Information Systems And Engineering Economics Set 24

Q1 | An investment project costs P. It is expected to have an annual net cash ?ow of 0.125P for 20 years. What is the project’s payback period?

Q2 | Find the net present worth of the following cash ?ow series at an interest rate of 10%

Q3 | You are considering buying an old house that you will convert into an o?ce building for rental. Assuming that you will own the property for 10 years, how much would you be willing to pay for the old house now given the following ?nancial data?

Q4 | Your R&D group has developed and tested a computer software package that assists engineers to control the proper chemical mix for the various process manufacturing industries. If you decide to market the software, your ?rst year operating net cash ?ow is estimated to be$1,000,000. Because of market competition, product life will be about 4 years, and the product’s market share will decrease by 25% each year over the previous year’s share. You are approached by a big software house which wants to purchase the right to manufacture and distribute the product. Assuming that your interest rate is 15%, for what minimum price would you be willing to sell the software?

Q5 | Find the capitalized equivalent worth for the project cash ?ow series at an interest rate of 10%.

Q6 | The following table contains a summary of how a project’s balance is expected to change over its 5 year service life at 10% interest.:Which of the following statements is incorrect?

Q7 | Reconsider the project balance table calculated at 10% given in 5.9.:Which of the following statements is correct?

Q8 | A newly constructed water treatment facility cost $2 million. It is estimated that the facility will need renovating every 30 years at a cost of $1 million. Annual repairs and maintenance are estimated to be$100,000 per year. At an interest rate of 6%, determine the capitalized cost of the facility.

Q9 | Consider the following two investment alternatives:Suppose that your ?rm needs either machine for only 2 years. The net proceeds from the sale of machine B are estimated to be $200. What should be the required net proceeds from the sale of machine A so that both machines could be considered economically indifferent at an interest rate of 10%?

Q10 | Gene Research, Inc. just ?nished a 4-year R&D and clinical trials successfully and expects a quick approval from the Food and DrugAdministration. If the company markets the product on their own, it requires $30 million immediately (n ? = ? 0) to build a newmanufacturing facility, and it is expected to have a 10 year product life. The R&D expenditure in the previous years and the anticipated revenues that the company can generate over the next 10 years is summarized as follows:Merck, a large drug company is interested in purchasing the R&D project and the right to commercialize the product from Gene Research, Inc., immediately (nD =D 0). What would be astarting negotiating price for the project from Merck? Assume that Gene’s MARR ? = 20%.

Q11 | A manufacturing company is considering two mutually exclusive machines E1 and E2 with the following cash ?ow information:Which machine would you recommend if the company needs either machine for only 3 years? Assume a MARR of 12%

Q12 | You just purchased a pin inserting machine to relieve some bottleneck problems that have been created in manufacturing a PC board. The machine cost $56,000 and has an estimated service life of 5 years. At that time, the estimated salvage value would be $5,000. The machine is expected to operate 2,500 hours per year. The expected annual operating and maintenance cost would be $6,000. If your ?rm’s interest rate is 15%, what would be the machine cost per hour?

Q13 | An asset with a ?rst cost of $100,000 is depreciated over 5-year period. It is expected to have a $10,000 salvage value at the end of 5 years.Using the straight-line method, what is the book value at the end of year 2?

Q14 | The rate of tax that is leivable on STCG arising from transfer of Equity shares of aCompany or units of an Equity oriented fund is

Q15 | For an industrial undertaking ful?lling the conditions, additional depreciation in respectof a machinery costing Rs.10 lakh acquired and installed on October 3, 2005 is

Q16 | A.O.P should consist of :

Q17 | Body of individual should consist of :

Q18 | 24. As per section 30, which expenditure incurred for a building used for the business or profession shall not be allowed as deduction?

Q19 | 25. Group of assets falling within a class of assets comprising of tangible & intangible assets is known as :

Q20 | 28. If the Plant & Machinery is used for less than 180 days in the year of its acquisition, then,at what rate the depreciation on that asset should be provided under section 32?

Q21 | If the Computer is purchased on 11th May, 2018 then at what rate depreciation will be provided on it?

Q22 | 30. If the machinery is purchased on 4th October, 2018 then at what rate depreciation will be provided on it?

Q23 | 31. The transfer of one or more undertakings as a result of the sale for a lump sum consideration without values being assigned to the individual assets and liabilities in the sale is known as :

Q24 | 32. What is the rate of depreciation charged on computer software?

Q25 | 33. Rate of depreciation chargeable onfully temporary wooden structure for the assessment year 2019-20 is