No.of.copies :90 Set: 1 from now.

What is the single-payment that he should deposit now so that

Reg. No: he gets the desired amount after 10 years? The bank gives 15% interest
rate compounded annually.(0.2472) (Nov-Dec 2017) (Or)
TAGORE INSTITUTE OF ENGINEERING AND TECHNOLOGY
(b) (i) Define time value of money. Explain it briefly. (ii) A person is
MECHANICAL ENGINEERING
MODEL EXAMINATION planning for his retired life. He has 10 more years of service. He would
MG6853 – Engineering Economics and Cost Analysis like to deposit Rs.8,500 at the end of the first year and thereafter he wishes
Time: 3hours maximum: 100 marks to deposit the amount with an annual increase of Rs.500 for the next 9
Date:2 0.03.2019 years with an interest rate of 15%. Find the total amount at the end of the
Answer ALL questions
10th year of the above series. (3.3832,20.304) (Apr – May 2016)
PART A – (10x2=20 marks)
13.(a) An engineer has two bids for an elevator to be installed in a new
1. Define Economics. (Nov-Dec 2015) building. The details of the bids for the elevator are as follows:
2. Define marginal costing. (Apr – May 2015)
Alpha&beta-
3. Mention any 2 criteria for buy decision. (Apr – May 2016)
4. Define effective interest rate. (Nov-Dec 2015) Bid Engineers estimates
5. What is the concept of “future worth method of comparision”? Initial cost Service life Annual operation and
(Apr – May 2017) (Rs)
6. What is the idea of “rate of return method of comparision”? (years) maintenance cost (Rs)
(Apr – May 2018) Alpha Elevator 4,50,000 15 27,000
7. What is meant by preventive maintenance? (Nov-Dec 2018) Beta Elevator 5,40,000 15 28,500
8. What are the reasons for replacement? (Apr – May 2016)
9. What is depreciation? (Apr – May 2015) Determine which bid should be accepted, based on the present worth method of
10. What is benefit cost ratio? (Nov-Dec 2017) comparison assuming 15% interest rate, compounded annually.(5.8474) (Apr –
PART B – (5*13=65 marks)
11. a)(i) Discuss the factors which influence demand and supply.(8) (ii) May 2017) (Or)
(b) Discuss the concept of make or buy decision and explain the functions of value
Suguna company Ltd. Has the following details(8) Fixed cost = Rs. 20,
engineering. (Nov-Dec 2016)
00,000, Variable cost per unit = Rs.100 Selling price per unit =
Rs.200,Find (a) The break – even sales in quantity (b) The break – even 14 (a) In a particular locality of a state, the vehicle users take a roundabout route
point in sales (rupees). (Apr – May 2016) (Or) to reach certain places because of the presence of a river. This results in excessive
(b) (i) Explain the scope of engineering economics (ii) Explain the steps in
travel time and increased fuel cost. So, the state government is planning to
process planning. (Nov-Dec 2016)
12. a(i) Mention the basic principles of brainstorming. (ii) A person wishes construct a bridge across the river. The estimated initial investment for

to have a future sum of Rs.1,00,000 for his son’s education after 10 years constructing the bridge is Rs.40, 00,000. The estimated life of the bridge is 15
years. The annual operation and maintenance cost is Rs.1,50,000. The value of Briefly write the depreciation methods. (Nov-Dec 2015)
fuel savings due to the construction of the bridge is Rs.6,00,000 in th first year and
it increases by Rs. 50,000 every year thereafter till thye end of the life of the
bridge. Check whether the project is justified based on BC ratio by assuming an
interest rate of 12%, compounded annually.(6.8109,4.9803) (Apr – May 2018)
(Or)
b) Two years ago, a machine was purchased at a cost of Rs.2,00,000 to be useful
for eight years. Its salvage value at the end of its life is Rs.25,000. The annual
maintenance cost is Rs.25,000. The market value of the present machine is Rs.
1,20,000. Now, a new machine to cater to the need of the present machine is
available at Rs. 1,50,000 to be useful for six years. Its annual maintenance cost is
Rs. 14,000. The salvage value of the new machine is Rs.20,000. Using an interest
rate of 12%, find whether it is worth replacing the present machine with the new
machine.(0.2432) (Nov-Dec 2017)
Prepared by verified by approved by
15. (a) Explain the various methods of depreciation (Nov-Dec 2018)
. No.of.copies :90 Set: 2
(Or) Reg No:
(b) (i) A company has purchased an equipment whose first cost is
TAGORE INSTITUTE OF ENGINEERING AND TECHNOLOGY
Rs.1,00,000 with an estimated life of eight years. The estimated salvage value MECHANICAL ENGINEERING
of the equipment at the end of its lifetime is Rs.20,000. Determine the MODEL EXAMINATION

depreciation charge and book value at the end of various years using the MG6853 – Engineering Economics and Cost Analysis

straight line method of depreciation.(ii) Discuss the determination of economic Time: 3 hours maximum: 100 marks
Date: 20.03.2019
life of asset. (Apr – May 2018) Answer ALL questions
PART C – (1*15=15 marks) PART A – (10x2=20 marks)
16. (a) Explain Time Value of Money. (Apr – May 2018) (Or)
1. Define Engineering economics? (Nov-Dec 2015)
2. What is value engineering? (Nov-Dec 2016)
 3. What is opportunity cost? (Apr- May 2016) 13.(a) An engineer has two bids for an elevator to be installed in a new
4. What do you mean by break-even analysis? (Nov-Dec 2017)
building. The details of the bids for the elevator are as follows:
5. What are all the ways to improve economic efficiency? (Apr- May 2017)
6. Differentiate revenue dominated cash flow with cost dominated cash flow. Alpha&beta-
(Apr- May 2018) Bid Engineers estimates
7. What is cash flow diagram? (Nov-Dec 2017) Initial cost Service Annual operation
8. What are all the factors are determining the demand and supply? (Rs)
(Apr- May 2017) life and maintenance
9. Name the types of maintenance. (Nov-Dec 2018) (years) cost (Rs)
10. Define depreciation and its types. (Apr- May 2015) Alpha Elevator 4,50,000 15 27,000
Beta Elevator 5,40,000 15 28,500
PART B – (5*13=65 marks) Determine which bid should be accepted, based on the present worth
11. a)(i) Discuss the factors which influence demand and supply.(8) (Apr- May
method of comparison assuming 15% interest rate, compounded annually.
2017) (ii) Suguna company Ltd. Has the following details:
(Apr- May 2016) (or)
Fixed cost = Rs. 20, 00,000, Variable cost per unit = Rs.100 b) Discuss the concept of make or buy decision and explain the functions
Selling price per unit = Rs.200, Find (a) The break – even sales in quantity of value engineering. (Nov-Dec 2015)
(b) The break – even point in sales (rupees). (Apr- May 2016) (Or)
b) (i)Explain the scope of engineering economics (ii) Explain the steps in 14(a) A Firm is considering replacement of an equipment, whose first cost is

process planning. (Nov-Dec 2017) Rs.4,000 and the scrap value is negligible at the end of any year. Based on
12)a) (i) Mention the basic principles of brainstorming. experience, it was found that the maintenance cost is zero during the first
(ii) A person wishes to have a future sum of Rs.1,00,000 for his son’s
year and it increases by Rs. 200 every year thereafter.
education after 10 years from now. What is the single-payment that he
(a) When should the equipment be replaced if I = 0%
should deposit now so that he gets the desired amount after 10 years? The
(b) When should the equipment be replaced if I = 12%(Apr- May 2016)
bank gives 15% interest rate compounded annually. (Apr- May 2016)
(Or) (Or)
b) (i) Define time value of money. Explain it briefly. b) Two years ago, a machine was purchased at a cost of Rs.2,00,000 to be
(ii) A person is planning for his retired life. He has 10 more years of
useful for eight years. Its salvage value at the end of its life is Rs.25,000.
service. He would like to deposit Rs.8,500 at the end of the first year and
The annual maintenance cost is Rs.25,000. The market value of the present
thereafter he wishes to deposit the amount with an annual increase of
machine is Rs. 1,20,000. Now, a new machine to cater to the need of the
Rs.500 for the next 9 years with an interest rate of 15%. Find the total
present machine is available at Rs. 1,50,000 to be useful for six years. Its
th
amount at the end of the 10 year of the above series (Nov-Dec 2016)
annual maintenance cost is Rs. 14,000. The salvage value of the new
 machine is Rs.20,000. Using an interest rate of 12%, find whether it is
worth replacing the present machine with the new machine. (Nov-Dec
2017)
15. (a) Explain the various methods of depreciation. (Apr- May 2016)
(Or) Prepared by verified by approved by
(b) (i) A company has purchased an equipment whose first cost is
Rs.1,00,000 with an estimated life of eight years. The estimated salvage
value of the equipment at the end of its lifetime is Rs.20,000. Determine the
depreciation charge and book value at the end of various years using the
straight line method of depreciation.
(ii) discuss the determination of economic life of asset. (Nov-Dec 2015)

16. (a) Briefly write the depreciation methods (Nov-Dec 2015)

(Or)
(b) Explain Time Value of Money. (Apr – May 2018) .

PART – C (8*1=8 marks)

8. Explain the 2 types of replacement problems. (Or)
Describe the different methods of Depreciation.

Prepared by verified by approved by

six years. Its annual maintenance cost is Rs. 14,000. The salvage value of the
new machine is Rs.20,000. Using an interest rate of 12%, find whether it is
worth replacing the present machine with the new machine.
 7. a) A company has purchased an equipment whose first cost is
Rs.1,00,000 with an estimated life of eight years. The estimated salvage
value of the equipment at the end of its lifetime is Rs.20,000. Determine the
depreciation charge and book value at the end of various years using the
straight line method of depreciation. (Or)
b) In a particular locality of a state, the vehicle users take a roundabout route
to reach certain places because of the presence of a river. This results in
excessive travel time and increased fuel cost. So, the state government is
planning to construct a bridge across the river. The estimated initial investment
for constructing the bridge is Rs.40, 00,000. The estimated life of the bridge is
15 years. The annual operation and maintenance cost is Rs.1,50,000. The
value of fuel savings due to the construction of the bridge is Rs.6,00,000 in th
first year and it increases by Rs. 50,000 every year thereafter till thye end of
the life of the bridge. Check whether the project is justified based on BC ratio
by assuming an interest rate of 12%, compounded annually.

PART – C (8*1=8 marks)

8. Explain the 2 types of replacement problems. (Or)
Describe the different methods of Depreciation.

Prepared by verified by approved by