ENGV 380 QUIZ 4 – COSTS AND ENGINEERING QUESTIONS AND ANSWERS ALREADY
GRADED A+| 100% VERIFIED SOLUTIONS | LIBERTY UNIVERSITY | 2026 UPDATED………...
Core Domains
Cost Terminology and Classification
Cost Estimation Techniques
Time Value of Money and Equivalence
Present Worth and Annual Cost Analysis
Rate of Return and Incremental Analysis
Break-Even and Payback Analysis
Depreciation and After-Tax Analysis
Life Cycle Costing and Benefit-Cost Analysis
Replacement and Retention Decisions
Risk, Uncertainty, and Sensitivity Analysis
Introduction
This comprehensive examination assesses the candidate's mastery of engineering economics and
cost analysis principles essential for project and construction management. It evaluates
foundational cost concepts, applied estimation techniques, time value of money, project evaluation
methods, depreciation, taxes, and decision-making under uncertainty. The multiple-choice and
scenario-based structure emphasizes real-world application, including present worth analysis, rate
of return, break-even analysis, replacement decisions, and benefit-cost evaluation. Successful
,performance demonstrates readiness to apply economic principles to engineering and construction
project decisions with analytical rigor and professional judgment.
SECTION ONE: QUESTIONS 1–100
Question 1
A cost that is constant and independent of the output or activity level is called a:
A. Variable cost
B. Marginal cost
C. Average cost
D. Fixed cost
🟢 D. Fixed cost
🔴 RATIONALE: A fixed cost remains constant regardless of the output or activity level, such as
rent or insurance.
Question 2
The variable cost associated with producing one additional unit of output is called:
A. Fixed cost
B. Marginal cost
C. Average cost
D. Sunk cost
,🟢 B. Marginal cost
🔴 RATIONALE: Marginal cost is the change in total cost resulting from producing one additional
unit of output.
Question 3
A cost that has already been incurred and cannot be recovered is called a:
A. Opportunity cost
B. Sunk cost
C. Marginal cost
D. Incremental cost
🟢 B. Sunk cost
🔴 RATIONALE: A sunk cost is a past cost that has already been incurred and cannot be
recovered, and it should not influence future decisions.
Question 4
The cost of the next best alternative that is forgone when a decision is made is called:
A. Sunk cost
B. Fixed cost
C. Opportunity cost
D. Marginal cost
, 🟢 C. Opportunity cost
🔴 RATIONALE: Opportunity cost is the value of the next best alternative that is given up when a
particular decision is made.
Question 5
Total cost is calculated as:
A. Fixed cost minus variable cost
B. Fixed cost plus variable cost
C. Variable cost divided by output
D. Fixed cost divided by output
🟢 B. Fixed cost plus variable cost
🔴 RATIONALE: Total cost equals the sum of total fixed cost and total variable cost.
Question 6
Average cost is calculated as:
A. Total cost divided by total output
B. Total output divided by total cost
C. Fixed cost divided by variable cost
D. Variable cost divided by fixed cost
GRADED A+| 100% VERIFIED SOLUTIONS | LIBERTY UNIVERSITY | 2026 UPDATED………...
Core Domains
Cost Terminology and Classification
Cost Estimation Techniques
Time Value of Money and Equivalence
Present Worth and Annual Cost Analysis
Rate of Return and Incremental Analysis
Break-Even and Payback Analysis
Depreciation and After-Tax Analysis
Life Cycle Costing and Benefit-Cost Analysis
Replacement and Retention Decisions
Risk, Uncertainty, and Sensitivity Analysis
Introduction
This comprehensive examination assesses the candidate's mastery of engineering economics and
cost analysis principles essential for project and construction management. It evaluates
foundational cost concepts, applied estimation techniques, time value of money, project evaluation
methods, depreciation, taxes, and decision-making under uncertainty. The multiple-choice and
scenario-based structure emphasizes real-world application, including present worth analysis, rate
of return, break-even analysis, replacement decisions, and benefit-cost evaluation. Successful
,performance demonstrates readiness to apply economic principles to engineering and construction
project decisions with analytical rigor and professional judgment.
SECTION ONE: QUESTIONS 1–100
Question 1
A cost that is constant and independent of the output or activity level is called a:
A. Variable cost
B. Marginal cost
C. Average cost
D. Fixed cost
🟢 D. Fixed cost
🔴 RATIONALE: A fixed cost remains constant regardless of the output or activity level, such as
rent or insurance.
Question 2
The variable cost associated with producing one additional unit of output is called:
A. Fixed cost
B. Marginal cost
C. Average cost
D. Sunk cost
,🟢 B. Marginal cost
🔴 RATIONALE: Marginal cost is the change in total cost resulting from producing one additional
unit of output.
Question 3
A cost that has already been incurred and cannot be recovered is called a:
A. Opportunity cost
B. Sunk cost
C. Marginal cost
D. Incremental cost
🟢 B. Sunk cost
🔴 RATIONALE: A sunk cost is a past cost that has already been incurred and cannot be
recovered, and it should not influence future decisions.
Question 4
The cost of the next best alternative that is forgone when a decision is made is called:
A. Sunk cost
B. Fixed cost
C. Opportunity cost
D. Marginal cost
, 🟢 C. Opportunity cost
🔴 RATIONALE: Opportunity cost is the value of the next best alternative that is given up when a
particular decision is made.
Question 5
Total cost is calculated as:
A. Fixed cost minus variable cost
B. Fixed cost plus variable cost
C. Variable cost divided by output
D. Fixed cost divided by output
🟢 B. Fixed cost plus variable cost
🔴 RATIONALE: Total cost equals the sum of total fixed cost and total variable cost.
Question 6
Average cost is calculated as:
A. Total cost divided by total output
B. Total output divided by total cost
C. Fixed cost divided by variable cost
D. Variable cost divided by fixed cost
