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B.TECH
HSSM3204
Special Examination 2015

ENGINEERING ECONOMICS & COSTING

Time: 3 Hours
Max marks: 70
Answer Question No.1 which is compulsory and any five from the rest.
The figures in the right hand margin indicate marks.

Q.
1

Answer the following questions:

(2X10 )

a) What is Autonomous demand and derived Demand?


b) What are the factors affecting the magnitude of price elasticity of Demand?
c) The price of a commodity was Rs.20/-and its quantity demanded was 500 units. If prices
increases by 25% and quantity demanded decreases by 50%, find the price elasticity of
demand?
d) What is snob effect and Veblen effect?
e) What is sunk cost and marginal costing?
f) Distinguish between EPSSFA & EPSCRF .Explain with help of diagram.
g) Difference between ERR & MARR
h) What do you mean by overhead cost & classify it.
i) A person invests a sum of Rs.60, 000 in a bank at the rate of 18% compounded monthly for 15
years. Calculate the maturity value of his account and effective rate of interest?
j) What is cost sheet? What are its utilities?

2. The demand equation of Mr. Advani is: Q=50-10P+0.4Y, Where Q, P & Y are quantity, price &
income respectively. Assume that P=4 & Y= 100 (2+3+5 Marks)
i)

Interpret the Equation

ii)

Find the price & income elasticity at the given price & Income levels.

iii)

Why does a demand curve slope downward? What is its exception?

3. What is Production function? Explain the law of variable proportion. (10 Marks)
4. What is elasticity of demand? Distinguish between income elasticity & cross elasticity. (10
marks)
5. a) What do you understand by Uniform gradient series factor? Explain it through Example? (5
+5 Marks)
b) Alpha Finance Company is coming with an option of accepting Rs. 10,000 now & paying a sum of
Rs. 1, 60,000 after 20 years. Beta Finance company is now coming with similar options of accepting
Rs. 10,000 now & paying a sum of Rs. 30,000 after 25 years. Compare and select the best alternatives
based on the FW method of comparison with discount rate of 15%, compound annually.
6. (i) A company has recently purchased an overhead travelling crane for Rs. 25, 00,000.its expected
life is 7 years & residual value is Rs. 1, 00,000. Using FIM of depreciation, find depreciation & the
BV at the end of 4th year after the crane is purchased. (5 marks)
ii) The cash flows associated with OPEC country Arroyo improvement project are as follows: Initial
cost: Rs.650, 000; life 20 Years; Maintenance cost: 150,000 per year; benefits Rs.600, 000 per year;
disbenifits: Rs.190, 000 per year; Determine the conventional B/C ratio at an annual rate of 6% per
year. (5 marks)
7. What is B.E.P analysis? Explain the different concepts a) Break Even Point) MOS c) Profit Volume
Ratio d) Angle of incidence through graphically. (10 Marks)
8. Write short notes any two. (5X2 Marks)
a) Perfect competition b) Elasticity of Supply c) Distinguish between SLM & WDVM d) Money
market & Capital Market