Outeursreg voorbehou / Copyright reserved

Departement Bedryfs- en Sisteemingenieurswese

Department of Industrial and Systems Engineering

Semester test 2 / Semestertoets 2

21 April 2008

BIE 310 Engineering Economy/Ingenieursekonomie

Datum / Date: 21 April 2008
Tydsduur / Duration: 1 uur/hours

Lecturer / Dosent:: Dr.P.J.Jacobs

Beantwoord AL DIE vrae.

Stel en motiveer alle aannames duidelik.
Let wel : Alle vrae tel nie dieselfde punte nie
Hierdie vraestel bestaan uit 7 bladsye

Answer ALL THE questions.

State and motivate all assumptions clearly.
Please Note: All questions do not carry the same marks.
This paper has 7 pages
Punte / Marks: 70

1/7

Question/Vraag1:[15]
ActualRandDomain/WerklikeRandDomein:
30000G=?
01101520
i=12%i=16%compoundedi=24%compounded
semiannuallyquarterly
i=16%berekeni=24%bereken
halfjaarlikskwartaalliks
f=5%peryear/jaar

f=8%peryear/jaar

f=12%peryear/jaar

ConstantRandDomain/KonstanteRandDomein:
01020Years/Jaar

50000
ItisestimatedthatthecostofthisprojectwillbeR50000peryear,fromyear10untilyear20,

inrealterms(thatisexcludinginflation).Thenetprofitofthisprojectduringyear1isR30000in
actualrand.Whatshouldtheuniformincreaseperyearinactualrand,ofthenetprofitinthefirstyear,
forthisprojecttobeeconomicallyviable?.(WhatshouldthevalueofGbe?).Useyear10asnodal
pointforyourcalculation.
Dieberaamdekostevan`nprojekwordvasgestelopR50000perjaarvanafjaar10totjaar20

inreleterme(inflasieuitgesluit).DienettowinsvandieprojekindieeerstejaarsalR30000in
werklikerandwees.Watmoetdieuniformetoenamevandienettowinsinwerklikerandperjaarvan
dieeerstejaarwees,omhierdieprojekekonomieslewensvatbaartemaak?.(Watmoetdiewaardevan
Gwees?).Gebruikjaar10asnodalepuntviruberekening.

2/7

Question/Vraag2:[16]
0Q1Q2Q3Q4Q5Q6Q7Q8Quarters/Kwartale

500

Question/Vraag2.a.:[2]
CalculatetheNetPresentValueiftheinterestrateis12%compoundedannually.
Berekendienettohuidigewaardeasdierentekoers12%is,berekenjaarliks.
Question/Vraag2.b.:[2]
CalculatetheNetPresentValueiftheinterestrateis12%compoundedquarterly.
Berekendienettohuidigewaardeasdierentekoers12%is,berekenkwartaalliks.
Question/Vraag2.c.:[4]
CalculatetheNetPresentValueiftheinterestrateis12%compoundedmonthlyandn=8.
Berekendienettohuidigewaardeasdierentekoers12%is,berekenmaandeliksenn=8.

Question/Vraag2.d.:[4]

CalculatetheNetPresentValueiftheinterestrateis12%compoundedmonthlyandn=24.
Berekendienettohuidigewaardeasdierentekoers12%is,berekenmaandeliksenn=24.
Question/Vraag2.e.:[4]
0Y/J1Y/J2Y/J3

5000

andn=1.

CalculatetheNetPresentValueiftheinterestrateis12%compoundedquarterly

Berekendienettohuidigewaardeasdierentekoers12%is,berekenkwartaalliksenn=1

3/7

Question/Vraag3:[20]
YounegotiatedaloanworthR75000toberepaidin10equalannualpayments.Theintereston
theloanis20%.Afterthe5thpaymentyouareinformedthattheinterestpayablewillincreaseto24%.
Uhet`nleningbekomterwaardevanR75000watin10gelykejaarliksepaaiemente
terugbetaalmoetword.Dierentebetaalbaaris20%.Nadie5debetalingworduingeligdatdie
rentekoersna24%verhoogword.

Question/Vraag3.a.:[2]

Whatistheinitialannualpayment?
Watisdieaanvanklikejaaliksepaaiementwatbetaalmoetword?.
Question/Vraag3.b.:[4]
Whatistheannualpaymentaftertheincreaseoftheinterestrate?
Watisdiejaaliksepaaiementwatbetaalmoetwordnadiedierentekoersverhoging?.
Question/Vraag3.c.:[4]
Whatistheinterestcomponentofthesecondpaymentaftertheincreaseoftheinterestrate?
Watisdierentekomponentvandietweedebetalingnadierentekoersverhoging?.

Question/Vraag3.d.:[10]

Theinterestrateisincreasedto24%afterthe5thpaymentbutyoucanalsoincreaseyour
annualpaymenttoR22000peryear.Howmanyyearsafterthe5thpaymentwilltheloanberepaid?
Dierentekoerswordnadie5debetalingverhoogtot24%maaruwordookinstaatgestelom
diejaarliksepremieteverhoognaR22000perjaar.Hoelanknadie5debetalingsalditneemomdie
leningterugtebetaal?.
Question/Vraag4:[20]
Question/Vraag4.a.:[4]

A:012345

1000
100004/7

B:0123

900
11000

IftherequirementisfiniteandtheMARR=20%,withtheinformationavailableto
you,determinewhichalternativeisthemosteconomicaloneofAandB.
IndiendiebehoeftekorttermynisendieMARR=20%,metdieinligtingtotjou
beskiking,bepaalwatteralternatief,AofBdiemeesekonomieseeenis.

Question/Vraag4.b.:[4]4000

A:012345

1000
100005000

B:0123

900
11000

IftherequirementisfiniteandtheMARR=20%,withtheinformationavailableto
you,determinewhichalternativeisthemosteconomicaloneofAandB.Thesalvagevalueischanging
byR2000peryear.
IndiendiebehoeftekorttermynisendieMARR=20%,metdieinligtingtotjou
beskiking,bepaalwatteralternatief,AofBdiemeesekonomieseeenis.Dieskrootwaardeverander
teenR2000perjaar.

5/7

Question/Vraag4.c.:[4]4000
2700

A:012345
100005000
4000

B:0123

11000

IftherequirementisfiniteandtheMARR=20%,withtheinformationavailableto
you,determinewhichalternativeisthemosteconomicaloneofAandB.Thesalvagevalueischanging
byR2000peryear.
IndiendiebehoeftekorttermynisendieMARR=20%,metdieinligtingtotjou
beskiking,bepaalwatteralternatief,AofBdiemeesekonomieseeenis.Dieskrootwaardeverander
teenR2000perjaar.
Question/Vraag4.d.:[4]4000
3000

A:012345

100005000
4000

B:0123

11000

IftherequirementisfiniteandtheMARR=20%,withtheinformationavailableto
you,determinewhichalternativeisthemosteconomicaloneofAandB.Thesalvagevalueischanging
byR2000peryear.
IndiendiebehoeftekorttermynisendieMARR=20%,metdieinligtingtotjou
beskiking,bepaalwatteralternatief,AofBdiemeesekonomieseeenis.Dieskrootwaardeverande
teenR2000perjaar.6/7

Question/Vraag4.e.:[4]
Iftherequirementinquestion4.d.becomesinfinite(longterm),whichalternativeshouldbethe
mosteconomicalone?
Indiendiebehoefteinvraag4.d.nalangtermynverander,watteralternatiefsaldiemees
ekonomieseeenwees?.

7/7
End/Einde


MEMORANDUMBIE310SECONDTEST2008.

Question/Vraag1:[15]

ActualRandDomain/WerklikeRandDomein:
30000G=?
01101520
i=12%i=16%compoundedi=24%compounded
semiannuallyquarterly
f=5%peryear/jaar

f=8%peryear/jaar

i`1(Y10)(crd ) =

f=12%peryear/jaar

1+ 0.1664
1+ 0.2624
1 i`1(Y10)(crd ) =
1
1+ 0.08
1+ 0.12

=0.08=0.12714
1

ConstantRandDomain/KonstanteRandDomein:

01020Years/Jaar

50000

PV`(y10)(CRD)=50000+50000(P/A,8,5)+50000(P/A,12.714,5)(P/F,8,5)
=50000+199635+120529

=370164
2

PV ( y10)( ARD) = 370164(1 + 0.05)10 = 602958

30000(F/A,12,10)+G(F/G,12,10)=602958
30000(17.5487) +

G (1 + 0.12)10 1 10G
= 602958

0.12
0.12
0.12

526461+146.239G83.33G=602958
62.909G=76497
G=1216

Question/Vraag2:[16]
0Q1Q2Q3Q4Q5Q6Q7Q8Quarters/Kwartale

500
Question/Vraag2.a.:[2]

CalculatetheNetPresentValueiftheinterestrateis12%compoundedannually.
2

NPV=2000(P/A,12,2)=2000(1.6901)=3380

Question/Vraag2.b.:[2]
CalculatetheNetPresentValueiftheinterestrateis12%compoundedquarterly.
NPV=500(P/A,3,8)=500(7.0197)=3509.85

Question/Vraag2.c.:[4]
CalculatetheNetPresentValueiftheinterestrateis12%compoundedmonthlyandn=8.

i a = 1 +

0.03
1 = 0.0303
3

(1 + 0.0303)8 1
= 3505.45
8
0.0303(1 + 0.0303)

NPV = 500( P / A,3.03,8) = 500

Question/Vraag2.d.:[4]
CalculatetheNetPresentValueiftheinterestrateis12%compoundedmonthlyandn=24.
A=500(A/F,1,3)=500(0.33002)=165.01
NPV=165.01(P/A,1,24)=165.01(21.2434)=3505.16

2
2

Question/Vraag2.e.:[4]
0Y/J1Y/J2Y/J3

5000

andn=1.

CalculatetheNetPresentValueiftheinterestrateis12%compoundedquarterly

0.12
ia = 1 +

PV =

4 .3

1 = 0.42576

5000

(1 + 0.42576 )

= 3506.90

Question/Vraag3:[20]
YounegotiatedaloanworthR75000toberepaidin10equalannualpayments.Theintereston
theloanis20%.Afterthe5thpaymentyouareinformedthattheinterestpayablewillincreaseto24%.
75000

0156710

i=20%i=24%
Question/Vraag3.a.:[2]
Whatistheannualpayment?
A(20%)=75000(A/P,20,10)=75000(0.23852)=17889

Question/Vraag3.b.:[4]
2

Whatistheannualpaymentaftertheincreaseoftheinterestrate?
U5=75000(F/P,20,5)17889(F/A,20,5)=75000(2.4883)17889(7.4416)=53499.72
A(24%)=53499.72(A/P,24,5)=53499.72(0.36425)=19487.27
Question/Vraag3.c.:[4]

Whatistheinterestcomponentofthesecondpaymentaftertheincreaseoftheinterestrate?
4

It=19487.27(P/A,24,4)0.24=19487.27(2.4043)0.24=11244.77

Question/Vraag3.d.:[10]

Theinterestrateisincreasedto24%afterthe5thpaymentbutyoucanalsoincreaseyour
annualpaymenttoR22000peryear.Howmanyyearsafterthe5thpaymentwilltheloanberepaid?

(1 + i ) n 1

n
i (1 + i )

P = A

(1 + 0.24) n 1

n
0.24(1 + 0.24)

53498.84 = 22000

1 (1.24) n = 0.583623
(1.24) n = 2.40166
nlog1.24=log2.40166
0.093421n=0.38051
n=4.07y/j

Question/Vraag4:[20]
Question/Vraag4.a.:[4]

A:012345

1000
10000

B:0123

900
11000

IftherequirementisfiniteandtheMARR=20%,withtheinformationavailable
toyou,determinewhichalternativeisthemosteconomicaloneofAandB.
NPV(A)=100001000(P/A,20,3)=100001000(2.1065)=12106.5
NPV(B)=11000900(P/A,20,3)=11000900(2.1065)=12895.85
AlternativeAmosteconomicalone.
Question/Vraag4.b.:[4]4000

A:012345

1000
100005000

B:0123

900
11000


IftherequirementisfiniteandtheMARR=20%,withtheinformationavailableto
you,determinewhichalternativeisthemosteconomicaloneofAandB.Thesalvagevalueischanging
byR2000peryear.
80004000

A:012345

1000
10000
NPV(A)=100001000(P/A,20,3)+8000(P/F,20,3)=100001000(2.1065)+6000(0.5787)=7476.9
NPV(B)=11000900(P/A,20,3)+5000(P/F,20,3)=11000900(2.1065)+5000(0.5787)=10002
AlternativeAmosteconomicalone.
Question/Vraag4.c.:[4]4000
2700

A:012345
100005000
4000

B:0123

110005/6

IftherequirementisfiniteandtheMARR=20%,withtheinformationavailableto
you,determinewhichalternativeisthemosteconomicaloneofAandB.Thesalvagevalueischanging
byR2000peryear.
NPV(A)(5y)=10000+2700(P/A,20,5)+4000(P/F,20,5)

=10000+2700(2.9906)+4000(0.4019)

=317.78
NPV(A)(3y)=10000+2700(P/A,20,3)+8000(P/F,20,3))

=10000+2700(2.1065)+8000(0.5787)

=+317.15

NPV(B)(3y)=11000+4000(P/A,20,3)+5000(P/F,20,3)
=11000+4000(2.1065)+5000(0.5787)
=+319.5
AlternativeBmosteconomicalone.
Question/Vraag4.d.:[4]4000
3000

A:012345

100005000
4000

B:0123

11000

IftherequirementisfiniteandtheMARR=20%,withtheinformationavailableto
you,determinewhichalternativeisthemosteconomicaloneofAandB.Thesalvagevalueischanging
byR2000peryear.
NPV(A)(5y)=10000+3000(P/A,20,5)+4000(P/F,20,5)
=10000+3000(2.9906)+4000(0.4019)
=+579.4
NPV(B)(3y)=11000+4000(P/A,20,3)+5000(P/F,20,3)
=11000+3500(2.1065)+5000(0.5787)
=+319.5
AlternativeAmosteconomicalone.
Question/Vraag4.e.:[4]
Iftherequirementinquestion4.d.becomesinfinite(longterm),whichalternativeshouldbethe
mosteconomicalone?

AE(A)=579.4(A/P,20,5)=579.4(0.33438)=193.74
AE(B)=319.5(A/P,20,3)=319.5(0.47473)=151.67
AlternativeAmosteconomicalone.