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Engineering Economy problems

2. If a is the base amount expenditure, b is the increase in the operation cost each year over a period of n years, the total cost of maintenance is :
Options
A. a + (n + 1) b
B. a + (n - 1) b
C. a x (n - 1) b
D. a - (n - 1) b

5. A construction estimate is used
Options
A. to judge tentatively or approximate value of the project
B. to produce a statement of the approximate cost
C. to decide an approximation of the value of the project and not the exact cost.
D. None of these

6. In a cash-flow diagram :
Options
A. Time 0 is considered to be the present
B. Time 1 is considered to be the end of time period 1
C. A vertical arrow pointing up indicates a positive cash flow
D. An arrow pointing downward indicates a negative cash flow
E. All of these

7. Pick up the correct statement from the following:
Options
A. The capital required to get a project started, is called first cost.
B. The costs associated with a new or existing project that remain unaffected by the changes in activity level over the normal range of operation of the project, are called fixed costs.
C. The group of costs that vary proportionately to the changes in the activity level of a new or existing project are called variable costs.
D. All of these

9. Which one of the following definitions, is correct?
Options
A. The ratio of total debt to share holder's equity is called 'debt ratio'.
B. The ratio debt-to-total assests is called Debt-to-total assest ratio.
C. The ratio of earnings before interest and taxes for a particular reporting period to the amount of interest charges for the period, is called interest coverage ratio.
D. All of these

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