ENGINEERING ECONOMIC AND ENTREPRENEURSHIP (GBB/GCB 3173)

SEPTEMBER 2015 SEMESTER ASSIGNMENT

TO BE SUBMITTED BY 5.00 PM, MONDAY 21 OCTOBER 2015
NAME:
PROGRAM:

1.

ID. NO.:

ABC Sdn. Bhd. has limited financial resources. It wants to bid on one of the
following project which each has a 10-year life span. Which project it
should bid on if the interest rate is 8% per year? Show your calculation and
your choice of the measure of worth.
Project A
A fixed-price contract with a large developer, resulting in a stable income
of RM250,000 per year in years 1 through 3, and RM200,000 per year for
the rest of the projects life span.
Project B
An income of RM300,000 per year, starting 3 years from now until the end
of the projects life span.
[14
marks]

2.

Determine the number of times interest would be compounded in 6 months

from the interest statements (a) 18% per year compounded monthly, (b)
1% per month, and (c) 2% per quarter
[6 marks]