Part I: Multiple choice (2-pt each) - means compound interest rate on unpaid or unrecovered balances such that the final amount results in a zero balance a. Rate of return b. Interest rate c. Discount rate d. Benefit Cost ratio 2. For the following cash flow, compute Rate of Return. (Choose the closest answer) Year 0 1 2 3 4 Cash flow (S) -70 15 25 35 45 a. 18% b. 19% c. 20% d. 21% 1/7 GE 359: Test 2 3. All of the following cash flows should be identified as benefits, except: a. $200,000 annual income to local businesses because of tourism created by a water reservoir b. Expenditure of $20 million for construction of a highway c. Fewer highway accidents because of improved lighting d. Longer tire life because of smooth pavement 4. Consider two mutually exclusive alternatives: Alternative Initial Cost (S) 300 Uniform Annual Benefit (S) 100 Alternative B 200 50 Each alternative has a 5-year useful life and no salvage value. The minimum attractive rate of return is 10%. Which alternative is better? a. Alternative A b. Alternative B 5. Which of the following terms is NOT related to ethics? a. Profitability b. Responsibility c. Morality d. Honesty 6. Which of the following statements is NOT correct with regard to the engineering ethics? a. Engineers ethical behavior will enhance their reputation. b. Good ethical behavior usually leads to a good consequence. c. Professional ethics helps a professional choose what to do when faced with a problem at work. d. None of the above