Information systems and engineering economics MCQs | Page - 26

Q. 251) ____________ are incurred by the operation of physical plants or equipment needed to provide service

Q. 252) ____________ is a loss in the purchasing power of money over time.

Q. 253) A newly constructed water treatment facility cost $2 million. It is estimated that the facility will need renovating every 30 years at a cost of $1 million. Annual repairs and maintenance are estimated to be $100,000 per year. At an interest rate of 6%, determine the capitalized cost of the facility.

Q. 254) Gene Research, Inc. just finished a 4-year R&D and clinical trials successfully and expects a quick approval from the Food and Drug Administration. If the company markets the product on their own, it requires $30 million immediately (n ⇓ = ⇓ 0) to build a new manufacturing facility, and it is expected to have a 10 year product life. The R&D expenditure in the previous years and the anticipated revenues that the company can generate over the next 10 years is summarized as follows:Merck, a large drug company is interested in purchasing the R&D project and the right to commercialize the product from Gene Research, Inc., immediately (n = 0). What would be a starting negotiating price for the project from Merck? Assume that Gene’s MARR ⇓ = 20%.

Q. 255) A manufacturing company is considering the purchase of a new CNC lathe, which will cost $60,000 and has an annual maintenance cost of $8,000. A few parts in the lathe need to be replaced once every 5 years to enable smooth running of the lathe. This would cost an additional $20,000 (once every 5 years). Assuming that the lathe would last 15 years under these conditions, what is the total equivalent cost (present value) of this investment at an interest rate of 12%? (Assume that there will be no appreciable salvage value at the end of 15 years.)

Q. 256) An asset with a first cost of $100,000 is depreciated over 5-year period. It is expected to have a $10,000 salvage value at the end of 5 years. Using the straight-line method, what is the book value at the end of year 2?

Q. 257) The rate of tax that is leivable on STCG
arising from transfer of Equity shares of a
Company or units of an Equity oriented fund is

Q. 258) For an employee in receipt of hostel expenditure allowance for his three children, the maximum annual allowance exempt under section 10(14) is ....

Q. 259) For an industrial undertaking fulfilling the conditions, additional depreciation in respect of a machinery costing Rs.10 lakh acquired and installed on October 3, 2005 is

Q. 260) A new business was set up on15-11-2008 and it commenced its business from 1-12-2008. The first previous year in this case shall be: