sample exam - Engineering Economics ECO 1192 First Partial...

Info icon This preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
1. The baseline for the acceptance or rejection of a project using the External Rate of Return method is a) MARR b) Recovery period less than the industry threshold c) $0 d) 1 e) None of the above answers. 2. If the rate of interest is 8% compounded quarterly, the nominal rate of interest (annual) is Engineering Economics        ECO 1192                       Page 1 Engineering Economics ECO 1192 First Partial Examination (PE1) C.Théoret
Image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
3. A common period of analysis is required to determine the economic validity of two projects, A and B, when using the Present Worth method. a) True b) False 4. If the rate of interest is 16% compounded quarterly, the effective rate of interest (annual) is 5. A project with a Net Present Worth of $-300 (negative) must have a negative external rate of return. 6. A project with a $0 Net Present Worth must have a lower rate of return than the MARR. a) True b) False. 7. The nominal rate of interest will exceed the effective rate of interest when a) simple interest is used b) compounding tends to infinity c) the nominal rate exceeds MARR d) None of the above answers. 8. Which effective rate of interest compounded semi-annually is equivalent to an actual monthly rate of 2%? INFORMATION FOR QUESTIONS 9 to 12 Projects A to F are ranked in ascending order of their first cost have identical lives (N) have negligible salvage values (SV=0). PROJECTS RATES OF RETURN A B C D E F Engineering Economics        ECO 1192                       Page 2
Image of page 2
A 22 - - - - - B 23 25 - - - - C 21 20 20 - - - D 20 19 18 16 - - E 19 18 17 15 14 - F 15 14 13 12 15 9
Image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern