Engineering Economics

What is ratio analysis? Write the importance of various ratio in different perspective.

Explain the thought of "Time value of Money". Define depreciation and depletion with example and application.

A Garment buying a new sewing machine which can be either automatic or semi automatic. The estimate are given below:

	Semi automatic	Automatic
First cost	9000	14000
Annual maintenance cost/yr	3600	1700
Salvage value	0	2000
Life	10	5

Define ratio analysis and classify it based on user choice.

As an executive engineer of power authority, you need to buy a generator. Following two vendors give their offer. Which one you select based on present worth (P):

	Vendor A	Vendor B
First cost	15000	17000
Annual operating cost/yr	3500	3100
Salvage value	1000	2000
Life	6	6

Consider I% = 10%

Define present worth (P), Future worth (F) and develop the relationship between them.

Differentiate among moral, morale and motivation with relevant example.

Explain theory of X and theory of Y assumption with respect to worker and manager perspective.

Under what circumstances "Management theory of exception" would be appreciated to apply.

Define ratio analysis. Write the importance and drawbacks of ratio analysis.

Write the importance of engineering economic analysis as a decision maker of an organization.

A metallurgical engineer is considering two materials for use in a space vehicle. All estimates are made as Table below. Which should be selected on the basis of present worth comparison at an interest of 10% per year?

	Material X	Material Y
First Cost ($)	15000	35000
Maintenance Cost ($ per year)	9000	7000
Salvage value ($)	2000	20000
Life (year)	5	5

Define present worth (P), Future worth (F), Equivalent uniform annual worth (A) and Salvage value of an item or task. And develop the relationship between present worth (P) with future worth (F).

An engineering design solution group has purchased upgraded CAD software for $$5000$ now and annual payment of $$500$ per year for $6$ years starting $3$ years from now for annual upgrade. What is the present worth of the payments if the interest rate is $10$ per year?

Calculate the B/C ratio for the following cash flow estimates at a discount rate of $10$ per year.

Item	Cash flow
FW of benefits, $	30,800,000
AW of disbenefits, $ per year	105,000
First cost, $	1,200,000
M & O cost, $ per year	400,000
Life of project in year	20

What is “business ethics”? Why ethical behavior is important?

A manufacturer of industrial grade gas handling equipment wants to have $500,000 in an equipment replacement contingency fund 10 years from now. If the company plans to deposit a uniform amount of money each year beginning now and continuing through year 10 (total of 11 deposits), what must be the size of each deposit? Assume the account grows at a rate of 10% per year.

Compare three alternatives on the basis of their capitalized costs at $i = 10$ per year.

Alternative	E	F	G
First cost, $	-50,000	-300,000	-900,000
AOC, $ per year	-30,000	-10,000	-3,000
Salvage value, $	5,000	70,000	200,000
Life, years	2	4	$\infty$

Calculate the B/C ratio for the following cash flow estimates at a discount rate of 7% per year.

Item	Cash flow
FW of benefits, $	30,800,000
AW of disbenefits, $ per year	105,00
First Cost, $	1,200,000
M&O cost, $ per year	400,000
Life of project, years	20

A mechanical engineer is considering two sizes of pipes for moving distillate from a refinery to the tank farm. A small pipeline will cost less to purchase (including valve and other appurtenances), but will have a high head loss and, therefore, a higher pumping cost. The small pipeline will cost $1.7 million installed and have an operating cost of $12,000 per month. A large diameter pipeline will cost $2.1 million installed, but its operating cost will be only 8,000 per month. Which pipe size is more economical at an interest rate of 1% per month on the basis of an annual worth analysis? Assume the salvage value is 10% of the first cost for each pipeline at the end of the 10 year project.