ENCE 351Bachelor in Mechanical Engineering · Semester 62 Papers Available
Engineering Economics
Past examination question papers and complete curriculum syllabus for Engineering Economics (ENCE 351), Bachelor in Mechanical Engineering Semester 6 under Institute of Engineering (IOE), Tribhuvan University.
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Most Frequently Asked Questions
Top recurring IOE board exam questions for Engineering Economics with verified mark schemes, formula notation, and recurrence frequency.
Showing 30 of 30 top repeated questions
Introduction
2 Questions
#1Repeated 3 Times[6 Marks]Introduction
Define engineering economics. Discuss the role of engineering economics in project planning and engineering decision making. Explain the concept of consumer goods, producer goods, and circular flow of wealth.
Appeared in:2080 Chaitra2078 Chaitra2073 Bhadra
#2Repeated 3 Times[6 Marks]Introduction
Define Minimum Attractive Rate of Return (MARR). Discuss factors influencing MARR: Weighted Average Cost of Capital (WACC), opportunity cost of investment capital, project risk premium, and corporate taxation policies.
Appeared in:2082 Bhadra2080 Chaitra2078 Bhadra
Time Value of Money
6 Questions
#1Repeated 4 Times[6 Marks]Time Value of Money
Elaborate nominal and effective interest rates with a suitable example. A bank advertises a nominal loan interest rate of 12% compounded monthly. Calculate the effective annual interest rate. If compounding is continuous, what will be the effective rate?
Appeared in:2082 Chaitra2081 Ashwin2078 Chaitra2076 Baisakh
#2Repeated 4 Times[8 Marks]Time Value of Money
Explain the time value of money and cash flow diagrams. An engineer plans to deposit Rs. 50,000 at the end of the first year, increasing deposits by Rs. 10,000 each year for 10 years at an interest rate of 10% per annum. Find the equivalent uniform annual deposit ($A$) and total present worth ($P$).
Appeared in:2082 Kartik2080 Chaitra2077 Chaitra2075 Baisakh
#3Repeated 3 Times[8 Marks]Time Value of Money
A borrower secures a loan of Rs. 1,000,000 to be repaid in equal annual installments over 5 years at an annual interest rate of 10%. Prepare the complete loan amortization schedule showing beginning balance, payment, principal repayment, interest payment, and ending balance for each year.
Appeared in:2082 Chaitra2078 Chaitra2075 Baisakh
#4Repeated 3 Times[8 Marks]Time Value of Money
Derive the formulas for Discrete Cash Flow Compound Interest Factors: Single Payment Compound Amount $(F/P, i, n) = (1+i)^n$, Present Worth $(P/F, i, n) = (1+i)^{-n}$, Uniform Series Present Worth $(P/A, i, n) = \frac{(1+i)^n - 1}{i(1+i)^n}$, and Capital Recovery Factor $(A/P, i, n) = \frac{i(1+i)^n}{(1+i)^n - 1}$.
Appeared in:2082 Bhadra2081 Chaitra2078 Kartik
#5Repeated 3 Times[8 Marks]Time Value of Money
Derive the Linear Gradient Series Present Worth Factor $(P/G, i, n) = \frac{1}{i}\left[\frac{(1+i)^n - 1}{i(1+i)^n} - \frac{n}{(1+i)^n}\right]$ and Uniform Series Gradient Factor $(A/G, i, n)$. Solve an engineering cash flow problem with increasing annual maintenance costs.
Appeared in:2082 Bhadra2080 Chaitra2077 Magh
#6Repeated 3 Times[8 Marks]Time Value of Money
Explain Nominal Interest Rate ($r$) and Effective Annual Interest Rate ($i_a = (1 + r/m)^m - 1$). Derive the continuous compounding effective rate $i_a = e^r - 1$. Calculate the accumulated balance of Rs. 500,000 invested at nominal 12% compounded monthly vs continuously for 5 years.
Appeared in:2082 Bhadra2081 Chaitra2079 Chaitra
Methods of Economic Analysis
10 Questions
#1Repeated 4 Times[8 Marks]Methods of Economic Analysis
Two mutually exclusive project alternatives have unequal service lives. Explain the Least Common Multiple (LCM) of lives approach and Study Period approach. Evaluate Alternative A (Initial cost: Rs. 1,000,000, Annual benefit: Rs. 300,000, Life: 3 years) and Alternative B (Initial cost: Rs. 1,500,000, Annual benefit: Rs. 350,000, Life: 6 years) at MARR = 12% using Present Worth method.
Appeared in:2082 Kartik2081 Ashwin2078 Chaitra2075 Bhadra
#2Repeated 4 Times[8 Marks]Methods of Economic Analysis
Define Internal Rate of Return (IRR) and Minimum Attractive Rate of Return (MARR). Why is simple IRR comparison misleading for mutually exclusive projects? Explain the incremental investment analysis ($\Delta$IRR) procedure.
Appeared in:2081 Ashwin2079 Chaitra2076 Bhadra2073 Bhadra
#3Repeated 4 Times[8 Marks]Methods of Economic Analysis
Explain conventional and modified Benefit-Cost (B/C) ratio methods. Using modified B/C ratio with Annual Worth formulation at MARR = 9%, select the best alternative among three mutually exclusive public flood-control projects using incremental B/C analysis.
Appeared in:2082 Kartik2079 Chaitra2077 Chaitra2075 Baisakh
#4Repeated 3 Times[8 Marks]Methods of Economic Analysis
Find the Internal Rate of Return (IRR) of a project having an initial investment of Rs. 500,000, annual net cash inflows of Rs. 140,000 for 5 years, and a salvage value of Rs. 50,000 at the end of year 5 using linear interpolation.
Appeared in:2079 Chaitra2076 Baisakh2070 Bhadra
#5Repeated 3 Times[6 Marks]Methods of Economic Analysis
Write the advantages and limitations of the simple payback period method. How does the discounted payback period method overcome the deficiencies of the simple payback period? Illustrate with a numerical example.
Appeared in:2080 Chaitra2078 Chaitra2075 Bhadra
#6Repeated 3 Times[6 Marks]Methods of Economic Analysis
Define Capitalized Cost. A municipal water supply intake structure requires an initial construction cost of Rs. 20,000,000, annual maintenance cost of Rs. 300,000, and major overhaul costs of Rs. 2,000,000 every 10 years indefinitely. Calculate the capitalized cost at an interest rate of 8% per annum.
Appeared in:2082 Kartik2079 Chaitra2076 Baisakh
#7Repeated 3 Times[8 Marks]Methods of Economic Analysis
Compare Mutually Exclusive Investment Alternatives with Unequal Useful Lives using the Present Worth (PW) method over the Least Common Multiple (LCM) of lives and Capitalized Worth (CW) method for perpetual projects ($P = A/i$).
Appeared in:2082 Bhadra2080 Chaitra2078 Bhadra
#8Repeated 3 Times[8 Marks]Methods of Economic Analysis
Explain Internal Rate of Return (IRR). Why is Incremental Rate of Return ($\Delta\text{IRR}$) analysis mandatory when comparing mutually exclusive alternatives? Discuss the multiple IRR problem for non-simple cash flows using Descartes' Rule of Signs.
Appeared in:2082 Bhadra2081 Chaitra2078 Kartik
#9Repeated 3 Times[8 Marks]Methods of Economic Analysis
Explain External Rate of Return (ERR) using the Modified Internal Rate of Return (MIRR) approach with financing rate and reinvestment rate (MARR). Why does ERR eliminate the multiple IRR dilemma?
Appeared in:2082 Bhadra2080 Chaitra2076 Chaitra
#10Repeated 3 Times[8 Marks]Methods of Economic Analysis
Explain Conventional Benefit-Cost Ratio ($B/C$) and Modified Benefit-Cost Ratio for public project evaluation. Detail how user benefits, disbenefits, operating costs, and capital investments are treated in incremental $\Delta(B/C)$ analysis.
Appeared in:2082 Bhadra2081 Chaitra2079 Chaitra
Replacement Analysis
4 Questions
#1Repeated 4 Times[8 Marks]Replacement Analysis
Define Break-Even Analysis. A manufacturing firm has fixed costs of Rs. 400,000 per year, variable cost of Rs. 120 per unit, and sells the product at Rs. 200 per unit. Determine: (a) Break-even sales volume, (b) Profit at an annual production of 8,000 units, and (c) Sales volume required to earn a target profit of Rs. 160,000.
Appeared in:2082 Kartik2080 Chaitra2077 Chaitra2075 Baisakh
#2Repeated 4 Times[8 Marks]Replacement Analysis
Explain the replacement problem: Defender vs Challenger. Why should sunk costs be ignored in replacement analysis? Determine the Economic Service Life (ESL) of an asset given declining salvage values and increasing operation & maintenance costs.
Appeared in:2082 Chaitra2081 Ashwin2079 Chaitra2076 Baisakh
#3Repeated 3 Times[8 Marks]Replacement Analysis
Explain Replacement Analysis: Defender vs Challenger. Define Sunk Cost, Opportunity Cost, and Economic Service Life (ESL) based on Minimum Equivalent Uniform Annual Cost (EUAC).
Appeared in:2082 Bhadra2080 Chaitra2078 Kartik
#4Repeated 3 Times[8 Marks]Replacement Analysis
Perform Break-Even Analysis for manufacturing operations. Derive the break-even production volume $Q_{BE} = \frac{FC}{P - VC}$ and profit equation. How is multi-alternative break-even analysis used to choose between automated and manual machinery?
Appeared in:2082 Bhadra2081 Chaitra2079 Chaitra
Risk Analysis
4 Questions
#1Repeated 3 Times[6 Marks]Risk Analysis
Differentiate between actual dollars and constant dollars. Explain the relationship between market (nominal) interest rate ($i$), real interest rate ($i'$), and inflation rate ($f$) given by $i = (1 + i')(1 + f) - 1$. Calculate the present worth of cash flows adjusted for 6% annual inflation.
Appeared in:2081 Ashwin2078 Chaitra2076 Bhadra
#2Repeated 3 Times[6 Marks]Risk Analysis
Explain sensitivity analysis in engineering economic decisions. How is a sensitivity graph (spider diagram) constructed by varying key project parameters (investment cost, annual revenue, project life, MARR) by $\pm 10\%, \pm 20\%$?
Appeared in:2080 Chaitra2077 Chaitra2075 Bhadra
#3Repeated 3 Times[8 Marks]Risk Analysis
Explain Inflation and its impact on engineering economic evaluations. Differentiate between Constant Dollars (Real Dollars) and Current Dollars (Actual Dollars). Relate market interest rate ($i$), real interest rate ($i'$), and inflation rate ($f$) via Fisher's equation $1 + i = (1 + i')(1 + f)$.
Appeared in:2082 Bhadra2080 Chaitra2076 Chaitra
#4Repeated 3 Times[6 Marks]Risk Analysis
Explain Sensitivity Analysis and Scenario Analysis in engineering investment decisions. Construct a Sensitivity Graph showing percentage variations ($-20\%$ to $+20\%$) in initial investment, annual revenue, and MARR against Net Present Worth.
Appeared in:2082 Bhadra2081 Chaitra2077 Magh
Depreciation and Taxes
4 Questions
#1Repeated 5 Times[8 Marks]Depreciation and Taxes
A piece of machinery costs Rs. 800,000 with an estimated salvage value of Rs. 100,000 after a useful life of 5 years. Calculate the annual depreciation charge and book value at the end of each year using: (a) Straight Line Method (SLM), (b) Double Declining Balance Method (DDB), and (c) Sum of the Years' Digits (SYD) Method.
Appeared in:2082 Chaitra2080 Chaitra2078 Chaitra2075 Baisakh2069 Bhadra
#2Repeated 4 Times[8 Marks]Depreciation and Taxes
Explain how corporate income tax and depreciation tax shields affect project cash flows. Construct an After-Tax Cash Flow (ATCF) statement for an equipment purchase of Rs. 600,000 with annual taxable revenue of Rs. 250,000, operating costs of Rs. 50,000, straight-line depreciation over 5 years, and a tax rate of 25%.
Appeared in:2081 Ashwin2078 Chaitra2076 Bhadra2073 Bhadra
#3Repeated 3 Times[8 Marks]Depreciation and Taxes
Compare Depreciation Methods: Straight Line (SL), Declining Balance (DB), Double Declining Balance (DDB), and Sum-of-the-Years'-Digits (SYD). Calculate the 3rd year depreciation charge and book value for an asset costing Rs. 2,000,000 with salvage value Rs. 200,000 after 5 years.
Appeared in:2082 Bhadra2080 Chaitra2077 Magh
#4Repeated 3 Times[8 Marks]Depreciation and Taxes
Explain After-Tax Cash Flow (ATCF) analysis. Derive $\text{ATCF} = (\text{Revenues} - \text{Expenses})(1 - t) + t \times \text{Depreciation}$, where $t$ is the corporate income tax rate. Evaluate after-tax PW of a manufacturing equipment project.
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Q: What is the pass mark for Engineering Economics?
The general current scheme is a 60-mark final theory exam and a 40-mark internal assessment, with pass marks of 24 and 16. Verify the course-specific syllabus above.
Q: Where can I find the complete syllabus for this subject?
The available chapter-wise syllabus and topic breakdown is indexed in the Syllabus section above, with links to the curriculum PDF source.