Engineering Economics

Assignment#02

Section : A

Name : Najam Iqbal khan

Registration # : Fa17/BScEE/011
 Question#01
Site A

Cost $5,000
Rent $1,200,000
Total $1,205,000

Site B

Cost $100,000
Rent $900,000
Total $1,000,000

Here the interesting thing is that the income of $8.00/yd3 is free of the site chose.
Hence, we can expand benefit by limiting absolute expense. The strong waste site
ought to be situated in Site B.

Question#02

SSCASEIT requesting cost from $4,000 is likely too high since the new transmission enhances the
vehicle's worth. If SSCIT is being offered and can get $3,000 for the vehicle, if i am at that place i ought
to acknowledge this offer. At that point, the $4,000 - $3,000 = $1,000 "misfortune" on his vehicle is a
sunk cost and all together it was not very wise of SSCIT to demand such price in the first place just
because they spent money on it

Solution#03

I personally believe that the $97 that was spent on a passport is a sunk cost since i can't get
my cash back.( Humor : Khud to dost dooba mujhe bhi doba betha lol) now on the off chance
that i choose to get rid of the idea of outing of Germany sometime in the not-too-distant future,
the visa's expense turns out to be important for the fixed expense of making the outing similarly
as the expense of new baggage would be.

Solution#04

According to my understanding If the estimation of the re-machining alternative ($60,000) is

sensibly sure, this choice ought to be picked. Regardless of whether the re-machined parts can
be sold for just $45,001, this choice is alluring. If administration is exceptionally Risk
unfavorable (they can endure almost no danger), the recycled market is the best approach to
ensure $15,000 on the exchange.

Solution#05

The assurance of making $200,000 - $120,000 = $80,000 overall income for her is not
acceptable or attractive. In the event that she keeps her current work status, she is getting some
distance from an unsafe $80,000 acquire. So, you see this "opportunity cost" of $80,000
adjusted for a sure $60,000 would show probably show that she is opposed to the idea of taking
risk and does not need to try sincerely as an autonomous advisor to make an extra $20,000 one
year from now.

Solution#06

(a)
Suppose my ache ameer auntie has given me a gift of $25,000 and I decide to buy another
vehicle for my social status , on one hand I am getting a safe distance from a dangerous 20%
each year return. However, since I am a risk taker and I leave it upto faith the opportunity cost
is 20%, or else; it is 6% each year.

(b)
Now if I put the resources given by my ache ameer auntie into the n the high-tech common
stock , the following best return that I will have to surrender is 6% each year. This is my
opportunity cost in the present circumstances.

Solution#07

Life-cycle cost concept :

According to my understanding that is how I would interpret the Life cycle cost , I trust that the
Life cycle cost idea incorporates a period skyline may it be an item, construction, framework, or
administration from the underlying requirements appraisal to last phaseout and removal
exercises. Meaning of prerequisites; calculated plan, progressed improvement, and model
testing; definite plan and asset obtaining for creation or development; real creation or
development; and activity and client use, and upkeep and backing are other essential exercises
required during the existence cycle

Why is the potential for achieving life-cycle cost savings greatest in the acquisition
phase of the life cycle?
The acquisition phase of a life cycle incorporates the meanings of necessities just as the
theoretical and itemized plan exercises. It is during these exercises that the future expenses to
deliver , work, and keep an item, construction, framework, or administration are foreordained.
Since these are some of the future expenses during the activity stage are 80-90 percent of the
existence cycle costs, the best potential for bringing down life cycle costs is during the obtaining
stage , meaning of prerequisites and plan exercises.

Solution#08

(a)
 Chart Title
12

10

0
0 2 4 6 8 10 12

Sir, I tried to make a graph but sadly I don’t know how to, Although I have an idea about
the pictorial view of graph, it will be a constant change straight line graph with both the
variables

(b)

In order for Fixed costs that could change the Breakeven point from 62 travelers to a lower
number include, following measures according to me can be taken :
1) One way is to diminished airplane protection costs by re-arranging expenses with the
current insurance agency or another organization,
2) The other way is to lower authoritative costs in the front office
3) Expanded medical coverage costs for the workers ,for instance I believe that by bringing
down the expense of the charges to the aircraft organization by raising the deductibles on
the gathering strategy.

(c)
Although there are a lot of constraints when it comes to the variable costs that could be
decreased to bring down the Breakeven but I personally will be choosing these 3 Variable costs
that include:
 1) Flight dinner :
If we will not be giving any dinners on the flight it will save money that is one way of
doing it.

2) Air ventilation cost

less outside air circled all through the lodge, less airline stewards.

3) Oil price
HERE, I would like to clear that one major expense is fuel,which is fixed for a given
flight and factored with velocity. But the chief can fly the airplane at a lower speed to
save fuel.