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Exercises for ENES 100 from Montgomery College., Exercises of Engineering

Exercises for ENES 100 from Montgomery College.

Typology: Exercises

2023/2024

Uploaded on 10/28/2024

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Class Activity: Engineering Economics - Cost-Benefit Analysis
ENES 100 Fall 2024
Objective
Learn to perform a cost-benefit analysis (CBA) for an engineering project, understand how
to evaluate financial viability, and make informed decisions.
Project Title: Construction of a New Bridge
Project Description:
A new bridge is proposed to connect two towns, reducing travel time and improving
transportation eEiciency. The project aims to enhance local economic activity by
facilitating better access to markets.
Data for Cost-Benefit Analysis
1. Initial Costs:
Construction Costs: $2,500,000
Land Acquisition: $500,000
Environmental Impact Assessment: $100,000
Total Initial Costs: $3,100,000
2. Annual Operating Costs:
Maintenance: $50,000
Insurance: $20,000
Total Annual Operating Costs: $70,000
3. Benefits:
Reduced Travel Time Savings: $200,000 per year (based on reduced fuel
costs and time savings for commuters)
Economic Growth: $150,000 per year (increased business activity)
Total Annual Benefits: $350,000
4. Project Lifespan: 20 years
5. Discount Rate: 5%
Activity Outline
1. Introduction: Write a paragraph with the following information
Explain the importance of engineering economics and cost-benefit analysis
in project decision-making.
How will engineering economics help you determine if building the bridge is a
good decision?
2. Cost-Benefit Analysis Calculation
Perform the following calculations using Excel:
Net Present Value (NPV) of benefits and costs.
Tot a l C os ts over the lifespan of the project.
Total Benefits over the lifespan of the project.
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Class Activity: Engineering Economics - Cost-Benefit Analysis ENES 100 Fall 202 4 Objective Learn to perform a cost-benefit analysis (CBA) for an engineering project, understand how to evaluate financial viability, and make informed decisions. Project Title : Construction of a New Bridge Project Description : A new bridge is proposed to connect two towns, reducing travel time and improving transportation eEiciency. The project aims to enhance local economic activity by facilitating better access to markets. Data for Cost-Benefit Analysis

  1. Initial Costs:
    • Construction Costs: $2,500,
    • Land Acquisition: $500,
    • Environmental Impact Assessment: $100,
    • Total Initial Costs: $3,100,
  2. Annual Operating Costs:
    • Maintenance: $50,
    • Insurance: $20,
    • Total Annual Operating Costs: $70,
  3. Benefits:
    • Reduced Travel Time Savings: $200,000 per year (based on reduced fuel costs and time savings for commuters)
    • Economic Growth: $150,000 per year (increased business activity)
    • Total Annual Benefits: $350,
  4. Project Lifespan: 20 years
  5. Discount Rate: 5% Activity Outline
  6. Introduction: Write a paragraph with the following information
  • Explain the importance of engineering economics and cost-benefit analysis in project decision-making.
  • How will engineering economics help you determine if building the bridge is a good decision?
  1. Cost-Benefit Analysis Calculation
  • Perform the following calculations using Excel:
  • Net Present Value (NPV) of benefits and costs.
  • Total Costs over the lifespan of the project.
  • Total Benefits over the lifespan of the project.
  • Benefit-Cost Ratio (BCR) : Total Benefits / Total Costs. Formulas to Use : ∑ (^) ⬚This symbol means summation. For example summation of all the benefits of building the bridge.
  1. Conclusion: Write a paragraph with the following information
  • The calculated NPV, total costs, total benefits, and BCR.
  • Conclusions about the project's financial viability based on their analysis.
  • Highlight the importance of cost-benefit analysis in engineering projects.
  • Discuss how this analysis can influence project decisions. Deliverables: Submit a word document with your analysis and an excel file where you perform your calculations. Due Date: Sept 17th^ at 9:40 pm.