Quiz II - Engg 404 - 2022
Quiz II - Engg 404 - 2022
Quiz II - Engg 404 - 2022
GENERAL DIRECTIONS:
1. Answer all problem-solving type problems in a clean paper, preferably white.
2. Avoid rounding off during computations but only on final answers, up to four (4) decimal places.
3. Upload your .pdf file with complete solution at the end of the Google Form. It must be named as <Section-Name-Q2>.
Example: 2201-de Guzman, Monroe-Q2.pdf
1. If all individual B/C ratios of MEAs are less than 1.00, then the preferred option is to “Do Nothing”.True
2. The concept of individual projects stems from the B/C ratio each project has to offer. Once it is feasible (i.e., >
1), MEAs are born.True
3. Replacement analysis should be done at the end of the useful life of the property.False
4. If there is a past estimation error, there is a need to replace the property immediately..False
5. The physical life is always greater than all the other “life” factors under replacement analysis.True
6. If breakeven analysis is conducted with PW analysis for different MEAs, it doesn’t guarantee that the fastest
alternative to reach its breakeven point has also the highest equivalent worth.True.
7. In depreciation analysis, the method that will yield the highest book value at the end of n years is always the top
factor to consider..False
8. Replacement ends depreciation.True
9. If a property’s market value becomes 0, the owner has no right to sell it at a value > 0 since this will be taxable at a
very large rate.True
10. Any net income obtained from selling a depreciated property according to its last market value is considered a
capital gain.True
1. (20 pts.) An investment worth P203,000,000 is made from a certain transaction of a supposed
philanthropist. The salvage value at the end of its useful life of 15 years is P200,000.
DEPRECIATION Other
BV1 BV2 BV7 BV10
METHODS Unknowns
SL Method 15 =
DB Method R=
SF Method SF factor =
( = 6.8%)
SOYD Method N=
DEPRECIATION Other
BV1 BV2 BV7 BV10
METHODS Unknowns
SL Method d15 =P 13,532,000 P 189,468,000 P 175,936,000 P 108,276,000 P 67,680,000
SL METHOD
Republic of the Philippines
BATANGAS STATE UNIVERSITY
BatStateU Alangilan
Alangilan, Batangas City
College of Engineering, Architecture and Fine Arts
https://batstate-u.edu.ph/, Tel. No. (043) 425-0139 loc. 118/2121
R= 2/N = 2/15
SF METHOD(i=6%.)
SOYD METHOD
N=1+2+3+4…..+15 = 120
2. (20 pts.) During your stay in your first job as a chemical engineer, the finance team wasn’t around for some
reason and the CEO wanted a depreciation plan right away. There was no one out there knowledgeable in
mathematics ang engineering economy other than you so you had to provide the depreciation plan. The task
from the email goes like this:
“ <April 1, 2022 | 07:48 AM>
Dear Engineer,
Sorry for the urgency, but I need to have a depreciation plan for our current economic stand. Our
assets amount to P11,237,188,000. You need to show me how these assets will depreciate starting
from 2023 (next year) until 2045 using any method of preference until the last book value at year 2045
amounts to P100,000,000. You can set the interest at the current MARR = 10% whenever needed.
Among the deprecation plans you have prepared; you need to select the best plan so that our assets
will still get the HIGHEST book value at the end of 17 years. You know, I had to retire at this year, so I
want to leave the best assets as much as possible.
Thank you. Your promotion is pending until you finish this task.
100,000,000=11,237,188,000(1-I)22
22
√(100,000,000) = 22√(1-I)22
11,237,188,000
0.806841613 - 1 =i
i=0.193158387
I=0.1932
A= P(1-i)17
= 11,237,188,000 (1-0.1932)17
A = P 506,235,818.18182
A= P 506,235,818.1818
3. (40 pts.) Mr. Decision is torn between two independent projects A and B. The data below each project are
given and the MEAs under each project are also given. Take MARR = 12% for all projects.
A. Perform the proper evaluation of all the projects available.
B. Recommend the project(s) that can be selected from the list so you can help Mr. Decision to decide.
C. Explain the method(s) of evaluation you used including the assumption(s) made.
SOLUTION(MARR=12 %)
PROJECT A
PROJECT B
PROJECT A
MEA 1
PW: 1,187,802.14701
AW: 210,222.17018
MEA 2
PW: 29,877.44389
AW: 6,014.41435
MEA 3
PW: -2,324,429.85821
AW: -644,819.4639
MEA 4
PW: -1,750,239.76826
AW: -576,239.20350
Republic of the Philippines
BATANGAS STATE UNIVERSITY
BatStateU Alangilan
Alangilan, Batangas City
College of Engineering, Architecture and Fine Arts
https://batstate-u.edu.ph/, Tel. No. (043) 425-0139 loc. 118/2121
MEA 5
PW: 233,472.26597
AW: 56,786.45962
MEA 6
PW: 74,392.67008
AW: 18,094.21063
MEA 7
PW: 54,535.93371
AW: 13,264.54166
MEA 8
PW: -406,060.97939
AW: -98,764.47344
In terms of Present Worth , MEA 1 has the highest value therefore Project 1 should be selected. In terms of Annual Worth, MEA 1 has
the highest value overall Project 1 should be selected. Overall, in terms of Present and Annual Worth, MEA 1 having both the highest
value and being a part of Project 1, therefore Project 1 should be selected.
Republic of the Philippines
BATANGAS STATE UNIVERSITY
BatStateU Alangilan
Alangilan, Batangas City
College of Engineering, Architecture and Fine Arts
https://batstate-u.edu.ph/, Tel. No. (043) 425-0139 loc. 118/2121
Republic of the Philippines
BATANGAS STATE UNIVERSITY
BatStateU Alangilan
Alangilan, Batangas City
College of Engineering, Architecture and Fine Arts
https://batstate-u.edu.ph/, Tel. No. (043) 425-0139 loc. 118/2121
Republic of the Philippines
BATANGAS STATE UNIVERSITY
BatStateU Alangilan
Alangilan, Batangas City
College of Engineering, Architecture and Fine Arts
https://batstate-u.edu.ph/, Tel. No. (043) 425-0139 loc. 118/2121
Republic of the Philippines
BATANGAS STATE UNIVERSITY
BatStateU Alangilan
Alangilan, Batangas City
College of Engineering, Architecture and Fine Arts
https://batstate-u.edu.ph/, Tel. No. (043) 425-0139 loc. 118/2121
Republic of the Philippines
BATANGAS STATE UNIVERSITY
BatStateU Alangilan
Alangilan, Batangas City
College of Engineering, Architecture and Fine Arts
https://batstate-u.edu.ph/, Tel. No. (043) 425-0139 loc. 118/2121
Republic of the Philippines
BATANGAS STATE UNIVERSITY
BatStateU Alangilan
Alangilan, Batangas City
College of Engineering, Architecture and Fine Arts
https://batstate-u.edu.ph/, Tel. No. (043) 425-0139 loc. 118/2121
Republic of the Philippines
BATANGAS STATE UNIVERSITY
BatStateU Alangilan
Alangilan, Batangas City
College of Engineering, Architecture and Fine Arts
https://batstate-u.edu.ph/, Tel. No. (043) 425-0139 loc. 118/2121
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Noted by:
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