ENGINEERING ECONOMY CERTIFICATION
EVALUATION EXAMS SET FULL QUESTIONS
AND COMPLETE SOLUTION
●● What are the two main branches of economics discussed in this
course?
Answer: Macro Economics and Micro Economics.
●● What is the importance of the Time Value of Money in Engineering
Economics?
Answer: It emphasizes that money available now is worth more than the
same amount in the future due to its potential earning capacity.
●● What is the role of the Bank of Canada in Engineering Economics?
Answer: It influences economic conditions through monetary policy,
affecting interest rates and cash flow.
●● What is the significance of the Payback Period in economic analysis?
Answer: It measures the time required to recover the cost of an
investment.
●● What are the components of costs that need to be considered in
project analysis?
,Answer: Installation, operations and maintenance, fuel, personnel, land,
and final disposal.
●● What is the importance of understanding costs in engineering
decision-making?
Answer: It allows for informed decisions regarding investments and
project feasibility.
●● What is the role of uncertainty and risk in engineering economics?
Answer: It involves assessing potential financial outcomes and making
decisions under uncertainty.
●● What is the significance of financial ratios in engineering
economics?
Answer: They provide insights into the financial health and performance
of a project or company.
●● What is the importance of public decision-making in engineering
economics?
Answer: It involves evaluating the economic impact of projects on
society and ensuring efficient resource allocation.
●● What is the purpose of using decision trees in engineering
economics?
, Answer: To visualize and analyze the potential outcomes of different
decision paths.
●● What is the relationship between inflation and price change in
engineering economics?
Answer: Inflation affects the purchasing power of money and must be
considered in cost estimations.
●● What is the significance of replacement analysis in engineering
economics?
Answer: It helps determine the optimal time to replace equipment or
assets based on cost and efficiency.
●● What is the role of compounding and series in financial analysis?
Answer: They are used to calculate future values of investments and
cash flows over time.
●● What is engineering economy?
Answer: A collection of techniques that simplify comparisons of
alternatives on an economic basis.
●● What does engineering economy NOT do?
Answer: It does not determine what the alternatives are; it begins after
alternatives have been identified.
EVALUATION EXAMS SET FULL QUESTIONS
AND COMPLETE SOLUTION
●● What are the two main branches of economics discussed in this
course?
Answer: Macro Economics and Micro Economics.
●● What is the importance of the Time Value of Money in Engineering
Economics?
Answer: It emphasizes that money available now is worth more than the
same amount in the future due to its potential earning capacity.
●● What is the role of the Bank of Canada in Engineering Economics?
Answer: It influences economic conditions through monetary policy,
affecting interest rates and cash flow.
●● What is the significance of the Payback Period in economic analysis?
Answer: It measures the time required to recover the cost of an
investment.
●● What are the components of costs that need to be considered in
project analysis?
,Answer: Installation, operations and maintenance, fuel, personnel, land,
and final disposal.
●● What is the importance of understanding costs in engineering
decision-making?
Answer: It allows for informed decisions regarding investments and
project feasibility.
●● What is the role of uncertainty and risk in engineering economics?
Answer: It involves assessing potential financial outcomes and making
decisions under uncertainty.
●● What is the significance of financial ratios in engineering
economics?
Answer: They provide insights into the financial health and performance
of a project or company.
●● What is the importance of public decision-making in engineering
economics?
Answer: It involves evaluating the economic impact of projects on
society and ensuring efficient resource allocation.
●● What is the purpose of using decision trees in engineering
economics?
, Answer: To visualize and analyze the potential outcomes of different
decision paths.
●● What is the relationship between inflation and price change in
engineering economics?
Answer: Inflation affects the purchasing power of money and must be
considered in cost estimations.
●● What is the significance of replacement analysis in engineering
economics?
Answer: It helps determine the optimal time to replace equipment or
assets based on cost and efficiency.
●● What is the role of compounding and series in financial analysis?
Answer: They are used to calculate future values of investments and
cash flows over time.
●● What is engineering economy?
Answer: A collection of techniques that simplify comparisons of
alternatives on an economic basis.
●● What does engineering economy NOT do?
Answer: It does not determine what the alternatives are; it begins after
alternatives have been identified.
