Model

No.of.copies :90 Set: 1

from now. What is the single-payment that he should deposit now so that

Reg. No:

he gets the desired amount after 10 years? The bank gives 15% interest rate compounded annually.(0.2472) (Nov-Dec 2017) (Or) (b) (i) Define time value of money. Explain it briefly. (ii) A person is

TAGORE INSTITUTE OF ENGINEERING AND TECHNOLOGY MECHANICAL ENGINEERING MODEL EXAMINATION

planning for his retired life. He has 10 more years of service. He would

MG6853 – Engineering Economics and Cost Analysis

like to deposit Rs.8,500 at the end of the first year and thereafter he wishes

Time: 3hours Date:2 0.03.2019

to deposit the amount with an annual increase of Rs.500 for the next 9

maximum: 100 marks

years with an interest rate of 15%. Find the total amount at the end of the

Answer ALL questions

10th year of the above series. (3.3832,20.304) (Apr – May 2016) 13.(a) An engineer has two bids for an elevator to be installed in a new

PART A – (10x2=20 marks) 1. 2. 3. 4. 5.

Define Economics. (Nov-Dec 2015) Define marginal costing. (Apr – May 2015) Mention any 2 criteria for buy decision. (Apr – May 2016) Define effective interest rate. (Nov-Dec 2015) What is the concept of “future worth method of comparision”? (Apr – May 2017) 6. What is the idea of “rate of return method of comparision”? (Apr – May 2018) 7. What is meant by preventive maintenance? (Nov-Dec 2018) 8. What are the reasons for replacement? (Apr – May 2016) 9. What is depreciation? (Apr – May 2015) 10. What is benefit cost ratio? (Nov-Dec 2017) PART B – (5*13=65 marks) 11. a)(i) Discuss the factors which influence demand and supply.(8)

building. The details of the bids for Alpha&betaBid

Alpha Elevator Beta Elevator

comparison assuming 15% interest rate, compounded annually.(5.8474) (Apr – (ii)

= Rs.100 Selling price per unit =

Rs.200,Find (a) The break – even sales in quantity

Engineers estimates Initial cost Service life Annual operation and (Rs) (years) maintenance cost (Rs) 4,50,000 15 27,000 5,40,000 15 28,500

Determine which bid should be accepted, based on the present worth method of

Suguna company Ltd. Has the following details(8) Fixed cost = Rs. 20, 00,000, Variable cost per unit

the elevator are as follows:

May 2017) (Or) (b) Discuss the concept of make or buy decision and explain the functions of value engineering. (Nov-Dec 2016)

(b) The break – even

14 (a) In a particular locality of a state, the vehicle users take a roundabout route

point in sales (rupees). (Apr – May 2016) (Or) (b) (i) Explain the scope of engineering economics (ii) Explain the steps in

to reach certain places because of the presence of a river. This results in excessive

process planning. (Nov-Dec 2016) 12. a(i) Mention the basic principles of brainstorming.

(ii) A person wishes

construct a bridge across the river. The estimated initial investment for

to have a future sum of Rs.1,00,000 for his son’s education after 10 years

constructing the bridge is Rs.40, 00,000. The estimated life of the bridge is 15

travel time and increased fuel cost. So, the state government is planning to

years. The annual operation and maintenance cost is Rs.1,50,000. The value of

Briefly write the depreciation methods. (Nov-Dec 2015)

fuel savings due to the construction of the bridge is Rs.6,00,000 in th first year and it increases by Rs. 50,000 every year thereafter till thye end of the life of the bridge. Check whether the project is justified based on BC ratio by assuming an interest rate of 12%, compounded annually.(6.8109,4.9803) (Apr – May 2018) (Or) b) Two years ago, a machine was purchased at a cost of Rs.2,00,000 to be useful for eight years. Its salvage value at the end of its life is Rs.25,000. The annual maintenance cost is Rs.25,000. The market value of the present machine is Rs. 1,20,000. Now, a new machine to cater to the need of the present machine is available at Rs. 1,50,000 to be useful for six years. Its annual maintenance cost is Rs. 14,000. The salvage value of the new machine is Rs.20,000. Using an interest rate of 12%, find whether it is worth replacing the present machine with the new machine.(0.2432) (Nov-Dec 2017)

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15. (a) Explain the various methods of depreciation (Nov-Dec 2018) .

No.of.copies :90 (Or) (b) (i)

Set: 2

Reg No: A company has purchased an equipment whose first cost is

Rs.1,00,000 with an estimated life of eight years. The estimated salvage value

TAGORE INSTITUTE OF ENGINEERING AND TECHNOLOGY MECHANICAL ENGINEERING

of the equipment at the end of its lifetime is Rs.20,000. Determine the

MODEL EXAMINATION

depreciation charge and book value at the end of various years using the

MG6853 – Engineering Economics and Cost Analysis

straight line method of depreciation.(ii) Discuss the determination of economic life of asset. (Apr – May 2018)

maximum: 100 marks Answer ALL questions

PART C – (1*15=15 marks) 16. (a) Explain Time Value of Money.

Time: 3 hours Date: 20.03.2019

(Apr – May 2018)

PART A – (10x2=20 marks) (Or)

1. Define Engineering economics? (Nov-Dec 2015) 2. What is value engineering? (Nov-Dec 2016)

3. 4. 5. 6.

What is opportunity cost? (Apr- May 2016) What do you mean by break-even analysis? (Nov-Dec 2017) What are all the ways to improve economic efficiency? (Apr- May 2017) Differentiate revenue dominated cash flow with cost dominated cash flow.

(Apr- May 2018) 7. What is cash flow diagram? (Nov-Dec 2017) 8. What are all the factors are determining the demand and supply? (Apr- May 2017) 9. Name the types of maintenance. (Nov-Dec 2018) 10. Define depreciation and its types. (Apr- May 2015) PART B – (5*13=65 marks) 11. a)(i) Discuss the factors which influence demand and supply.(8) (Apr- May 2017)

(ii) Suguna company Ltd. Has the following details:

Fixed cost = Rs. 20, 00,000, Variable cost per unit = Rs.100 Selling price per unit = Rs.200, Find (a) The break – even sales in quantity (b) The break – even point in sales (rupees). (Apr- May 2016) (Or) b) (i)Explain the scope of engineering economics (ii) Explain the steps in process planning. (Nov-Dec 2017) 12)a) (i) Mention the basic principles of brainstorming. (ii) 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. (Apr- May 2016) (Or) b) (i) Define time value of money. Explain it briefly. (ii) A person is planning for his retired life. He has 10 more years of service. He would like to deposit Rs.8,500 at the end of the first year and thereafter he wishes to deposit the amount with an annual increase of Rs.500 for the next 9 years with an interest rate of 15%. Find the total th

amount at the end of the 10 year of the above series (Nov-Dec 2016)

13.(a) An engineer has two bids for an elevator to be installed in a new building. The details of the bids for the elevator are as follows: Alpha&betaBid

Engineers estimates Initial cost Service Annual operation (Rs) life and maintenance

(years) cost (Rs) Alpha Elevator 4,50,000 15 27,000 Beta Elevator 5,40,000 15 28,500 Determine which bid should be accepted, based on the present worth method of comparison assuming 15% interest rate, compounded annually. (Apr- May 2016) (or) b) Discuss the concept of make or buy decision and explain the functions of value engineering. (Nov-Dec 2015) 14(a) A Firm is considering replacement of an equipment, whose first cost is Rs.4,000 and the scrap value is negligible at the end of any year. Based on experience, it was found that the maintenance cost is zero during the first year and it increases by Rs. 200 every year thereafter. (a) When should the equipment be replaced if I = 0% (b) When should the equipment be replaced if I = 12%(Apr- May 2016) (Or) b) Two years ago, a machine was purchased at a cost of Rs.2,00,000 to be useful for eight years. Its salvage value at the end of its life is Rs.25,000. The annual maintenance cost is Rs.25,000. The market value of the present machine is Rs. 1,20,000. Now, a new machine to cater to the need of the present machine is available at Rs. 1,50,000 to be useful for six years. Its annual maintenance cost is Rs. 14,000. The salvage value of the new

machine is Rs.20,000. Using an interest rate of 12%, find whether it is worth replacing the present machine with the new machine. (Nov-Dec 2017) 15. (a) Explain the various methods of depreciation. (Apr- May 2016) (Or)

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(b) (i) A company has purchased an equipment whose first cost is Rs.1,00,000 with an estimated life of eight years. The estimated salvage value of the equipment at the end of its lifetime is Rs.20,000. Determine the depreciation charge and book value at the end of various years using the straight line method of depreciation. (ii) discuss the determination of economic life of asset. (Nov-Dec 2015) 16. (a) Briefly write the depreciation methods (Nov-Dec 2015) (Or) (b) Explain Time Value of Money. (Apr – May 2018)

.

PART – C

(8*1=8 marks)

8. Explain the 2 types of replacement problems.

(Or)

Describe the different methods of Depreciation.

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six years. Its annual maintenance cost is Rs. 14,000. The salvage value of the new machine is Rs.20,000. Using an interest rate of 12%, find whether it is worth replacing the present machine with the new machine.

7. a) A company has purchased an equipment whose first cost is Rs.1,00,000 with an estimated life of eight years. The estimated salvage value of the equipment at the end of its lifetime is Rs.20,000. Determine the depreciation charge and book value at the end of various years using the straight line method of depreciation.

(Or)

b) In a particular locality of a state, the vehicle users take a roundabout route to reach certain places because of the presence of a river. This results in excessive travel time and increased fuel cost. So, the state government is planning to construct a bridge across the river. The estimated initial investment for constructing the bridge is Rs.40, 00,000. The estimated life of the bridge is 15 years. The annual operation and maintenance cost is Rs.1,50,000. The value of fuel savings due to the construction of the bridge is Rs.6,00,000 in th first year and it increases by Rs. 50,000 every year thereafter till thye end of the life of the bridge. Check whether the project is justified based on BC ratio by assuming an interest rate of 12%, compounded annually. PART – C 8. Explain the 2 types of replacement problems.

(8*1=8 marks) (Or)

Describe the different methods of Depreciation.

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