APSC 221 FINAL EXAM QUESTIONS WITH CORRECT ANSWERS LATEST UPDATE 2025/2026

APSC 221 FINAL EXAM QUESTIONS WITH CORRECT ANSWERS LATEST UPDATE 2025/2026 The general Price-Demand relationship can be expressed as a linear function. (T/F) - Answers True When alternatives for accomplishing a specific task are being compared over one year or less (time value of money is ignored) they can be referred to as: - Answers Present economy studies One reason why perfect monopolies rarely occur in practice is because: - Answers Few products are so unique that substitutes cannot be used. A license fee is an example of an incremental cost. (T/F) - Answers False Working capital refers to the funds required for current assets that are needed for the start-up and support of operational activity (T/F) - Answers True 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? - Answers $1000 ________ are costs that are difficult to attribute or allocate to a specific output or work activity. - Answers Indirect costs Sunk costs should be included in an engineering economic analysis. (T/F) - Answers False CERs are excellent predictors of cost if they are correctly developed from good historical data. (T/F) - Answers True An index is a dimensionless number that indicates how a cost or price has changed with time with respect to a base year. (T/F) - Answers True ______ are used in the preliminary or conceptual design stage of a project. - Answers Semi-detailed or budget estimates __________ is the use of historical cost data and statistical techniques to predict future costs. - Answers Parametric cost estimating The power-sizing technique is sometime referred to as a linear model. (T/F) - Answers False The WBS is sometimes called a work element structure. (T/F) - Answers True The _______ defines a maximum time period and establishes a range of cost and revenue elements that need to be considered - Answers Life Cycle Material costs are an example of costs that are typically included in an engineering economy study.(T/F) - Answers True Which technique sums the product of several quantities or components and adds these to any components estimated directly? - Answers Factor Technique Effective interest rate is the conventional method of stating the annual interest rate. (T/F) - Answers False 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. (T/F) - Answers True Market equivalence is a consequence of the ability to _________ one cash flow for another at zero cost. - Answers Exchange Mathematical equivalence is a consequence of the mathematical relationship between _______. - Answers Time and Money The conventional approach for computing interest is the compound interest approach. (T/F) - Answers True On a cash flow diagram, the vertical arrows pointing upwards represent a negative cash flow. (T/F) - Answers False Decisional equivalence is a consequence of the __________ on the part of a decision maker among available choices. - Answers Indifference Nominal interest rate is found by multiplying the __________ by the number of compounding periods per year - Answers Interest rate per compounding period Discrete models are more common and more readily understood by persons of var