CONTEMPORARY ENGINEERING ECONOMICS
FINAL PAPER 2026 SOLVED QUESTIONS WITH
FULL SOLUTION ALREADY PASSED
◉ WHICH OF THE FOLLOWING IS THE BEST DESCRIPTION OF THE
UNDEPRECIATED CAPITAL COST (UCC):
A. UCC is equal to the book value of a capital asset for tax purposes
B. UCC is the difference between a capital asset's book value and the
capital cost allowance
C. UCC is equal to the price of a capital asset divided by the capital
cost tax factor
D. UCC is equal to the price of a capital asset multiplied by the capital
cost tax factor
E. UCC is the difference between the price of a capital asset and its
book value.
Answer: UCC is the difference between the price of a capital asset
and its book value
◉ MONTE CARLO METHOD IS USED TO
A. Compare two mutually exclusive projects
B. Simulate the probability distribution function of a project's
performance measure
C. Simulate affects of inflation
,D. Set up a decision tree
E. Derive priority weights for various alternatives.
Answer: Simulate the probability distribution function of a project's
performance measure
◉ WHEN THERE IS A CHANGE IN RELATIVE PRICES THEN
A. It is necessary to incorporate this change into MARR and use
nominal MARR
B. It is necessary to ignore this change and use real MARR
C. It is necessary to directly incorporate this change into cash flows
D. It is necessary to adjust CPI accordingly
E. It is necessary to use GDP deflator as a measure of inflation.
Answer: It is necessary to directly incorporate this change into cash
flows
◉ THE GREATEST DRAWBACK OF SENSITIVITY GRAPHS IS
A. They are valid only over the range of parameter values in the
graph
B. They show changes in key parameter values in monetary terms
C. They do not consider the possible interaction between two or
more parameters
D. They are based on subjective probabilities only
E. They are based on objective probabilities only.
,Answer: They do not consider the possible interaction between two
or more parameters
◉ SUPPOSE THAT YOU ARE ASKED TO EVALUATE EFFICIENCY OF A
GOVERNMENT FINANCED PROJECT OF A NEW RURAL ROAD.
WHICH OF THE FOLLOWING TECHNIQUES WILL YOU CHOOSE FOR
THIS ANALYSIS?
A. Analytic Hierarchy Process
B. Financial cash flow analysis
C. Benefit-Cost Analysis
D. Monte Carlo Method
E. Scenario Analysis.
Answer: Benefit-Cost Analysis
◉ AS A RULE, POTENTIAL OUTCOMES OF A RANDOM VARIABLE IN
A DECISION TREE ARE REPRESENTED BY:
A. Terminal positions
B. Decision nodes
C. Terminal positions with branches
D. Chance nodes
E. Branches.
Answer: Branches
, ◉ A PROBABILITY OF PICKING A PARTICULAR CARD FROM A DECK
IS AN EXAMPLE OF
A. A classical probability
B. A frequency probability
C. A subjective probability
D. An objective probability
E. An axiomatic probability.
Answer: A classical probability
◉ IN GENERAL, TAXES REDUCE A COMPANY'S PROFIT AND ARE
REGARDED AS COSTS. HOWEVER, SOMETIMES A WISELY
DESIGNED TAX SYSTEM CAN PROVIDE TAX SAVINGS FOR THE
COMPANY. IN CANADA, TAX SAVINGS WORK THROUGH THE
FOLLOWING COSTS.
A. Operating costs
B. Maintenance costs
C. Depreciation costs
D. Installation costs
E. Energy costs.
Answer: Depreciation costs
◉ TO ACCOUNT FOR CORPORATE TAX EFFECTS ON SALVAGE OR
SCRAP VALUE IN CANADA IT IS NECESSARY TO
FINAL PAPER 2026 SOLVED QUESTIONS WITH
FULL SOLUTION ALREADY PASSED
◉ WHICH OF THE FOLLOWING IS THE BEST DESCRIPTION OF THE
UNDEPRECIATED CAPITAL COST (UCC):
A. UCC is equal to the book value of a capital asset for tax purposes
B. UCC is the difference between a capital asset's book value and the
capital cost allowance
C. UCC is equal to the price of a capital asset divided by the capital
cost tax factor
D. UCC is equal to the price of a capital asset multiplied by the capital
cost tax factor
E. UCC is the difference between the price of a capital asset and its
book value.
Answer: UCC is the difference between the price of a capital asset
and its book value
◉ MONTE CARLO METHOD IS USED TO
A. Compare two mutually exclusive projects
B. Simulate the probability distribution function of a project's
performance measure
C. Simulate affects of inflation
,D. Set up a decision tree
E. Derive priority weights for various alternatives.
Answer: Simulate the probability distribution function of a project's
performance measure
◉ WHEN THERE IS A CHANGE IN RELATIVE PRICES THEN
A. It is necessary to incorporate this change into MARR and use
nominal MARR
B. It is necessary to ignore this change and use real MARR
C. It is necessary to directly incorporate this change into cash flows
D. It is necessary to adjust CPI accordingly
E. It is necessary to use GDP deflator as a measure of inflation.
Answer: It is necessary to directly incorporate this change into cash
flows
◉ THE GREATEST DRAWBACK OF SENSITIVITY GRAPHS IS
A. They are valid only over the range of parameter values in the
graph
B. They show changes in key parameter values in monetary terms
C. They do not consider the possible interaction between two or
more parameters
D. They are based on subjective probabilities only
E. They are based on objective probabilities only.
,Answer: They do not consider the possible interaction between two
or more parameters
◉ SUPPOSE THAT YOU ARE ASKED TO EVALUATE EFFICIENCY OF A
GOVERNMENT FINANCED PROJECT OF A NEW RURAL ROAD.
WHICH OF THE FOLLOWING TECHNIQUES WILL YOU CHOOSE FOR
THIS ANALYSIS?
A. Analytic Hierarchy Process
B. Financial cash flow analysis
C. Benefit-Cost Analysis
D. Monte Carlo Method
E. Scenario Analysis.
Answer: Benefit-Cost Analysis
◉ AS A RULE, POTENTIAL OUTCOMES OF A RANDOM VARIABLE IN
A DECISION TREE ARE REPRESENTED BY:
A. Terminal positions
B. Decision nodes
C. Terminal positions with branches
D. Chance nodes
E. Branches.
Answer: Branches
, ◉ A PROBABILITY OF PICKING A PARTICULAR CARD FROM A DECK
IS AN EXAMPLE OF
A. A classical probability
B. A frequency probability
C. A subjective probability
D. An objective probability
E. An axiomatic probability.
Answer: A classical probability
◉ IN GENERAL, TAXES REDUCE A COMPANY'S PROFIT AND ARE
REGARDED AS COSTS. HOWEVER, SOMETIMES A WISELY
DESIGNED TAX SYSTEM CAN PROVIDE TAX SAVINGS FOR THE
COMPANY. IN CANADA, TAX SAVINGS WORK THROUGH THE
FOLLOWING COSTS.
A. Operating costs
B. Maintenance costs
C. Depreciation costs
D. Installation costs
E. Energy costs.
Answer: Depreciation costs
◉ TO ACCOUNT FOR CORPORATE TAX EFFECTS ON SALVAGE OR
SCRAP VALUE IN CANADA IT IS NECESSARY TO
