Engineering Economy (MS291)

Instructor: Dr. Ammar Ali Gull

Assignment No. 01

Instructions:
 This assignment is for both sections (A & B).
 Submission date is February 25, 2019 (Monday) during class timing.
 No assignment will be accepted after the deadline.
 Assignment should be on A4 pages.
 Clearly mention your Name, Reg No, Faculty and Section on the top right
corner of the title page.
 No need to submit assignment in file cover or folder.
 Answer all questions.

Question 01: Germany spends an estimated €100,000 per year on cloud seeding efforts,
which includes using antiaircraft guns and rocket launchers to fill the sky with silver iodide.
In the United States, utilities that run hydroelectric dams are among the most active cloud
seeders, because they believe it is a cost-effective way to increase limited water supplies by
10% or more. If the yields of cash crops will increase by 8% each year for the next 3 years
because of extra irrigation water captured behind dams during cloud seeding, what is the
maximum amount the farmers should spend now on the cloud seeding activity? The value
of the cash crops without the extra irrigation water would be €500,000 per year. Use an
interest rate of 10% per year.

Question 02: Southern systems make a panel machine that emits low vibration and
processes stress-relieved aluminum panels measuring up to 10,000 mm long. The company
wants to borrow money for a new production facility. If the company offers to repay the
loan with $50,000 in year 1 and amounts increasing by $8,000 each year through year 5,
how much can the company borrow at an interest rate of 10% per year?

Question 03: Income from a precious metals mining operation has been decreasing
uniformly for 5 years. If income in year 1 was $300,000 and it decreased by $30,000 per year
through year 4. How much is the annual worth of the income at 10% per year?
Sample Title Page
Assignment No # 1
(MS291) Engineering Economy
Name:
Reg No:
Faculty:
Section|: