1.You plan to make a deposit of $10,000 into your investment account, and then start
withdrawing $2,000 from the account every year for 7 years. The account is expected to
provide a rate of return of 12% every year. At the end of 7 years you will withdraw your
remaining balance of $1,929 and close the account. Which of the numbers given above
represents variable A?
SOL. $2,000
2.A typical code of ethics for engineers would most likely mandate all of the below,
EXCEPT
SOL. Engineers should only offer a payment or a gift in exchange for awarding a
contract by public authority if specifically authorized by the employer to do so
3.For a given positive interest rate, the money an investment accumulates over time
using compound interest is __ if simple interest is used
SOL. larger than
4.If it is found that a potential future project is more risky than previously thought
SOL. the MARR used in the evaluation of the project should be increased
5.A project that is expected to return less than the MARR
SOL. should not be funded.
6.Which of the interest rates below would make $100 today economically equivalent to
$125 in 1 year?
SOL. 25%
7.All of the following mean the same as Minimum Attractive Rate of Return except
SOL. inflation rate.
8.All of the below typically represent cash outflows, EXCEPT
SOL. Revenue
9.You are loaning $10,000 to your friend for 1 year, and you are absolutely sure your
friend will pay you back. If you expect the inflation rate will be around 4% next year, what
is the interest rate you need to ask your friend to pay if you want to get a real rate of
return of 5% on the loan?
SOL. 9%
10.All of the following are examples of noneconomic factors except
SOL. profit
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