The document contains 5 engineering economy problems involving cash flows, loans, sinking funds, and investments. The problems cover topics such as determining the most beneficial bid for an asset sale based on interest rates, calculating a lump sum payment for an inherited endowment, finding the interest rate for a car loan, determining how much needs to be supplemented to a sinking fund to purchase equipment, and calculating monthly investments to fund employee bonuses.
The document contains 5 engineering economy problems involving cash flows, loans, sinking funds, and investments. The problems cover topics such as determining the most beneficial bid for an asset sale based on interest rates, calculating a lump sum payment for an inherited endowment, finding the interest rate for a car loan, determining how much needs to be supplemented to a sinking fund to purchase equipment, and calculating monthly investments to fund employee bonuses.
The document contains 5 engineering economy problems involving cash flows, loans, sinking funds, and investments. The problems cover topics such as determining the most beneficial bid for an asset sale based on interest rates, calculating a lump sum payment for an inherited endowment, finding the interest rate for a car loan, determining how much needs to be supplemented to a sinking fund to purchase equipment, and calculating monthly investments to fund employee bonuses.
The document contains 5 engineering economy problems involving cash flows, loans, sinking funds, and investments. The problems cover topics such as determining the most beneficial bid for an asset sale based on interest rates, calculating a lump sum payment for an inherited endowment, finding the interest rate for a car loan, determining how much needs to be supplemented to a sinking fund to purchase equipment, and calculating monthly investments to fund employee bonuses.
Yr./ Sec. : _________________________ Signature:_____________
1. The Asset Privatization Trust had put up for scale a machine tools manufacturing plant. There were 2 bidders with the following proposals.
Bidder A offered P10M payable 20% down payment, the balance payable P1M annually for 8 years.
Bidder B offered P9M payable P2M down payment, the balance payable P0.5M semi- annually for 7 years.
Which bid is more beneficial to APT and how much is the difference if money is worth 10% effective?
2. A man inherited a regular endowment of P100,000 every end of 3 months for 10 years. However, he may choose to get a single lump sum payment at the end of 4 years. How much is this lump sum if the cost of money is 14% compounded quarterly?
3. A service car whose cash price was P540,000 was bought with a down payment of P162,000 and monthly instalments of P10,874.29 for 5 years. What was the rate of interest if compounded quarterly?
4. A small business company is preparing a schedule of funds to form a sinking fund for future expansion. The schedules of funds are as follows:
By the end of the 5 th year, the company will purchase equipment needed for the improvement and expansion of the company costing P60,000. If money is worth 16% by the company, how much money will be needed to supplement the sinking fund?
5. A manufacturing firm wishes to give each 80 employees a holiday bonus. How much is needed to invest monthly for a year at 12% nominal interest rate compounded monthly, so that each employee will receive a P2,000 bonus?