Engineering Economy Final Exam Part 1

Which of the following is NOT a fundamental principle of engineering economics?

• Time value of money

• Cost-benefit analysis

• Perfect competition

• Risk and uncertainty

What is the term used to describe the cost required to restore a piece of equipment to its original condition?

• Salvage value

• Maintenance cost

• Replacement cost

• Repair cost

The concept of "sunk costs" in engineering economics refers to:

• Costs that have already been incurred and cannot be recovered

• Costs that can be recovered if the project is abandoned

• Future costs that are not yet incurred

• Variable costs associated with production

What principle in engineering economics suggests that the cost of a decision should be weighed against the benefits before making a choice?

• Cost-benefit analysis

• Time value of money

• Opportunity cost

• Break-even analysis

The process of evaluating the costs and benefits of a design project to determine its economic viability is known as:

• Break-even analysis

• Cost estimation

• Economic evaluation

• Risk assessment

Tags

CCSS.HSS.MD.B.6

CCSS.HSS.MD.B.7

What does the term "cash flow" refer to in financial management?

• The total revenue generated by a company

• The total expenses incurred by a company

• The movement of money into and out of a business over a specific period

• The net profit earned by a company

What does the concept of "equivalence" in financial management entail?

• Comparing the financial performance of different companies in the same industry

• Evaluating the relative value of money over time

• Determining the equal value of cash flows occurring at different points in time

• Analyzing the efficiency of investment projects

When comparing cash flows occurring at different points in time, what factor must be considered?

• The risk associated with each cash flow

• The size of each cash flow

• The time value of money

• The liquidity position of the company

Tags

CCSS.8.EE.C.7B

In finance, what is the term for the interest rate used to calculate present or future values of cash flows?

• Nominal rate

• Real rate

• Discount rate

• Inflation rate

What does the term "annuity" refer to in finance?

• A one-time payment received or made at a specific point in time.

• A series of equal cash flows received or paid at regular intervals.

• A lump sum amount received or paid at the end of a project.

• A variable cash flow that changes over time.