ISEN 302 Exam 3

T/F: Future worth analysis is particularly useful for evaluating outcomes like retirement savings.

• True

• False

T/F: Future worth analysis is not useful for evaluating outcomes like retirement savings.

• True

• False

T/F: BCR is only used for qualitative assessments of a project’s viability.

• True

• False

T/F: BCR can be used for both monetary and qualitative assessments of a project.

• True

• False

T/F: The benefit-cost ratio measures how much value is gained for every dollar spent.

• True

• False

T/F: The benefit-cost ratio is independent of the minimum attractive rate of return (MARR).

• True

• False

For one alternative where neither input nor output is fixed, the decision criterion is...

• Maximize NPW

• Use EUAW analysis

• Ensure B/C > 1

• Minimize payback period

For one alternative where input is fixed, the decision criterion is...

• Maximize B/C

• Minimize B/C

• Highest B

• Lowest C

For one alternative where output is fixed, the decision criterion is...

• Maximize B/C

• Minimize B/C

• Highest B

• Lowest C

T/F: The payback period is the time required for a project’s profit and benefits to equal its cost.

• True

• False