EIT Engineering Economics

Question 1

What is the present value of $10,000 received in 5 years at a discount rate of 8%?

Accepted Answer

$6,806

Answer

$7,350

Answer

$8,000

Answer

$14,693

Question 2

Which method computes the rate of return at which the net present value of a project equals zero?

Accepted Answer

Internal Rate of Return (IRR)

Answer

Net Present Value (NPV)

Answer

Payback Period

Answer

Benefit-Cost Ratio

Question 3

In engineering economics, what does MARR stand for?

Accepted Answer

Minimum Acceptable Rate of Return

Answer

Maximum Allowable Return on Risk

Answer

Monthly Accrual Rate Ratio

Answer

Mean Annual Revenue Rate

Question 4

Depreciation using the straight-line method distributes the cost:

Accepted Answer

Equally over the useful life

Answer

More in later years

Answer

Based on actual use

Question 5

What is the capital recovery factor (A/P, i, n) used to calculate?

Accepted Answer

Uniform annual payment equivalent to a present sum

Answer

Present worth of a series of payments

Answer

Future worth of a single payment

Answer

Gradient series present worth

Question 6

The payback period of a $50,000 investment that generates $10,000/year is:

Accepted Answer

5 years

Answer

2 years

Answer

3 years

Answer

10 years