Tiêu đề MSTE 27 Solutions.pdf ✅

27 Engineering Economy: Miscellaneous Topics 2 Solutions ▣ 1. A businessman invested Php 80,000 in a startup where he expects a yearly revenue of Php 25,000 and yearly operating costs of Php 6,000. If the business is expected to run for 10 years, find the benefit-cost ratio. Yearly interest is 12%. [SOLUTION] R = 25k [ 1 − (1 + 0.12) −10 0.12 ] − 6k [ 1 − (1 + 0.12) −10 0.12 ] 80k = 1.34 ▣ 2. Having bought additional equipment for his company, the business owner estimates the annual expenses to be cut by 20%. The price of the equipment is Php 90 000 and its annual operating cost is Php 4 500. If the company’s annual expenses before the installation amount to Php 180 000, find the rate of return of purchasing the equipment, given that after 6 years, the equipment will be worthless. Interest rate is 12%. [SOLUTION] Savings: 180000(0.2) = 36000 Depreciation: RoR = 36000 − [ 90000(0.12) (1 + 0.12) 6 − 1 + 4500] 90000 = 22.7% ▣ 3. In the previous question, determine its recovery period. [SOLUTION] RP = 1 RoR = 1 0.227 RP = 4.4 years ▣ 4. A company has a working capital of Php 30 and a fixed capital of Php 50 M. Annual net profit is expected to be Php 20M and depreciation amounts to Php 3M. Compute for the payout period. [SOLUTION] PP = Fixed Capital Gross Profit PP = 50 M 20 M + 3 M = 2.17 years