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Mathematics · Studypool

engineering economy

Post ID: 3034810

QUESTION 1

  1. Problems 1-2 are based on the information given in the following table:
    YearAB
    0-2,500-6,000
    17461,664
    27461,664
    37461,664
    47461,664
    57461,664
    IRR15%12%
    The internal rate of return on the incremental cash flows is closest to _________.

    A.4%
    B.6%
    C.8%
    D.10%
    E.12%

7.14 points

QUESTION 2

  1. Based on the information in the previous Problem #1, if only one project can be undertaken and the company's management requires a MARR of 8% on all new investment projects, which alternative do you recommend?
    A.A
    B.B
    C.Both projects are equally worthwhile
    D.Neither project should be undertaken
    E.I'm lost so I say flip a coin

7.14 points

QUESTION 3

  1. A proposed project has the following costs and benefits:
    YearCostsBenefits
    02,000
    1 1,000
    2 1,000
    3 1,000
    4 2,000
    5 2,000
    Assuming an interest rate of 10%, the project's simple payback period is most nearly _________.
    A.2 years
    B.4 years
    C.6 years
    D.5 years
    E.7 years

7.14 points

QUESTION 4

  1. Using the information in Problem #3 and linear interpolation, the project's discounted payback period is most nearly ___________.
    A.3.62 years
    B.2.33 years
    C.2.05 years
    D.3.41 years
    E.None of the above

7.14 points

QUESTION 5

  1. Machine X has an intial cost of $10,000. It is expected to last 12 years, to cost $200 per year to maintain and to have a salvage value of $1,000 at the end of its useful life. The equivalent uniform annual cost of the machine at 8% interest is most nearly ___________.
    A.$1,160
    B.$1,507
    C.$1,580
    D.$1,475
    E.None of the above

7.14 points

QUESTION 6

  1. A company is considering buying a new piece of machinery that costs $20,000 and has a salvage value of $6,000 at the end of its 5-year useful life. The machinery nets $5,000 per year in annual revenues. The internal rate of return (IRR) on this investment is between__________.
    A.10%-11%
    B.12%-13%
    C.14%-15%
    D.13%-14%
    E.None of the above

7.14 points

QUESTION 7

  1. Using the information in the previous Problem #6, if the company considering purchasing the machine uses a MARR of 12%, would you recommend that it be bought?
    A.I don't know what I'd recommend
    B.I would flip a coin: Heads = yes, Tails = no
    C.No
    D.Yes

7.14 points

QUESTION 8

  1. A proposed project will cost $1,000 two years from today. Beginning at the end of year five, $300 in annual benefits will be received, continuing until the end of year nine. What is the project's present (year 0) worth at MARR = 10%?
    A.-$50
    B.-$234
    C.-$94
    D.-$42
    E.None of the above

7.14 points

QUESTION 9

  1. Consider a project that costs $500 now is is expected to generate $250 in net revenues at the end of each of the next three years. If the MARR is 6%, the future worth (year 3) of this project is most nearly ________.
    A.$300
    B.$210
    C.$225
    D.$200
    E.None of the above

7.14 points

QUESTION 10

  1. Use the following information for Problems 10-14: A company produces and sells a product with a monthly demand estimated to be Q = 500 - 5P, where P is the selling price per unit in dollars. The fixed cost of production is $1,000 per month and the variable cost of production is $20 per unit.The profit-maximizing quantity is _______________.
    A.155
    B.195
    C.200
    D.245
    E.None of the above

7.14 points

QUESTION 11

  1. Use the following information for Problems 10-14: A company produces and sells a product with a monthly demand estimated to be Q = 500 - 5P, where P is the selling price per unit in dollars. The fixed cost of production is $1,000 per month and the variable cost of production is $20 per unit.Price = __________ at the profit-maximizing quantity.
    A.$45
    B.$60
    C.$35
    D.$52
    E.None of the above

7.14 points

QUESTION 12

  1. Use the following information for Problems 10-14: A company produces and sells a product with a monthly demand estimated to be Q = 500 - 5P, where P is the selling price per unit in dollars. The fixed cost of production is $1,000 per month and the variable cost of production is $20 per unit.Total Revenue is __________ at the profit-maximizing price and quantity.
    A.$14,050
    B.$12,000
    C.$13,575
    D.$11,505
    E.None of the above

7.14 points

QUESTION 13

  1. Use the following information for Problems 10-14: A company produces and sells a product with a monthly demand estimated to be Q = 500 - 5P, where P is the selling price per unit in dollars. The fixed cost of production is $1,000 per month and the variable cost of production is $20 per unit.Total Cost is ___________ at the profit-maximizing price and quantity.
    A.$2025
    B.$1705
    C.$2950
    D.$5000
    E.None of the above

7.14 points

QUESTION 14

  1. Use the following information for Problems 10-14: A company produces and sells a product with a monthly demand estimated to be Q = 500 - 5P, where P is the selling price per unit in dollars. The fixed cost of production is $1,000 per month and the variable cost of production is $20 per unit.Profit is __________ at the profit-maximizing price and quantity.
    A.$7000
    B.$6500
    C.$5850
    D.$6250
    E.None of the above