APSC 221 (Ozz) EXAM QUESTIONS AND ANSWERS
100% CORRECT
Sunk costs should be included in an engineering economic analysis. - ANSWER False
________ are costs that are difficult to attribute or allocate to a specific output or work
activity. - ANSWER Indirect costs
Your company must decide what to do with an old pump it purchased 12 years ago. The
pump hasn't been used for two years and is now in storage. You have collected the
following data;
Purchase price 12 years ago = $7,000
Storage costs to date = $500
Current price for a new pump = $12,000
Amount offered for the pump two years ago = $1,250
Best estimate of what the pump would bring today = $1,000
What is the opportunity cost associated with this pump? - ANSWER 1000
The general Price-Demand relationship can be expressed as a linear function. -
ANSWER True
A license fee is an example of an incremental cost. - ANSWER False
, One reason why perfect monopolies rarely occur in practice is because: - ANSWER Few
products are so unique that substitutes cannot be used.
An index is a dimensionless number that indicates how a cost or price has changed with
time with respect to a base year. - ANSWER True
Material costs are an example of costs that are typically included in an engineering
economy study. - ANSWER True
What does Cn stand for in the above equation?
C_n = C_k (I_n / I_k) - ANSWER Estimated cost of price of the item in year being
analyzed.
______ are used in the preliminary or conceptual design stage of a project. - ANSWER
Semi-detailed or budget estimates
The conventional approach for computing interest is the compound interest approach. -
ANSWER True
Compound interest takes the interest accumulated in one interest period and adds it to
the principle amount used to calculate interest in the next period. - ANSWER True
Decisional equivalence is a consequence of the __________ on the part of a decision
maker among available choices. - ANSWER Indifference
The base unit of time over which an interest rate is calculated is called the _______. -
ANSWER Interest period
The future worth of an infinitely long uniform series of cash flows is called the
100% CORRECT
Sunk costs should be included in an engineering economic analysis. - ANSWER False
________ are costs that are difficult to attribute or allocate to a specific output or work
activity. - ANSWER Indirect costs
Your company must decide what to do with an old pump it purchased 12 years ago. The
pump hasn't been used for two years and is now in storage. You have collected the
following data;
Purchase price 12 years ago = $7,000
Storage costs to date = $500
Current price for a new pump = $12,000
Amount offered for the pump two years ago = $1,250
Best estimate of what the pump would bring today = $1,000
What is the opportunity cost associated with this pump? - ANSWER 1000
The general Price-Demand relationship can be expressed as a linear function. -
ANSWER True
A license fee is an example of an incremental cost. - ANSWER False
, One reason why perfect monopolies rarely occur in practice is because: - ANSWER Few
products are so unique that substitutes cannot be used.
An index is a dimensionless number that indicates how a cost or price has changed with
time with respect to a base year. - ANSWER True
Material costs are an example of costs that are typically included in an engineering
economy study. - ANSWER True
What does Cn stand for in the above equation?
C_n = C_k (I_n / I_k) - ANSWER Estimated cost of price of the item in year being
analyzed.
______ are used in the preliminary or conceptual design stage of a project. - ANSWER
Semi-detailed or budget estimates
The conventional approach for computing interest is the compound interest approach. -
ANSWER True
Compound interest takes the interest accumulated in one interest period and adds it to
the principle amount used to calculate interest in the next period. - ANSWER True
Decisional equivalence is a consequence of the __________ on the part of a decision
maker among available choices. - ANSWER Indifference
The base unit of time over which an interest rate is calculated is called the _______. -
ANSWER Interest period
The future worth of an infinitely long uniform series of cash flows is called the
