ISYE 220 – Engineering Economy –MOCK FINAL 1 NORTHERN ILLINOIS UNIVERSITY College of Engineering and Engineering Technology Department of Industrial and Systems Engineering De Kalb, IL 60115 Course : ISYE 220 Exam : FINAL Instructor : Dr. Suma Rajashankar Duration : 1 hour and 50 minutes Total Points: 50 Name: _____________________________________________________________ ISYE 220 – Engineering Economy –MOCK FINAL 2 PART A 1. Suppose you wish to accumulate $10,000 in a savings account 4 years from now, and the account pays you an interest rate of 5% per year, how much money must be deposited today? (4 pts) 2.   What value of X makes these two cash flows equivalent assuming an interest rate of 10%? (4 pts) Ans: Ans: ISYE 220 – Engineering Economy –MOCK FINAL 3 3. The operating cost of a small machine is $800 in year one, $900 in year two, $1000 in year three, increasing by $100 per year through year ten. At an interest rate of 8% per year, determine the equivalent annual worth of the machine. (4 pts) 4.   What is the future worth of an equal quarterly payment series of $2,500 for 10 years, if the interest rate is 9%, compounded monthly? (4 pts) Ans: Ans: ISYE 220 – Engineering Economy –MOCK FINAL 4 5. What is the capitalized cost of $10,000 for every 5 years forever, starting now at an interest rate of 10% per year. (4 pts) 6. Consider a project with a first cost (investment) of $250,000, an annual O&M cost of $50,000, annual revenue of $160,000, and a salvage value of $40,000 after a 10-year life. Find the annual worth of the project assuming an interest of 13% per year. (4 pts) Ans: ISYE 220 – Engineering Economy –MOCK FINAL 5 7. A permanent scholarship fund is started through a donation of $100,000. If five scholarships of $5,000 each are awarded each year beginning ten years from now, what is the rate of return ‘i’ for the invested money? (4 pts) Ans: ISYE 220 – Engineering Economy –MOCK FINAL 6 8. If a company invests $10,000 and receives $2,775 per year for five years, what is the rate of return on the investment? (2 pts) Ans: Ans: ISYE 220 – Engineering Economy –MOCK FINAL 7 PART B You have a choice for this PART. You could either answer (1) or (2) (Answering both will not help, the first choice will only be graded then!) 1. A small manufacturing company is considering purchasing a maintenance contract for its air conditioning systems. Since all of its systems are new, the company plans to begin the contract at the end of year four and continue through year ten. The cost of the contract is $3,200 per year and the company's minimum attractive rate of return i.

1. ISYE 220 – Engineering Economy –MOCK FINAL
1
NORTHERN ILLINOIS UNIVERSITY
College of Engineering and Engineering Technology
Department of Industrial and Systems Engineering
De Kalb, IL 60115
Course : ISYE 220
Exam : FINAL
Instructor : Dr. Suma Rajashankar
Duration : 1 hour and 50 minutes
Total Points: 50
Name:
_____________________________________________________
________

2. ISYE 220 – Engineering Economy –MOCK FINAL
2
PART A
1. Suppose you wish to accumulate $10,000 in a savings account
4 years from now, and the
account pays you an interest rate of 5% per year, how much
money must be deposited
today? (4 pts)

3. 2.
What value of X makes these two cash flows equivalent
assuming an interest rate of
10%? (4 pts)
Ans:
Ans:
ISYE 220 – Engineering Economy –MOCK FINAL
3
3. The operating cost of a small machine is $800 in year one,
$900 in year two, $1000 in
year three, increasing by $100 per year through year ten. At an
interest rate of 8% per
year, determine the equivalent annual worth of the machine. (4
pts)

4. 4.
What is the future worth of an equal quarterly payment series
of $2,500 for 10 years, if
the interest rate is 9%, compounded monthly? (4 pts)
Ans:
Ans:
ISYE 220 – Engineering Economy –MOCK FINAL
4
5. What is the capitalized cost of $10,000 for every 5 years
forever, starting now at an
interest rate of 10% per year. (4 pts)

5. 6. Consider a project with a first cost (investment) of $250,000,
an annual O&M cost of
$50,000, annual revenue of $160,000, and a salvage value of
$40,000 after a 10-year life.
Find the annual worth of the project assuming an interest of
13% per year. (4 pts)
Ans:
ISYE 220 – Engineering Economy –MOCK FINAL
5

6. 7. A permanent scholarship fund is started through a donation of
$100,000. If five
scholarships of $5,000 each are awarded each year beginning
ten years from now, what is
the rate of return ‘i’ for the invested money? (4 pts)
Ans:
ISYE 220 – Engineering Economy –MOCK FINAL
6

7. 8. If a company invests $10,000 and receives $2,775 per year
for five years, what is the rate
of return on the investment? (2 pts)
Ans:
Ans:
ISYE 220 – Engineering Economy –MOCK FINAL
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PART B
You have a choice for this PART. You could either answer (1)
or (2)
(Answering both will not help, the first choice will only be
graded then!)
1. A small manufacturing company is considering purchasing a
maintenance contract for its air
conditioning systems. Since all of its systems are new, the
company plans to begin the
contract at the end of year four and continue through year ten.

8. The cost of the contract is
$3,200 per year and the company's minimum attractive rate of
return is 12% per year.
a. Draw the cash flow diagram (1 pts)
b. What will the present worth of the contract be? (3 pts)
c. What will be the future worth of the contract? (3 pts)
d. If the company wishes to pre-pay the contract with uniform
payments in years one, two
and three only, what will be the amount of each payment? (3
pts)
ISYE 220 – Engineering Economy –MOCK FINAL
8
Ans:
ISYE 220 – Engineering Economy –MOCK FINAL
9
2. National Homebuilders, Inc., plans to purchase new cut and
finish equipment. Two
manufacturers offered the estimates shown below:

9. 1. Draw the cash flow diagram for both vendors. (2 pts)
2. Determine which vendor would be selected based on PW if
the MARR is 15% per
year (8 pts)
Vendor A Vendor B
First Cost, $ -15,000 -18,000
Annual Operating costs
(AOC), $/year -3,500
-3,100
Salvage Value S, $ 1,000 2,000
Life, years 6 9
ISYE 220 – Engineering Economy –MOCK FINAL
10
Ans:
ISYE 220 – Engineering Economy –MOCK FINAL
11

10. PART C
You have a choice for this PART. You could either answer (1)
or (2)
(Answering both will not help, the first choice will only be
graded then!)
1. Compare and pick the best the cost alternatives based on
incremental ROR analysis for a
MARR of 15%. All alternatives have the same lives with no
salvage value. (10 pts)
Alternatives Investment Operating Cost
A $5000 $240
B $3000 $875
C $4000 $500
D $2500 $1000
ISYE 220 – Engineering Economy –MOCK FINAL
12
Ans:

11. ISYE 220 – Engineering Economy –MOCK FINAL
13
3. Two stamping machines are under consideration for purchase
by a metal recycling
company. The manual model will cost $25,000 to buy with an
eight-year life and a
$5,000 salvage value. Its annual operating costs will be
$16,000. A computer-controlled
model will cost $95,000 to buy and it will have a twelve-year
life if upgraded at the end
of year six for $15,000. Its terminal salvage value will be
$23,000, with annual operating
costs of $7,500 for labor and $2,500 for maintenance. The
company's minimum attractive
rate of return is 18%.
a. Draw the cash flow diagram for both machines. (2 pts)
b. What is the annual worth of the computer-controlled
machine? (3 pts)
c. What is the equivalent annual worth of the manual model?
(3 pts)
d. Determine the capital recovery costs for the manual model
(2 pts)
ISYE 220 – Engineering Economy –MOCK FINAL
14

12. Ans:
SNHU 107 Final Project II: Academic Success Plan Template
This template can be customized to your liking, but all sections
are required in order to receive scores on the critical elements
of the Final Project II Rubric. If you wish to use a modified
template, have your instructor approve an early draft.
Name:
Student ID:
Program(s) of Study (Major):
Anticipated Graduation Date:
Section I: Time Management Plan
Time Management Plan: Sample Weekly Timetable
Use the table below to input the following:
· Common, non-school-related commitments. These may include
sleep—yes, scheduling your sleep is important—work
schedules, meals and meal preparation, community activities,
social commitments, and so on.
· Dedicated time for study and assignments in your courses.
Keep in mind that you should plan on 14–15 hours per week for
each course in which you are enrolled. Try to be specific about
how you will use your school time (e.g., “prepare discussion
post,” “complete module reading,” “plan for weekly
assignments,” “check in with instructor”). You may wish to use
the assignments for the next module in this example.
You can split up the hours below into smaller increments by
clicking in the table and adding a row above or below any of the
cells.Sample Time Schedule
TIME BLOCK
MONDAY

13. TUESDAY
WEDNESDAY
THURSDAY
FRIDAY
SATURDAY
SUNDAY
5:00–6:00 a.m.
6:00–7:00 a.m.
7:00–8:00 a.m.
8:00–9:00 a.m.

14. 9:00–10:00 a.m.
10:00–11:00 a.m.
11:00–12:00 p.m.
12:00–1:00 p.m.
1:00–2:00 p.m.

15. 2:00–3:00 p.m.
3:00–4:00 p.m.
4:00–5:00 p.m.
5:00–6:00 p.m.

16. 6:00–7:00 p.m.
7:00–8:00 p.m.
8:00–9:00 p.m.
9:00–10:00 p.m.
10:00–11:00 p.m.

17. 11:00–12:00 a.m.
12:00–1:00 a.m.
1:00–2:00 a.m.
2:00–3:00 a.m.

18. 3:00–4:00 a.m.
4:00–5:00 a.m.
Time Management Plan: Identify Black Holes
After completing the sample weekly schedule above, take a
moment to reflect on the possible “black holes” that may impact
your time schedule (e.g., unplanned appointments,
procrastination, Facebook or other social networking sites,
interruptions with children). As your textbook noted, ". . . most
people find that they're spending time on a lot of activities that
just don't matter very much" (Feldman, 2014, p. 36). In the
section below, identify one or two black holes and provide a
brief description (one to two paragraphs, using complete
sentences) on how the black hole may impact your schedule and
how you will reduce disruptions.
Black Holes Reflection:
Section II: Academic Mission Statement and GoalsRevision of

19. Mission Statement and Academic Goals
Below, include a revision of your academic mission statement
and short-term goals from Final Project I, which you submitted
in Module Five. Use your “how to use rubric feedback for
growth” skills, and make sure you are considering the feedback
you received from your instructor. Also be sure to clean up any
written errors in the submission. If you wish to refocus your
mission statement, you are encouraged to do so here.
Type your revised mission statement and academic goals in the
space below:
Section III: Social, Motivational, and Academic Support
StrategiesStrategy or Amenity Alignment and Importance
As you consider your mission statement, academic goals, and
time management plan, identify three specific strategies or
amenities (resources) you are going to utilize to help
accomplish your goals. Consult the “Additional Resources” and
“Academic Support” menu links in your course for assistance
identifying appropriate strategies or amenities.
For each strategy or resource, explore the following:
· Identify the strategy or amenity and how it aligns with your
mission statement, academic goals, time management plan, or
SmarterMeasure results.
· Why is this strategy or amenity important for your academic
success in an online environment? How will this help you
address your specific social, motivational, and/or academic
needs?
Name of Strategy or Amenity One:
How it aligns with your mission statement, academic goals, time
management plan, or SmarterMeasure results:
Why it is important to your academic success in an online
environment:

20. Name of Strategy or Amenity Two:
How it aligns with your mission statement, academic goals, time
management plan, or SmarterMeasure results:
Why it is important to your academic success in an online
environment:
Name of Strategy or Amenity Three:
How it aligns with your mission statement, academic goals, time
management plan, or SmarterMeasure results:
Why it is important to your academic success in an online
environment:
Section IV: Ownership of Online SuccessOwnership of Online
Success: Ownership and Measurement
Using the same strategies and amenities you identified above in
section III, answer the following:
A. You have identified three specific strategies or amenities
that will help you on your path to success. Now, think about
your personal ownership of theuse of the strategy or amenity
and its importance to your academic, social, and/or motivational
success or needs in an online environment. Why is it important
for you to take charge of these resources, and how will their
implementation help you achieve future online academic
success? (Consider this: Why might it be even more important
in an online environment to take personal ownership of these
strategies or amenities than it might be in a traditional
classroom?)
B. Now that you have identified your strategies and amenities
and connected their use to your personal goals and needs, how
will you measure your own success in planning to use these
strategies or amenities? For instance, if you commit to using the

21. SNHU Writing Center, a measurement of success might be
successfully setting up a writing appointment at the beginning
of your next term (or every term) to discuss support. How will
you identify if you are using the strategies and amenities
successfully?
Name of Strategy or Amenity One:
A. How will your ownership of this strategy or amenity support
your success in an online environment? Explain:
B. How will you measure your own success in using this
strategy? Explain:
Name of Strategy or Amenity Two:
A. How will your ownership of this strategy or amenity support
your success in an online environment? Explain:
B. How will you measure your own success in using this
strategy? Explain:
Name of Strategy or Amenity Three:
A. How will your ownership of this strategy or amenity support
your success in an online environment? Explain:
B. How will you measure your own success in using this
strategy? Explain: