APOLLO PRIYADARSHANAM INSTITUTE OF TECHNOLOGY

DEPARTMENT OF MECHANICAL ENGINEERING

CYCLE TEST II
SUBJECT CODE/NAME: MG6863/EE DATE:
YEAR/SEM: IV/VIII MAX.MARKS: 50

PART-A (5x2 =
10MARKS)
1. List out the preventive maintenance activities.
2. Name list the different types of maintenance?
3. What are the types of replacement problem?
4. Define present worth method.
5. Categorize the methods of revenue dominated cash flow

PART-B(ANY FOUR) (4x10 =

40MARKS)
6. Explain the features of Maintenance. How would you manage maintenance in any sector?
List the causes for replacement of assets in detail.
7. Explain What are all the various types of Maintenance? Evaluate their merits and
Demerits.
8. Explain the types of Replacement. Compare replacement and maintenance analysis.
9. A machine was purchased two years ago for Rs. 10,000. Its annual maintenance cost is
Rs.750. Its life is six years and its salvage value at the end of its life is Rs.1, 000. Now, a
company is offering a new machine at a cost of Rs. 10,000. Its life is four years and its
salvage value at the end of its life is Rs.4, 000. The annual maintenance cost of the new
machine is Rs. 500. The company which is supplying the new machine is willing to take
the old machine for Rs. 8,000 if it is replaced by the new machine. Assume an interest
rate of 12%, compounded annually, is it advisable to replace the old machine?
10. Alpha Finance Company is coming with an option of accepting Rs.10000 now paying a
sum of Rs.160000 after 20 years. Beta finance company is coming with a similar option
of accepting Rs.10000 now and paying a sum of Rs.300000 after25years.Compare and
selects the best alternative based on future worth method of comparison with 15%
interest rate compounded annually.
 APOLLO PRIYADARSHANAM INSTITUTE OF TECHNOLOGY
DEPARTMENT OF MECHANICAL ENGINEERING

CYCLE TEST II
SUBJECT CODE/NAME: MG6863/EE DATE:
YEAR/SEM: IV/VIII MAX.MARKS: 50

PART-A (5x2 =
10MARKS)
1. Discuss about the economic life of an asset
2. List the features of Planned Maintenance Cost.
3. What are the reasons for replacement?
4. Define Annual equivalent method.
5. State the cash flow method

PART-B(ANY FOUR) (4x10 =

40MARKS)
6. Two years ago, a machine was purchased at a cost of Rs.2, 00,000 to be useful for eight
years. Its salvage at the end of its life is Rs.25, 000. The annual maintenance cost is Rs. 1,
20,000. Now, a new machine to cater to the need of the present machine is available at
Rs.1, 50,000 to be useful for six years. Its annual maintenance cost is RS. 14,000. The
salvage value of the new machine is RS. 20,000. Using an interest rate of 12%, find
whether it is worth replacing the present machine with the new machine.
7. (i)Explain the types of Replacement.
(ii)Compare replacement and maintenance analysis.
8. (i) Explain the features of Maintenance.
(ii)List the causes for replacement of assets in detail.
9. A granite company is planning to buy a fully automated granite cutting machine. If it is
purchased under down payment, the cost of the machine is Rs. 16, 00,000. If it is
purchased under installment basis, then the company has to pay 25% of the cost at the
time of purchase and the remaining amount in 10 annual equal installments of Rs. 2,
00,000 each. What is the best alternative for the company using the present worth basis at
i=18%compounded annually
10. Explain how would you describe the cost dominated and revenue dominated cash flow
diagram?