ENEE300 Engineering Economics Assessment 2026 | University of Dubai

ENEE300 Assessment 

Course Learning Outcomes (CLO)

This Assessment Instrument assesses the following Course Learning Outcomes (CLO):

• CLO1 Apply economics analysis methods such as cost, RoR, payback, benefit-cost ratio, and break-even on engineering projects or problems.
• CLO4 Compute the depreciation of an asset to evaluate its present or future impact.

Questions

Q.1 (1.75 marks) Suppose you are presented with two options:

Option A: receiving $35,000 at the end of four years.
Option B: receiving Q dollars today.

What value of Q would make you indifferent to your choice between Q dollars today and the promise of $35,000 at the end of four years? Assuming that if you select Option B, you would invest the money in an account that pays 8% interest, given that you don't require the money right now. Additionally, it is guaranteed that the $35,000 will be paid without any risk. 

Q.2 (2.0 marks)Procrastination can have significant financial implications, especially when it comes to saving for retirement. Consider this scenario: Imagine you begin making $3,000annual contributions to your retirement fund starting at age 25 and earn an 7% return on investment. If you plan to retire by age 60, by the time you retire, you'll have accumulated a substantial sum F.

1) Calculate the accumulated amount F.
2)  Now, if you have the goal of saving the same amount by the time of retirement, how much would be the required annual contributions if you start saving:

a. At age 30 and retire at age 60? 
b. At age 35 and retire at age 60?
c. At age 40 and retire at age 60? 

Q.3 (2.5 marks)A paper manufacturing company has recently acquired a new machine with a useful life of six years. The operations team anticipates that maintenance costs for the machineduring the first year will be $2,000. With the machine ageing, maintenance costs are projected to increase by $300 each year for the rest of its life. Maintenance costs will be incurred at the end of every year. The company wants to establish a maintenance fund that will yield a 10%annual return. All future maintenance expenses will be sourced from this fund. What initial amount should the company deposit into the fund today? 

Q.4 (1.75 marks)Wilson Technology, a growing machine shop, wishes to set aside money now to invest over the next four years in automating its customer service department. The company can earn 8% on a lump sum deposited now, and it wishes to withdraw the money in the following increments: 

• Year 1: $20,000, to purchase a computer and database software designed for customer service use;
• Year 2: $3,000, to purchase additional hardware to accommodate anticipated growth in use of the system;
• Year 3: No expenses; and 
• Year 4: $5,000, to purchase software upgrades. 

How much money must be deposited now to cover the anticipated payments over the next 4years?