Multiple Choice Questions 1. The concept that different sums of money at different points in time can
Question:
Multiple Choice Questions
1. The concept that different sums of money at different points in time can be said to be equal to each other is known as:
(a) Evaluation criterion
(b) Equivalence
(c) Cash flow
(d) Intangible factors
2. The evaluation criterion that is usually used in an economic analysis is:
(a) Time to completion
(b) Technical feasibility
(c) Sustainability
(d) Financial units (dollars or other currency)
3. All of the following are examples of cash outflows, except:
(a) Asset salvage value
(b) Income taxes
(c) Operating cost of asset
(d) First cost of asset
4. In most engineering economy studies, the best alternative is the one that:
(a) Will last the longest time
(b) Is most politically correct
(c) Is easiest to implement
(d) Has the lowest cost
5. At an interest rate of 10% per year, the equivalent amount of $10,000 one year ago is closest to:
(a) $8264
(b) $9091
(c) $11,000
(d) $12,000
6. 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 each of you is:
(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
(d) She has $10 more than you do
7. All of the following are examples of equity financing, except:
(a) Mortgage
(b) Money from savings
(c) Cash on hand
(d) Retained earnings
Salvage ValueSalvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...
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