Name of Student: Date: I-TRUE/FALSE: Indicate whether each of the following stat
ID: 2248428 • Letter: N
Question
Name of Student: Date: I-TRUE/FALSE: Indicate whether each of the following statements is true (T) or false (F). 01. TF In engineering economy, the prospective outcomes of the alternatives should be consistently developed 02. TF Investment decisions should only give weight to consequences that are reduced to monetary terms 03. TF Simple interest does not consider the time value of money principle. 04.-T-F $1,791 ten years from now is equivalent to $900 now if the interest rate equals 8% per year. from a defined viewpoint or perspective 05. T_F The four factors considered in establishing interest rates include risk, inflation, administrative costs, and opportunity cost. II. MULTIPLE-CHOICE: Select the best response to each question or statement below You want to find the equivalent present worth for the following cash flow series at an interest rate of 15%. Which of the following statements is incorrect? $2000 6. $2000 $1000 $1000 $1000 $1000 (a) $1,000(PA, 15%, 4) + $2,000 + S2.000(PR 15%, 5) (b) $1,000(PR 15%, 5) + $1,000(PA 15%, 5) +52,000 (c) [S 1,000(FA, 15%, 4) + $2,000] (PF, 15%, 4) + $2.000 (d) [$1,000(FA, l 5%, 5) + $1,000] (PF, 15%, 5) + $2.000 If $ 10,000 is borrowed now at 1 0% per year interest, the balance at the end ofyear 3 after payments of$3000 in year 2 and $3000 in year 3 will be closest to: A. More than $7300 7. B. $7300 C. $7000 D. Less than $7000 Interest Formula Used: The difference in time it would take for money to double at an interest rate of20% per year between simple and compound interest is closest to: A. 1 year B. 2 years. C“ 3 years. D. 4 years Interest Formula Used:
Explanation / Answer
1 true.
2 false. Gains from specialisation and trade are based on comparative advantage and not absolute advantage.
3 holds true
4 is incorrect
5 is true.
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