Engineering Economics — Quiz 1

Questions in this quiz (10)

1. A city deposits $$4000$$ at the end of each year into a maintenance fund that earns $$6\%$$ annual interest compounded annually. What will be the total amount immediately after the $$15th$$ deposit?

   • $$93104$$
   • $$94960$$
   • $$97246$$
   • $$102384$$

2. A developer plans to make equal annual payments of $$6500$$ at the end of each year for $$20$$ years to repay a loan. If the interest rate is $$5\%$$ per year compounded annually, what is the present value of these payments?

   • $$80997$$
   • $$81004$$
   • $$85432$$
   • $$90215$$

3. An engineer deposits $$7500$$ today into an account that earns $$4\%$$ annual interest compounded annually. What will be the account balance after $$18$$ years?

   • $$14381$$
   • $$15867$$
   • $$16976$$
   • $$15194$$

4. A contractor deposits $$3000$$ at the end of each year for $$10$$ years into an account earning $$8\%$$ annually. What is the total value of the account immediately after the last deposit?

   • $$43460$$
   • $$45698$$
   • $$46430$$
   • $$48322$$

5. A project requires an initial investment of $$300000$$. It generates annual revenues of $$110000$$ and annual operating costs of $$45000$$ for $$10$$ years. The salvage value is $$40000$$. Straight-line depreciation is used. If the tax rate is $$30%$$ and the after-tax $$MARR$$ is $$10%$$, what is the after-tax $$NPV$$?

   • $$28900$$
   • $$34750$$
   • $$39620$$
   • $$42927$$

6. A machine costs $$90000$$ and has a useful life of $$5$$ years with a salvage value of $$10000$$. Annual operating costs are $$12000$$. If the interest rate is $$8\%$$, what is the equivalent annual cost $$EAC$$?

   • $$32837$$
   • $$34580$$
   • $$36920$$
   • $$39150$$

7. A company is comparing two mutually exclusive alternatives: Alternative $$A$$: Initial cost $$120000$$, annual net benefit $$28000$$, life $$6$$ years Alternative $$B$$: Initial cost $$160000$$, annual net benefit $$36000$$, life $$6$$ years If the $$MARR$$ is $$10%$$, which alternative should be selected based on $$NPW$$?

   • Alternative $$A$$
   • Alternative $$B$$
   • Both are equally acceptable
   • Neither is acceptable

8. A city plans to accumulate $$150000$$ in $$25$$ years for a public infrastructure project. If the city earns $$5%$$ annual interest compounded yearly, what equal annual deposit must be made at the end of each year?

   • $$2845$$
   • $$3143$$
   • $$3785$$
   • $$4250$$

9. A municipality takes out a $$300000$$ loan for a water system upgrade at an annual interest rate of $$5%$$. If the loan is repaid with equal yearly payments over $$20$$ years, what is the annual payment?

   • $$19500$$
   • $$24073$$
   • $$28000$$
   • $$30000$$

10. A credit card has a nominal annual interest rate of $$15%$$ compounded monthly. What is the effective annual interest rate?

    • $$15.00%$$
    • $$15.56%$$
    • $$16.08%$$
    • $$16.50%$$