Identify at least FIVE of the engineering economic analysis procedure and relate each to the engineering design process.

$(15)$

$]=[15$ marks

QUESTION $2$

Sabi Gold Mine desires to construct a gold leaching tank with a capacity of $1500m^3$ to increase the leaching. The company has built a $600m^3$ tank $15$ years ago when the approximate cost index was $210$ and the cost of constructing the tank was R$700000.$ The current cost index is $800$ and the cost$-$capacity factor for the gold leaching tank is $0\mathrm{.}5.$ Estimate the cost of constructing a $1000m^3$ gold leaching tank.

$]=[5$ Marks

QUESTION $3$

$3\mathrm{.}1$ Gore intends to buy his dream house in a low$-$density suburb in the next $10$ years, which will cost R$3$ million rands. He is going to put aside R$115000$ each year for this project. Use the spreadsheet to calculate the interest rate at which he must invest the money in order to buy the house after $10$ years.

$3\mathrm{.}2$ If the same house in $3\mathrm{.}1$ has a present market value of R$2$ million, calculate the average annual rate of increase in the price of this property over the given period.

$3\mathrm{.}3$ If Gore had R$700000$ when he got the idea of saving for the R$3$ million house. How many years would it take for him to raise the required amount to purchase the house if the applied interest rate is $11\%.$

$3\mathrm{.}4$ Diane bought a bank$-$financed car and decided to quickly repay the loan to reduce the loan interest. Over and above the monthly instalment of R$9800,$ she paid R$110000$ at the end of the first month, R$70000$ at the end of the second month and $12$ additional payments of R$6000$ at the end of each month thereafter. If the interest rate is $1\%$ per month, illustrate a cash flow diagram for this payment and calculate the present value of ND$\text{'}$s proposed payment schedule during that period.

$]=[20$ Marks

QUESTION $4$

$4\mathrm{.}1$ If you are $20$ years of age and save R$20$ each day for the rest of your life. At the age of $60$ years, how much will that investment worth if the annual interest rate is $10\%.$

$4\mathrm{.}2$ NM borrow R$270000\mathrm{.}00$ from his credit card facility to build a house. The interest rate on the loan is $0\mathrm{.}5\%$ per month and he will make a total of $36$ monthly payments. Calculate his monthly payment.

$]=[10$ Marks

QUESTION $5$

Gabriel Bricks wants to expand its brick manufacturing company by adding another project. Therefore, it has four projects to evaluate and choose one that is suitable. The plant for each product can produce $230000$ units a year with different percentages of waste and has no market value at the end of its useful life of $25$ years. The capital invested is expected to earn $9\%$ per year and the waste is assumed not to influence the annual expenses. Evaluate the projects through calculations and choose the project that maximizes all three equivalent worth measures of overall profitability. Also, perform the preference ranking. The projects are presented in the following Table:

$\backslash$table$[[,$Floor Tiles,Roof Tiles,Windowsills,Clay vases$],[$Capital Investment,R$740000,$R$884000,$R$630000,$R$408000],[$Total annual expenses,R$460000,$R$430000,$R$380000,$R$400000],[$Selling price,R$10/$unit$,$R$25/$unit$,$R$23/$unit$,$R$50/$unit$],[$Waste per year,$3\%,3\%,0\mathrm{.}5\%,0\mathrm{.}3\%$