
Student Name ……………………………………………..
Student ID ……………………………………………..
3. Candidates may use this exam paper to write notes as necessary, but should not remove
it from the examination venue for any reason.
2. (17 points) PT. Aquatika Sehat Sejahtera (ASS) plans to develop a water purification
installation at a major cities in Kalimantan. The investment required for the land acquisition
and the construction is $ 12.5 million with a concession period of 25 years. The estimation
for the operation and maintenance (O&M) cost is $ 950,000 per year. What is the minimum
gross revenue per year should be earned by ASS to cover the investment and the (O&M)
cost. The determined MARR is 9% per year. (please calculate by hand)
3. (17 points) 2 Concrete Batching Plant that have the following cost are under consideration
as concrete mixing plant to supply concrete for the construction of nearby buildings, roads
and bridges,. Using an interest rate of 9 % per year, determine which alternative should be
selected on the basis of present worth analysis. (please calculate by hand)
Batching Plant A Batching Plant B
First Cost ($) - 200,000 - 345,000
Annual Operating Cost ($ per year) - 48,000 - 32,000
Salvage Value ($) 56,000 76,000
Live (years) 3 4
4. (17 points) Seven years ago, Kumala Engineering Company (KEC) purchased bulldozer for $
135,000 to provide earth clearing and gradding service. The company sold it today for $
63,000. Operating and maintenance costs averaged $ 11,600 per year. A complete overhaul
at the end of year 4 cost an extra $ 8,700. Calculate the annual cost of the backhoe loader
at 9% per year interest. (please calculate by hand)
5. (17 points) Assume that you are planning to invest money at 7% per year as shown by the
following cash flow diagram . Further, you expect to withdraw your investment as shown by
the diagram. Find the net present worth and equivalent annual series for the entire cash
flow sequence. Please use Excel to find the value. (The excel file should be attached to your
answer).
Mid Term Examination-UB (reguler)