ES 10- Engineering Economy

Final Requirement

Present Economic Studies

1) An equipment installation jon in the completion stage can be completed in 40 days of 8 hour day work, with 40 men
working. With contract expiring in 30 days, the mechanical engineer contractor decided to add 10 men on the job,
overtime not being permitted.
a. If the liquidated damages is 2,000 per day of delay, and the men are paid 100 per day, will the engineer be
able to complete the job on time?
b. How much would he save money with the addition of workers?

ES 10 Engineering Economy
Present Economic Studies
Final Requirement

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2) The quarrying cost of marble and granite blocks plus delivery cost to the processing plant each is 2,400 per cubi meter.
Processing cost of marble into tiles is 250 per square meter and that of granite into tiles also is 650 per square meter.
The marble has a net yield of 40 square meters of block and sells at 500 per square meter, and granite gives a net yield
of 50 square meters of tiles per cubic meter of block and sells 1,100 per square meter.
a. Determine the more profitable material considering all other cost to the same
b. How much is the difference in profit?

ES 10 Engineering Economy
Present Economic Studies
Final Requirement

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3) A paint manufacturing company uses a sand mill for fine grinding of paint with and output of 100 liters per hour using
glass beadsand grinding media. Media load in the mill is 25 kg costing 200 per kg, and is fully replenishedin 2 months
time at 8 hours per day operation, 25 days per month. A ceramics grinding media is offered to this paint company,
costing 400 per kg and needs 30 kg load in the sand mill, but guarantees an output of 120 liters per hour and full
replenishment of media in 3 months.
a. If the profit on paint production is 15 per liter, which is profitable to use, glass beads or ceramics as grinding
media?
b. How much is the difference in profit?

ES 10 Engineering Economy
Present Economic Studies
Final Requirement

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4) A small scale industry was to be set up at the Carmona Resettlement project. It was decided that a carpentry shop for
the manufacture of school desks would be a good choice considering availability of labor and demand for school desks
for the year. Due to the limited funds, the sponsoring organization directed that the project objective is primarily for
the generation of jobs for the unemployed rather that profit making. Given the following information
Ccost of Labor per school desk
Carpenter
Sander Helper
Vanisher Helper

a.
b.
c.

350.00
250.00
200.00

Cost of Materials per school

desk
Wood
100.00
Varnish
85.00
Nails
60.00
Sand Paper
50.00

Variable Cost
- 150.00/desk
Fixed Charges
- 200.00/month
If the school desk sells for 1,200.00 how many pieces must be produced per mont to meet the primary
project objective without incurring losses?
If 300,000.00 additional working capital is borrowed at 6% interest rate compounded annually payable at the
end of the 3rd year, how much total interest is accumulated?
With the additional loan solely used for direct labor cost and materials, how many desks can be manufactured
in preparation for the opening of classes?

ES 10 Engineering Economy
Present Economic Studies
Final Requirement

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5) A building contractor is faced with the problem of possibly paying liquidated damages 3,000 per day for delay in the

completion of his work in accordance with the contract. The facts or data are the following:
1) Number of days left on the contract time - 30 days
2) At present, the working force is
40 skilled workers with a daily wage of 450
20 unskilled workers with a daily wage of 200
3) The daily wage is based on an 8-hour days work
4) If he maintains the present number of men, he will finish the work
in 50 days
5) Overtime rate is 25% more than the regular rate
Analyze the following cases:
Case I. If a he allows the present working-force to work overtime of two hours a day, in how many days will he finish
the work? How much are his savings or losses?
Case II. If the contractor put additional men (maintaining the ratio of two skilled workers to one unskilled worker) in
order to finish the work on time, how many will he add? Consider no overtime work. How much are his savings or
losses?
Case III. Should the contractor allow overtime work of two hours a day, how many men will he add in order to finish
the work on time? How much are his savings or losses?

ES 10 Engineering Economy
Present Economic Studies
Final Requirement

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