This document contains a review of 10 questions related to engineering economy concepts. The questions cover topics like equivalent amounts of money over time, evaluation criteria, examples of cash flows and equity financing, compound and simple interest rates, time to double an investment amount, and weighted average cost of capital.
This document contains a review of 10 questions related to engineering economy concepts. The questions cover topics like equivalent amounts of money over time, evaluation criteria, examples of cash flows and equity financing, compound and simple interest rates, time to double an investment amount, and weighted average cost of capital.
This document contains a review of 10 questions related to engineering economy concepts. The questions cover topics like equivalent amounts of money over time, evaluation criteria, examples of cash flows and equity financing, compound and simple interest rates, time to double an investment amount, and weighted average cost of capital.
money at different points in time can be said to be equal to each other is known as: REVIEW • A. Evaluation criterion • B. Equivalence QUESTIONS • C. Cash flow • D. Intangible factors 2. The evaluation criterion that is usually used in an economic analysis is: REVIEW • A. Time to completion
QUESTIONS • B. Technical feasibility
• C. Sustainability • D. Financial units (dollars or other currency) 1-4
3. All of the following are examples of
each cash flows, except: REVIEW • A. Asset salvage value
QUESTIONS • B. Income taxes
• C. Operating cost of assets • D. First cost of asset 4. In most engineering economy studies, the best alternative is the one that: REVIEW • A. Will last the longest time
QUESTIONS • B. Is most politically correct
• C. Is easiest to implement • D. Has the lowest cost 5. All of the following are examples of equity financing, except: REVIEW • A. Mortgage
QUESTIONS • B. Money from savings
• C. Cash on hand • D. Retained earnings 6. At an interest rate of 10% per year, the equivalent amount of $10,000 one year ago is closest to: REVIEW • A. $8264 QUESTIONS • B.$9091 • C.$11,000 • D.$12,000 7. Assume that you and your best friend each have $1000 to invest. You invest your money in a fund that pays 10% per year compound interest. Your friend invests her money at a bank that pays 10% per year simple interest. At the end of 1 year, the difference in the total amount for REVIEW each of you is: QUESTIONS • A. You have $10 more than she does • B. You have $100 more than she does • C. You both have the same amount of money • C. She has $10 more than you do 8. The time it would take for a given sum of money to double at 4% per year simple interest is closest to: REVIEW • A. 30 years QUESTIONS • B. 25 years • C. 20 years • D. 10 years 9. To finance a new project costing $30 REVIEW million, a company borrowed $21 million at 16% per year interest and used retained earnings QUESTIONS valued at 12% per year for the remainder of the investment. The company’s weighted average cost of capital for the project was closest to: • A.12.5% B.13.6% C.14.8% D.15.6% 10. Amounts of $1000 1 year ago and $1345.60 1 year hence are equivalent at what compound interest per year? REVIEW • A.12.5% per year QUESTIONS • B.14.8% per year • C.17.2% per year • D. None of the above