DR.
BABASAHEB AMBEDKAR TECHNOLOGICAL UNIVERSITY, LONERE
Regular & Supplementary Winter Examination-2023
Course: B. Tech. Semester :VII
Branch : Electronics & Allied Engg.
Subject Code & Name:BTHM705_EX Engineering Economics and Financial
Mathematics
Max Marks: 60 Date:11-01-24 Duration: 3 Hr.
Instructions to the Students:
1. All the questions are compulsory.
2. The level of question/expected answer as per OBE or the Course Outcome (CO) on
which the question is based is mentioned in ( ) in front of the question.
3. Use of non-programmable scientific calculators is allowed.
4. Assume suitable data wherever necessary and mention it clearly.
CO Marks
Q. 1 Solve Any Two of the following. 12
A) Explain in detail the different element of cost. CO1 6
B) Explain different types of Efficiency in Engineering Economics. CO1 6
C) What is process planning and give steps for the same? CO1 6
Q.2 Solve Any Two of the following. 12
A) Mention a basic steps for value engineering. CO1 6
B) The Management of a company finds that while the cost of making a component CO1 6
part is Rs.10, the same is available in the market at Rs.9 with an assurance of
continuous supply. Give a suggestion whether to make or buy this part. Give
also your views in case the supplier reduces the price from Rs.9 to Rs.8. The
cost information is as follows:
Particulars R.S.
Material 3.50
Direct Labour 4.00
Other variable expenses 1.00
Fixed expenses 1.50
Total 10.00
C) A company has to replace a present facility after 15 years at an outlay of CO1 6
Rs.5,00,000. It plans to deposit an equal amount at the end of every year for the
next 15 years at interest rate of 18% compounded annually. Find the equivalent
amount that must be deposited at the end of every year for the next 15 years.
Q. 3 Solve Any Two of the following. 12
A) Explain Revenue Dominated Cash flow diagram? CO1 6
B) A Transport company has been looking for a new tyre for its truck and has locat- CO1 6
ed the following alternatives:
Brand Tyre warranty (month) Price per tyre (R.s.)
A 12 1,200
B 24 1,800
C 36 2,100
D 48 2,700
If the company feels that the warranty period is a good estimate of the tyre life
and that a normal interest rate (compound annually) of 12% I appropriate, which
tyre should it buy?
C) Alpha industry is planning to expand its production operation. It has identified CO1 6
three different Technology for meeting the goal. The initial outlay and annual
revenues with respect to each of the technologies are summarized in table.
Suggest the best technology which is to be implemented based on the present
worth method of comparison assuming 20% interest rate, compound annually.
Initial Annual revenue Life(years)
outlay(Rs.) (Rs.)
Technology1 12,00,000 4,00,000 10
Technology2 20,00,000 5,00,000 10
Technology3 18,00,000 6,00,000 10
Q.4 Solve Any Two of the following. 12
A) Write down the cause of Equipment breakdown and Give disadvantages of CO1 6
Breakdown Maintenance?
B) Write a short note on Preventive Maintenance? CO1 6
C) Two years ago, a machine was purchased at a cost of Rs. 2,00,000 to be useful CO1 6
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.
Q. 5 Solve Any Two of the following. 12
A) Differentiate straight line method of depreciation and declining balance method CO1 6
of depreciation?
B) Two mutually exclusive projects are being considered for investment. Project Al CO1 6
requires an initial outlay of Rs. 30, 00,000 with net receipts estimated as Rs. 9,
00,000 per year for the next 5 years. The initial outlay for the project A2 is Rs.
60, 00,000, and net receipts have been estimated at Rs. 15, 00,000 per year for
the next seven years. There is no salvage value associated with either of the pro-
jects. Using the benefit cost ratio, which project would you select? Assume an
interest rate of 10%.
C) Discuss different types of inflation? CO1 6
*** End ***
