Below are the answer to the questions posted on the subject Engineering Economy.
1. It is a depreciation method based on the assumption that the value of a property is directly proportional to its age.
A. Straight Line Method
2. Which of the following is NOT a requirement of a depreciation method?
D. The book value should be higher than the market value
3. The decrease in the purchasing power of money
4. Equal periodic payment of a debt.
5. Minimum number of years required for a bond redemption.
C. 10 years
6. Amount of money spent on a business operation which cannot be recovered due to certain reason.
B. Sunk cost
7. Represents share in the ownership of the capital corporation.
8. It is the actual interest earned by the principal in ONE YEAR.
A. Effective interest
9. A type of annuity where the payment goes on indefinitely
10. An economic situation when there is only one vendor of a product or service.
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