南航工程经济学双语期末考试题

The Final Examination Questions of “Contemporary Engineering Economics” 2015.6.10 Name: 牛xx Student No.: SX0000000 Score: Notice: 1.Honesty is the best policy. Please complete the examination by yourself independently. The talk and discussion between students are prohibited. 2.All the problems should be completed with Microsoft WORD and EXCEL. Do not omit analyzing or calculating process. 3.The electronic file name should be Examination Answer-2015- your name.DOC and Examination Answer-2015- your name.xls. 4.Print out the first page of your answers in DOC format and sign your name on the first page of your Answers. 5.Please complete your answer in time. Problem 1 Buy an apartment is the largest expenditure of the Chinese families. To help people buying apartment, the Government has established a Housing Fund Loan System (HFLS) to provide housing loans at lower interest rate than commercial lending rates. In January 2013, an young couple buy an apartment which cost RMB960,000. They should pay 30% of the cost as first payment of the apartment. Meanwhile, they borrowed money from Industrial and Commercial Bank of China(ICBC) in Housing Fund Loan(公积金贷款) to pay the remained 70% of the cost at the annual interest rate of 4.50%. The young couple chose equal repayment monthly from January 2013 for 10 years. (1) Compute the uniform monthly repayment for the Housing Fund Loan to the bank as well as each year payments of the interest and repayments of the principal from January 2013 to December 2022 for 10 years. (2) In November 22, 2014, the government changed the housing policy by reducing HFLS standard interest rate to 4.25% and will validate from January 2015 for existing borrowers. The young couple withdraw their HFLS saving of MRB21,000 to repay the bank in advance repayment of part of the principal in December 2014. Based on the reducing interest rate and repayment of part principal, compute the uniform repayment to the bank as well as the payments of the interest and repayments of the principal from January 2013 to December 2012. 1 Problem 2 An industrial engineer at Lagrange Textile Mill proposed the purchase of scanning equipment for the company's warehouse and weave rooms. The engineer felt that the purchase would ensure a better system of locating cartons in the warehouse by recording the location of the cartons and storing this data in the computer. The estimated investment, annual operating and maintenance costs, and expected annual savings are as follows: ●Cost of equipment and installation: $48,500 ●Project life: 6 years ●Expected salvage value: $0 ●Investment in working capital (fully recoverable at the end of project life): $10,000 ●Expected annual labor and materials savings: $62,800 ●Expected annual expenses: $8120 ●Depreciation method: 5-year MACRS. The firm's marginal tax rate is 35%. (1)Determine the net after-tax cash flows over the project life. (2)Compute the IRR for this investment. (3)At MARR = 18%, is this project acceptable? Problem 3 American Chemical Corporation (ACC) is a multinational manufacturer of industrial chemical products. ACC has made great progress in energy-cost reduction and has implemented several cogeneration(废热发电) projects in the United States and Puerto Rico, including the completion of a 35 megawatt (MW) unit in Chicago and a 29 MW unit at Baton Rouge. The division of ACC being considered for one of its more recent cogeneration projects is a chemical plant located in Texas. The plant has a power usage of 80 million kilowatt hours (kWh) annually. However, on the average, it uses 85% of its 10 MW capacity, which would bring the average power usage to 68 million kWh annually. Texas electric presently charges $0.09 per kWh of electric consumption for the ACC plant, a rate that is considered high throughout the industry. Because ACC's power consumption is so large, the purchase of a cogeneration unit is considered to be desirable. Installation of the cogeneration unit would allow ACC to generate their own power and to avoid the annual $6,120,000 expense to Texas Electric. The total initial investment cost would be $10,500,000: $10,000,000 for the purchase of the power unit itself, a gas fired 10 MW Allison 571, and engineering, design and site preparation. $500,000 includes the purchase of interconnection equipment, such as poles and distribution lines that will be used to interface the cogenerator with the existing utility facilities. ACC management has decided to raise the $10.5 million by selling bond: Investment bankers have indicated that 12-year 9% bonds could be sold at a price of $900 for each $1000 bond. The flotation costs would be 1.9% to raise $10.5 million. When the bonds mature at the end of year 12, the total face value of the bonds must be paid to the bondholders. The annual cash flow is comprised of many factors: maintenance, standby power, overhaul costs, and other miscellaneous expenses. Due to obsolescence, the expected life of the cogeneration project will be 12 years, after which Allison will pay ACC $1 million for salvage of all equipment. The revenue will include annual savings of ACC own power, and be incurred from the sale of excess electricity to the utility company, bring in an annual revenue of $480,000. ACC’s marginal tax rate is 36%, and their MARR is 27%. The anticipated costs and revenues are summarized as follows: ----------------------------------------------------------------------------------------------- Initial Investment Cogeneration unit, engineering, design, and site preparation (15-year MACRS class) $10,000,000 Interconnection equipment (5-year MACRS class) $500,000 Salvage after 12-year’s use $1,000,000 Annual expenses Operation and Maintenance $500,000 Miscellaneous expense $1,000,000 Standby power $6,400 Fuel $1,280,000 Revenues Annual savings of ACC own power $6,120,000 Sale of excess power to Texas Electric $480,000 ------------------------------------------------------------------------------------------------ (1) Determine the flotation costs and the number of $1000 par value bonds to be sold to raise $10.5 million. (2) Determine the net cash flow from the cogeneration project and its NPW.