Engineering Economy - Section 1

Directions to Solve

Engineering Economy - Section 1

This is the branch of engineering in which we study about
economy. There are problems available to solve in this section. You can give test and solve these
MCQs.

1.

Annuities involve:

A.	a series of payments
B.	all payments of equal amount
C.	payment at equal time intervals
D.	payments at the end of periods.
E.	All of these

Answer: Option E

Explanation:

No answer description available for this question. Let us discuss.

2.

The CRF (ep) is also known as: [CRF(EP) - 8% - 7], where

A.	8% is the rate of interest per year
B.	money is borrowed for n = 7 years
C.	both (a) and (b)
D.	Neither (a) nor (b)

Answer: Option C

Explanation:

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3.

The wages of supervisors and material handlers are charged as :

A.	Over head
B.	direct labour cost
C.	indirect labour cost
D.	None of these

Answer: Option A

Explanation:

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4.

The project contractor relies on the cost of the estimate :

A.	for submission of a competitive bid for a lumpsum contract
B.	for a unit price contract
C.	for preparation of a definitive estimate to help negotiate contract.
D.	All of these

Answer: Option D

Explanation:

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5.

Pick up the correct statement from the following :

A.	A NPV profile graph shows the curvilinear relationship between the net present value of the project and discount rate employed.
B.	In a NPV profile, if discount rate is zero, then net present value is simply total cash inflows less the total cash outflows of the project.
C.	As the discount rate increases, the net present value profile slopes downward to the right.
D.	All of these

Answer: Option D

Explanation:

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6.

Pick up the correct reason for making conceptual (or preliminary) estimate from the following:

A.	To have a check on a definitive cost estimate.
B.	To check qoutations from contractors and/or sub contractors.
C.	To compute target estimate for the owner while drawings and specifications are in initial stage.
D.	All of these.

Answer: Option D

Explanation:

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7.

The product of CAF (S P) and PWF (S P) is:

A.	1/2
B.	1
C.	1/3
D.	1/4

Answer: Option B

Explanation:

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8.

The annuity which refers to a debt payment for recovering the initial amount or capital in equal periodical payments, is known as;

A.	Present Worth Annuity
B.	Sinking fund annuity
C.	Compound annuity
D.	Capital recovery annuity

Answer: Option D

Explanation:

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