Total number of printed pages — 2
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MCC 104

First Semester Examination — 2012-13

ENGINEERING ECONOMICS AND COSTING

Full Marks -70

Time: 3 Hours

Answer Question No.1 which is compulsory and any five from the rest.

The Figure in the right hand margin indicate marks.

Q1. Answer the following questions: 2*10

(a)Why should,you study engineering economics ?

(b)What do you mean by promotional elasticity of demand ?

(c) What is an iso-quant ?

(d) Define opportunity cost. Explain with example?

(e) What is benefit cost ratio ?

(f) What do you mean by margin of safety "?

(g)What are the bases through which worthiess of the projects are compared ?

h)Distinguish between revenue dominated cash flow and cost dominated cash flow.

i)Distinguish between NPV and IRR

j)What are the constituents of the Financial System in a country ?

2.Penguine Comp. is planning to reduce the Price of its refrigerators by 10%. It is also expected that the disposable income will increase by 6% during the same period. The price and income elasticity are estimated to be — 1.3 and 2.0 respectively. Currently Penguine is selling 200,000 pieces per year. How much can Penguine hope to sell after the above changes in price and income ? 10

3. Discuss with diagram how price is determined under perfect competition.10

4. A Company has purchased an equipment whose first cost iRs,1,00,000 with an estimated life of 8 years. The estimated salvage value of the equipment at the end of its life time 20,000.Determine the depreciation charge and book value at the end of various years using straight line method and declining balance method of depreciation. 10

5.The following data are available from the racords of a company : 10

Rs. | |

Sales | 1,20,000 |

Fixed costs | 30,000 |

Variable cost | 60,000 |

You are required to

(a) Calculate the Break-even point

(b) Calculate the effect of 10% increase in sale price.

(c) What is the MOS at a profit level of Rs. 40,000.

(d)What is the sales at a desired prolit level of Rs. 50,000.

6.What is central banking ? Discuss the various functions of the central bank of a country. 10

7.A company invests in one of the two mutually exclusive alternatives. The life of both alternatives is estimated to be 5 years with the following investments, annual return and salvage values 10

Alternatives | ||

A | B | |

Investment (Rs.) | 3,00,000 | 3,50,000 |

Annual equal return (Rs.) | ||

1,00,000 | ||

Salvage value (Rs.) | 15,000 | 35,000 |

Determine the best alternative based on the annual equivalent method assuming i= 15%.

The Table values are given under

For n = 5; (F/P,i,n=2.011) (P/F, i, n= 0.4972) ; (F/A, i,n = 6.742) ; .(A/F,i, n = 0.148.3) (P/A,i, n = 3.3522) ; (A/P, i ,n = 0.3593) ; (A/G , i , n = 1.7228)

8. Draw a cost sheet using imaginary figures. What are its advantages? 10

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