On December 19, 2016, about 1400 eastern standard time, a Cessna 150M, N150EC, was substantially damaged during a forced landing following an in-flight smoke/fire event while maneuvering near Palm Bay, Florida. The flight instructor and student pilot received minor injuries. Visual meteorological conditions prevailed, and no flight plan was filed for the instructional flight, which was conducted under the provisions of Title14 Code of Federal Regulations Part 91. The airplane departed Melbourne International Airport (MLB), Melbourne, Florida, about 1300.Both the instructor and the student provided written statements, and their descriptions of the events were consistent throughout. During recovery from a simulated engine failure, both pilots first smelled and then observed smoke in the cockpit. The instructor took the flight controls, selected a forced landing site, and maneuvered the airplane for landing. Upon touchdown, the nose landing gear settled into low brush and soft terrain, where the airplane stopped, nosed-over, and came to rest inverted. The instructor held a commercial pilot certificate with ratings for airplane single engine land, multiengine land, and instrument airplane. He also held a flight instructor certificate with ratings for airplane single engine and instrument airplane. His Federal Aviation Administration (FAA) first-class medical certificate was issued on July 25, 2013. The instructor reported 309 total hours of flight experience, of which 3 hours were in the accident airplane make and model. The student pilot was issued a student pilot certificate and an FAA third class medical certificate on May 19, 2014. She reported 75 total hours of flight experience, of which 3 hours were in the accident airplane make and model. The two-seat, single-engine, high-wing, fixed-gear airplane was manufactured in 1976, and equipped with a Continental O-200-A series, 100-horsepower reciprocating engine. According to the airplane's maintenance records, the most recent annual inspection was completed on October 31, 2016, at 5,139 total aircraft hours. At 1615, the weather reported at MLB; located 18 miles south of the accident site, included clear skies and wind from 090 degrees at 5 knots. The temperature was 27 degrees C, the dew point was 23 degrees C, and the altimeter setting was 30.27 inches of mercury. An FAA inspector examined the wreckage at the site, and all major components were accounted for at the scene. Examination of the engine compartment revealed wires connected to the battery solenoid exhibited thermal damage. When the damaged wires were moved, the navigational gyros energized, the lights illuminated, and the flaps deployed. The examination of the airplane was then suspended. Detailed examination by the NTSB revealed the wire (part number: PA5, 4 gauge) that connected the battery solenoid to the starter solenoid displayed chafing and thermal damage to the insulation along a 3-inch section of its length. The wire was placed in its approximate normally-installed location, and the burned area corresponded to the round shape of the right rear muffler. Multiple 18-gauge wires in the area also exhibited melted insulation. The back plate of the right muffler was no longer attached to the muffler and exhibited evidence of corrosion. It could not be determined if the back plate of the muffler had separated due to corrosion or impact forces.