Engr-307 Engineering Economics EXAM 1-Summer June 2016 Name: ID# Question 1-(35

Question

Engr-307 Engineering Economics EXAM 1-Summer June 2016 Name: ID# Question 1-(35 Points Total) 1) A (20 Points) List all items COMPRISE of the: (from 1-8 each question 2 point) a) Annual product total cost is b) Annual operating costs is: 2) State if (True or (False): Present and future benefits (income) and costs need to be estimated to determine the attractiveness (worthiness) of a new product investment alternative 3) It gives engineers the tools they need to make decisions that maximize the use of A- Feasibility study B- Engineering decision C- Engineering economics D- Business decisions Refers to the money entering or leaving a project or business during a specific period of time: A- Cash flow B- Interest rate C- Present worth D- Final future flow Is the price paid for the use of borrowed money? A- Interest B- Benefits C- Investment D- Economics' inflation 4) 5) 6) interest accrues only on the principle amount invested, but with interest is earned on interest: A- Compound interest- Simple interest B- Simple interest-Compound interest C. Single payment-Compound payment D. None of the above

Explanation / Answer

1.Annual product of total cost- Total cost = holding cost + orderingcost.

Annual operating cost-This is cost related to operation of any business which is reflecked in company's business statement.

2.True.

4 a) Cash flow.

5)A.interest.

6)A.Compound interest,simple interest.

8) E.present worth benefit-present worth cost greater than equal to 0.

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