Engineering Economics Pre-Spring Break

Given the following Internal Rate of Returns, which alternative is the most profitable?

• IRR = 12%

• IRR = 10%

• IRR = 15%

• Cannot compare IRR's

• when i = f

• when i ≠ f

• when i < f

• when i > f

Think about the relationship between a desired future amount (savings goal) and its equivalent uniform deposit series when interest is being earned.  Which of the following statements is TRUE when N is the number of cash flows in the uniform series?

• F/N = A

• F/N > A

• F/N < A

MARR is an acronym. What does it mean?

• Minimum Auditing Referral Round

• Maximum Annual Reasonable Return

• Minimal Attractive Rate of Return

What does IRR represent?

• The interest percentage where the equivalent worth of the scenario = 0

• The interest percentage that is larger than or equal to the MARR

• The interest percentage that is less than or equal to the MARR

• The interest percentage that give you the maximum profitable outcome

Which are the Equivalent Worth types that we study in class?

• Yearly, Monthly, and Daily Worth

• Future, Present, and Annual Worth

• Future, Present, and Absolute Worth

• Today, Tomorrow, and Yesterday Worth

How do you find "N" for an annual series?

• Count the number of cash flows

• Subtract the year of the last cash flow by the year of the first cash flow and add one

• You can't

• Subtract the last year by the first year

Given MARR = 10%, which of the following alternatives are profitable given their IRR?

• Jeremy Industries: 8%

• Sean LLC: 5%

• Will Incorporated: 10%

• Dr. Wicks Candles: 30%