nswer all questions: Question 1 (5 points): Select the best correct answer 1. If
ID: 2429109 • Letter: N
Question
nswer all questions: Question 1 (5 points): Select the best correct answer 1. If the internal rate of return for a given project is l 1% the net present worth for this project at an interest rate of 9%; A. Will be a negative value B. will be a positive value C. Can be a negative or a positive value D. None of the above is correct 2. The main focus of the "bottom-up" estimating approach is to estimate cost elements A. At the higher levels of the WBS cost structure, which are then added together f the WBS cost structure, which are then added together C. At the lower levels of the WBS cost structure, which are then added together D. At the higher levels of the WBS cost structure, which are then added together to obtain the total cost of the product/project and, therefore, determine what should the product cost B. At the lower levels o to obtain the total cost of the product/project and, therefore, determine what should the product cost to obtain the total cost of the product/project and, therefore, determine what does the product cost to obtain the total cost of the product/project and, therefore, determine what does the product cost 3. Selecting the project that maximizes the B/C ratio: A. Guarantees that the selected project is the most profitable one B. Guarantees that the best project is selected C. Does not guarantee that the best project is selected D. Indicates that the incremental B/C ratio for this project as compared to all other projects will be higher than one 4. As the estimate becomes more detailed: A. The estimate becomes less accurate and the cost of estimating increases B. The estimate becomes less accurate and the cost of estimating decreases C. The accuracy of the estimate improves and the cost of estimating decreases D. The accuracy of the estimate improves and the cost of estimating increases 5. The objective of value engineering is to try to meet the produet's target cost by: A. Reducing the manufacturing costs while maintaining the required product B. Reducing the manufacturing costs to be less than the target cost calculated C. Reducing the manufacturing costs to be less than the selling price of bes functions from the selling price of best competitor competitor D. All the aboveExplanation / Answer
1.
B
Since the interest rate of 9%, is less than the IRR, then it will give positive value.
2.
B
It starts from the lower level and move upwards to identify the product cost.
3.
D
It will give the best incremental B/C ratio that will give superior result. Though, it may not ensure that it will deliver higher net present worth.
4.
D
Accuracy level of the estimate, improves, but cost of estimation, also increases.
5.
A
It is the primary objective of the value engineering.
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