APSC 221 MC EXAM QUESTIONS AND
ANSWERS 100% CORRECT
The general price-demand relationship can be expressed as a linear function. (T/F) -
ANSWER True
A license fee is an example of an incremental cost. (T/F) - ANSWER False
One reason why perfect monopolies rarely occur in practice is because:
a) few products are so unique that substitutes cannot be used.
b) a large number of vendors can supply the same product.
c) additional suppliers can enter the marker freely.
d) people usually stop buying the product before this occurs - ANSWER a)
The power-sizing technique is sometimes referred to as a linear model. (T/F) - ANSWER
False
CERs are excellent predictors of cost if they are correctly developed from good
historical data. (T/F) - ANSWER True
Which technique sums the product of several quantities or components and adds these
to any components estimated directly? a) unit technique.
b) power-sizing techniques.
c) factor techniques.
d) adding techniques - ANSWER c)
___ is the use of historical cost data and statistical techniques to predict future costs.
a) power-sizing.
,b) parametric cost estimating.
c) selected estimating.
d) historical estimating - ANSWER b)
The WBS is sometimes called a work element structure. (T/F) - ANSWER True
What does Cn stand for in the above equation?
a) reference year for which cost is known.
b) cost of price of the item in reference year.
c) year for which the cost is to be estimated.
d) estimated cost of price of the item in year being analyzed. - ANSWER d)
Material costs are an example of costs that are typically included in an engineering
economy study. (T/F) - ANSWER True
___ are used in the preliminary or conceptual design stage of a project.
a) cost and revenue estimates
b) definitive estimates
c) semi-detailed or budget estimates
d) order of magnitude estimates - ANSWER c)
The ___ defines a maximum time period and establishes a range of cost and revenue
elements that need to be considered in developing cash flows.
a) life cycle
b) work breakdown structure
c) estimating techniques
d) cost model - ANSWER a)
, The conventional approach for computing interest is the compound interest approach.
(T/F) - ANSWER True
Compound interest takes the interest accumulated in one interest period and adds it to
the principle amount used to calculated interest in the next period. (T/F) - ANSWER True
Mathematical equivalence is a consequence of the mathematical relationship
between___.
a) first cost and salvage value
b) sunk cost and opportunity cost
c) depreciation and market value
d) time and money - ANSWER d)
The base unit of time over which an interest is calculated is called the___.
a) interest duration
b) time period
c) interest cycle
d) interest period - ANSWER d)
On a cash flow diagram, the vertical arrows pointing upwards represent a negative cash
flow. (T/F) - ANSWER False
Market equivalence is a consequence of the ability to ____ one cash flow for another at
zero cost.
a) understand
b) predict impact of
c) exchange
d) analyze - ANSWER c)
ANSWERS 100% CORRECT
The general price-demand relationship can be expressed as a linear function. (T/F) -
ANSWER True
A license fee is an example of an incremental cost. (T/F) - ANSWER False
One reason why perfect monopolies rarely occur in practice is because:
a) few products are so unique that substitutes cannot be used.
b) a large number of vendors can supply the same product.
c) additional suppliers can enter the marker freely.
d) people usually stop buying the product before this occurs - ANSWER a)
The power-sizing technique is sometimes referred to as a linear model. (T/F) - ANSWER
False
CERs are excellent predictors of cost if they are correctly developed from good
historical data. (T/F) - ANSWER True
Which technique sums the product of several quantities or components and adds these
to any components estimated directly? a) unit technique.
b) power-sizing techniques.
c) factor techniques.
d) adding techniques - ANSWER c)
___ is the use of historical cost data and statistical techniques to predict future costs.
a) power-sizing.
,b) parametric cost estimating.
c) selected estimating.
d) historical estimating - ANSWER b)
The WBS is sometimes called a work element structure. (T/F) - ANSWER True
What does Cn stand for in the above equation?
a) reference year for which cost is known.
b) cost of price of the item in reference year.
c) year for which the cost is to be estimated.
d) estimated cost of price of the item in year being analyzed. - ANSWER d)
Material costs are an example of costs that are typically included in an engineering
economy study. (T/F) - ANSWER True
___ are used in the preliminary or conceptual design stage of a project.
a) cost and revenue estimates
b) definitive estimates
c) semi-detailed or budget estimates
d) order of magnitude estimates - ANSWER c)
The ___ defines a maximum time period and establishes a range of cost and revenue
elements that need to be considered in developing cash flows.
a) life cycle
b) work breakdown structure
c) estimating techniques
d) cost model - ANSWER a)
, The conventional approach for computing interest is the compound interest approach.
(T/F) - ANSWER True
Compound interest takes the interest accumulated in one interest period and adds it to
the principle amount used to calculated interest in the next period. (T/F) - ANSWER True
Mathematical equivalence is a consequence of the mathematical relationship
between___.
a) first cost and salvage value
b) sunk cost and opportunity cost
c) depreciation and market value
d) time and money - ANSWER d)
The base unit of time over which an interest is calculated is called the___.
a) interest duration
b) time period
c) interest cycle
d) interest period - ANSWER d)
On a cash flow diagram, the vertical arrows pointing upwards represent a negative cash
flow. (T/F) - ANSWER False
Market equivalence is a consequence of the ability to ____ one cash flow for another at
zero cost.
a) understand
b) predict impact of
c) exchange
d) analyze - ANSWER c)
