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Faculty of Engineering
Department of Industrial Engineering and Management
Engineering Economy-INME221
Worksheet#3- MCQ –Evaluating a Single Project
11 years
6 years
0 years
8 years
2. Find the net present worth of the following cash flow series at an
interest rate of 10%.
$201,205
$218,420
$232,316
$250,100
$2,047,734
$2,766,344
$2,887,776
$2,507,621
5. Find the capitalized equivalent worth for the project cash flow series
at an interest rate of 10%.
CE(10%) = $1,500
CE(10%) = $1,753
CE(10%) = $1,548
CE(10%) = $1,476
7. Find the annual equivalent worth for the following infinite cash flow
series at an interest rate of 10%:
$438.60
$985.40
$445.20
$461.20
8. Colgate Printing Co. (CPC) has the book binding contract for the Ralph
Brown library. The library pays $25 per book to CPC. CPC binds 1,000
books every year for the library. Ralph Brown library is considering
the option of binding the books in-house in the basement of the
library complex. In order to do this, the library would have to invest
in a binding machine and other printing equipment at a cost of
$100,000. The useful life of the machine is 12 years, at the end of
which time, the machine is estimated to have a salvage value of
$12,000. The annual operating and maintenance costs of the machine
are estimated to be $10,000. Assuming an interest rate of 6%, what
is the cost of binding per book for the in house option?
If the city expects 40,000 visitors to the complex each year, what
should be the minimum ticket price per person, so that the city can
break even? • Useful life: Infinite • Interest rate: 5%.
$190
$290
$230
$260
11. You are considering an open-pit mining operation. The cash flow
pattern is somewhat unusual since you must invest in some mining
equipment, operate them for 2 years, and restore the sites to their
original condition. You estimate the net cash flows to be as follows:
12. Consider the investment project with the following net cash flows:
What would be the value of X if the project’s IRR is known to be
10%?
$580
$425
$635
$1,045
13. You are considering a CNC machine that costs $150,000. This
machine will have an estimated service life of 10 years with a net
after tax salvage value of $15,000. Its annual after tax operating and
maintenance costs are estimated to be $50,000. To expect an 18%
rate of return on investment after tax, what would be the required
minimum annual after tax revenues?
$92,435
$63,500
$82,740
$94,568