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Engineering EconomY Test Duration: One Hour ThirtY Minutes Answer all questions.

l.

What will happen to the equilibrium price and quantity of palm oil in each of the

following cases?

(a) (b) 2.

Reduction in the price of maize oil' (5 marks) The invention of new and efficient palm oil processor machines. (5 marks)

An apparel manufacturing plant has estimated the variable cost to be RM25'00 per unit. Fixed costs are RMI million per year. The customers are charged RM42.50 per unit.
Find:-

,b4-

(a) (b) (c)

The break-even volume for this job.

(2 marks) The annual profit if sales is 100 000 units' (4 marks)

Briefly explain life-cycle cost'

(4 marks)

3.

Two mutually exclusive projects are being considered by Vori Sdn. Bhd. (VSB). The
data for the projects is shown in the table below:

Project A

Project B 250 000

Initial investments
Annual revenue Annual expenses
Salvage value

l 50 000

100 000

t00 000
40 000 42 000

55 000

l0

000

years. The MARR of VSB is l0% per year and the useful life of both projects are five

(a) (b) (c)

Determine the project that should be chosen based on the PW. (3 marks) Determine the project that should be chosen based on the lRR. (5 marks)

perform incremental analysis if the decision in (a) and (b) is not consistent.
Based on the incremental analysis result, determine the project that should be
chosen.

(2 marks)

No. Kad pengenalarn/No. ,"rrpo,

I.C No./Passport No.

No. Question No.

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