Question 1

If you are asked to choose between $100 today and $150 one year from now, you are being asked to

Accepted Answer

Revealing your implied interest rate involves comparing the present value of money to its future value, which is exactly what choosing between $100 today and $150 a year from now entails.

Question 2

To resolve uncertainty, engineers apply

Accepted Answer

Sensitivity analysis is used by engineers to determine how different values of an independent variable affect a particular dependent variable under a given set of assumptions, helping to resolve uncertainty.

Question 3

In the context of your textbook, abstraction means

Accepted Answer

Abstraction in the context of a textbook typically refers to a model, which is a simplified representation of a complex reality used to understand or manage that complexity.

Question 4

You decide to buy a car. The following are some questions you have to answer with respect to your purchase. Which question is directly associated with engineering economics?

Accepted Answer

The question of whether to lease or to own a car directly relates to engineering economics because it involves analyzing the financial implications, costs, and benefits over time of different methods of acquiring the car.

Question 5

Joan borrowed $1 000 one year ago. Now she has to repay $1 100. Therefore, the interest rate she pays is

Accepted Answer

The interest Joan pays is the difference between what she borrowed and what she repays, which is $1,100 - $1,000 = $100. The interest rate is the interest divided by the amount borrowed, then multiplied by 100 to get a percentage: ($100 / $1,000) * 100 = 10%.

Question 6

Engineering economics is

Accepted Answer

Engineering economics involves using quantitative analysis techniques to select the most preferable alternative from several technically viable options, considering economic factors.

Question 7

When an engineer prepares a feasibility study, what economic information must she possess in order to do it correctly?

Accepted Answer

The engineer must understand the potential future costs and benefits of the project to assess its economic feasibility accurately.

Question 8

In which of the following problems do you need engineering economics?

Accepted Answer

The answer of In which of the following problems do...

Question 9

An owner of a small company is deciding to sell her business. She received several options specified bellow. Which one should the company's owner accept?

Accepted Answer

The answer of An owner of a small company is...

Question 10

All but one of the following are economic criteria to evaluate an engineering project. Which one is the non-economic criterion?

Accepted Answer

C) Minimum pollution is a non-economic criterion as it focuses on environmental impact rather than financial metrics like profit, cost, rate of return, or payback period.

Question 11

Susan is evaluating an engineering project. She assumes zero inflation for the duration of the project. With respect to this situation, which statement is consistent with the subject matter of engineering economics?

Accepted Answer

A zero inflation assumption can serve as a useful baseline for analysis, but it's important to test how different inflation rates might impact the project to understand its sensitivity to inflationary changes. This approach allows for a more comprehensive evaluation of the project's viability under various economic conditions.

Question 12

Which of the following statements best describes the moral issues faced by engineers while evaluating projects?

Accepted Answer

Moral issues in engineering are complex and context-dependent, meaning there are no universal answers to ethical dilemmas. Engineers must navigate these challenges by considering the specific circumstances of each project and applying ethical principles accordingly.

Question 13

Stan borrowed $5 000 one year ago. Now he has to repay $5 100. The interest Stan pays is

Accepted Answer

The interest Stan pays is the difference between the amount he repays and the amount he borrowed, which is $5,100 - $5,000 = $100.

Question 14

The best way to find some answers to difficult moral questions in engineering design and project evaluation is

Accepted Answer

Professional engineering associations provide guidelines, codes of ethics, and resources specifically tailored to address moral and ethical questions in engineering.

Question 15

From an economic standpoint, any engineering project can be thought of in terms of

Accepted Answer

Engineering projects are evaluated economically by analyzing their costs and benefits over time to determine their viability and potential return on investment.

Question 16

Analyze the following statement: "There is 50% probability of raining." This statement concerns

Accepted Answer

The statement refers to the likelihood of an event occurring, which is a measure of risk.

Question 17

Based on your intuition and experience, which of the following options has the highest value?

Accepted Answer

Option D, $200 invested in a fund earning a 10% annual rate of return, has the highest value due to the combination of a higher principal amount ($200) and a higher rate of return (10%) compared to the other options.

Question 18

Which of the following items has negligible maintenance costs?

Accepted Answer

A ruler, especially if made from durable materials like plastic or metal, typically requires no ongoing maintenance to retain its functionality, unlike computers, buildings, shoes, and fur hats, which require regular upkeep or maintenance.

Question 19

Evaluation of an engineering project involves the following constraints

Accepted Answer

Evaluation of an engineering project involves a comprehensive assessment that includes financial, environmental, social, and political constraints, as these factors collectively influence the feasibility, sustainability, and acceptance of the project.

Question 20

Suppose that you are asked to evaluate a project of building a new bridge. Which of the following factors is the least important in terms of engineering economics?

Accepted Answer

Vehicle stock in a city is the least important factor in terms of engineering economics when evaluating a bridge project. Engineering economics primarily focuses on the cost, value, lifespan, and financial aspects (like interest rates) of a project. Vehicle stock, while relevant to traffic studies, does not directly impact the economic evaluation of the bridge's construction and operation.

Quiz 1: Engineering Decision Making