(a) Kenneth is the project engineer of A&A Engineering company who is responsible for designing the Air Conditioning System of Sunny Hotel. As requested by clients, he has to prepare a presentation indicating the pros and cons of using different kinds of Air Conditioning System, such as Chilled Water System, VAV Box System and Split type system for their consideration. In the presentation, the efficiency of equipment, maintenance plan, annual electricity consumption, budget and cost estimation (in HK$), simple payback period, etc shall be analysed and compared among these different systems. Identify any THREE principles of Engineering Economics that happened in the above scenario. Justify your answers with supporting reasons.

(b) The following costs were incurred by AEE Engineering company in Feb 2018 in which 28 numbers of construction projects were completed. Classify the following items into the category of FIXED COST (FC) or VARIABLE COST (VC) appropriately. (5 marks)

	Cost item	Amount (HK$)
(i)	The hourly rate of workers	6,300
(ii)	Monthly maintenance on air conditioners	2,200
(iii)	Monthly salary of managing directors	80,000
(iv)	Monthly rent of office	9,800
(v)	Travelling expenses	2,650

(c) From the result obtained in part (b), determine the total cost equation for AEE Engineering company.

(d) A medical equipment manufacturer produced the 10th power wheelchair in 4 hours, while it took 3.2 hours to produce the 25h power wheelchair. Based on the above-mentioned information, derive the learning curve model for the product.

(e) Based on the result in part (d), determine how many power wheelchairs in total needs to be produced before the required production time for each wheelchair could go down to 1 hour.