Qustión 1: Select true or false for each of the following statements & correct f
ID: 1163099 • Letter: Q
Question
Qustión 1: Select true or false for each of the following statements & correct false statements: Statement True False 1. The purchase prio of a machine that is used to manufacture a product is considered an indirect cost 2. The lowest potential for life-cycle cost savings of a product/project is 3. The monthly operat 4. Interest costs on borrowed capital are considered variable costs duringtheearlystages of the acquisition rase ion and maintenance costs of a facility are considered as recurring costs n the engineering economic analysis procedure, performance mgnitoring and post-evatuation of results requires that the initial projected outcomes of the selected alternative be subsequently compared with the actual results achieved Question 2: Select the best possible answer 1. In the engineering economic analysis procedure, problem definition involves: A. Problem recognition B. Problem formulation Problem Evaluation All the above 2. For solutions to engineering problems to be economically acceptable, these solutions, among other things, must: A. Demonstrate a positive balance of short-term benefits over long-term costs, represent creative and innovative technology and ideas, and promote the survival of an organization (B.) Demonstrate a positive balance of long-term benefits over long-term costs, represent creative and innovative technology and ideas, promote the survival of an organization, and allow identification and analysis of their estimated outcomes C. Demonstrate a positive balance of long-term benefits over initial investment costs and represent creative and innovative technology and ideas D. Represent creative and innovative technology and ideas and promote the survival of an organization 3. Which of the following statements is incorrect A. The unit price for a product decreases when the demand increases B. When alternatives are compared for one year or less, if revenues and other economic benefits are present and vary among alternatives, choose the alternative C. Present economy studies can be used for material selection that maximizes profitability based on the number of defect-free units of output None of the above is correctExplanation / Answer
Q1. 1. False. As the indirect costs are costs of foregone activities, purchase price of machine for manufacturing of goods is a direct cost
Correct Statement: The purchase price of a machine that is used to manufacture a product is considered as a direct cost
2. False. A product or project in the initial stages of its acquisition is the most productive and hence yields the maximum output. Hence the per unit cost savings in the initial stages is highest. The corrected statement would be
The highest potential for life cycle cost savings.....(rest same)
3. True
4. True. As borrowed capital would depend on the level of output and output varying costs are variable costs
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