EBMC3103 engineering economics

Question 1

Engineering economics involves formulating, estimating and evaluating the expected economic outcomes of alternatives designed to accomplish a defined purpose. Mathematical techniques simplify the economic evaluation of alternatives.Engineering economics helps with desicions, computer, mathematic, concept, and guidelines assist for people in their decision making process. Since most decision affect what will be done, the time frame of engineering economy is primarily the future.

Explain in detail how the three of elements beloware involved in decision on engineering economics:

                    i.         Cash flows

                  ii.         Times of occurance of cash flow

                iii.         Interest rate for time value of money

(40 Marks)

Question 2

Use the equivalent uniform annual cost of the investment (EUAC), justify which of the following alternatives is superior over 30 years period if the interest rate is 7% ?