ENGINEERING ECONOMY
COMPREHENSIVE EXAM SCRIPT VERIFIED
QUESTIONS AND SOLUTIONS GRADED
APLUS
●● Why is engineering economy important to engineers?
Answer: It helps engineers make economic decisions, select from
multiple alternatives, and apply time value of money, economic
equivalence, and cost estimation.
●● What are the steps in decision making?
Answer: 1. Understand the problem 2. Collect relevant information 3.
Define the set of feasible alternatives 4. Identify criteria for decision
making 5. Evaluate alternatives and apply sensitivity analysis 6. Select
the best alternative 7. Implement and monitor results.
●● What is the first step in an engineering economic study?
Answer: Problem Description/Available Data/Alternatives for Cash
Flows and Other Estimates.
●● What is the measure of worth criterion?
Answer: It is used to analyze and determine the best alternative in an
engineering economic study.
, ●● What is professional ethics in engineering?
Answer: Professional ethics are formal standards or codes that guide a
person in work activities and decision making.
●● What is the difference between universal morals and individual
morals?
Answer: Universal morals are fundamental beliefs shared by society,
while individual morals are personal beliefs that vary from person to
person.
●● What does interest represent in engineering economy?
Answer: Interest is the manifestation of the time value of money,
representing the difference between an ending amount and the original
amount.
●● How is interest calculated?
Answer: Interest = End Amount - Original Amount.
●● What is the formula for calculating interest rate?
Answer: Interest Rate = (Interest / Original Amount) × 100.
●● In the sample problem, what was the interest paid on a loan of
₱10,000 that totaled ₱10,700 after one year?
COMPREHENSIVE EXAM SCRIPT VERIFIED
QUESTIONS AND SOLUTIONS GRADED
APLUS
●● Why is engineering economy important to engineers?
Answer: It helps engineers make economic decisions, select from
multiple alternatives, and apply time value of money, economic
equivalence, and cost estimation.
●● What are the steps in decision making?
Answer: 1. Understand the problem 2. Collect relevant information 3.
Define the set of feasible alternatives 4. Identify criteria for decision
making 5. Evaluate alternatives and apply sensitivity analysis 6. Select
the best alternative 7. Implement and monitor results.
●● What is the first step in an engineering economic study?
Answer: Problem Description/Available Data/Alternatives for Cash
Flows and Other Estimates.
●● What is the measure of worth criterion?
Answer: It is used to analyze and determine the best alternative in an
engineering economic study.
, ●● What is professional ethics in engineering?
Answer: Professional ethics are formal standards or codes that guide a
person in work activities and decision making.
●● What is the difference between universal morals and individual
morals?
Answer: Universal morals are fundamental beliefs shared by society,
while individual morals are personal beliefs that vary from person to
person.
●● What does interest represent in engineering economy?
Answer: Interest is the manifestation of the time value of money,
representing the difference between an ending amount and the original
amount.
●● How is interest calculated?
Answer: Interest = End Amount - Original Amount.
●● What is the formula for calculating interest rate?
Answer: Interest Rate = (Interest / Original Amount) × 100.
●● In the sample problem, what was the interest paid on a loan of
₱10,000 that totaled ₱10,700 after one year?
