Engineering Economics MCQs

Engineering Economics MCQs

The following Engineering Economics MCQs have been compiled by our experts through research, in order to test your knowledge of the subject of Engineering Economics. We encourage you to answer these multiple-choice questions to assess your proficiency.
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1: Almost 72% of the world's reserves of oil shale are found in ____.

A.   The United States

B.   Russia

C.   Canada

D.   Iraq

E.   Ukraine.

2: The united states government heavily subsidizes ethanol production from corn because ____.

A.   Of a very low net energy yield.

B.   Reduce the use of coal-burning plants.

C.   Comes from cheap-to-extract deposits.

D.   Easily transported between countries

3: What is engineering economics?

A.   The study of financial management in engineering projects

B.   The application of economic principles to engineering decision-making

C.   The study of engineering principles without considering economic factors

D.   The analysis of engineering designs and processes

4: Which of the following is a key concept in engineering economics?

A.   Cost analysis

B.   Risk assessment

C.   Time value of money

D.   Engineering ethics

5: What is the time value of money?

A.   The principle that money loses value over time

B.   The principle that money has different worth at different points in time

C.   The principle that money is always worth the same amount

D.   The principle that money should not be a factor in engineering decisions

6: Which of the following methods is used to evaluate investment alternatives?

A.   Payback period

B.   Net present value (NPV)

C.   Internal rate of return (IRR)

D.   All of the above

7: Which of the following is a measure of the profitability of an investment?

A.   Payback period

B.   Return on investment (ROI)

C.   Discount rate

D.   Opportunity cost

8: What is the payback period?

A.   The time it takes to recoup the initial investment

B.   The time value of money

C.   The discount rate used in investment analysis

D.   The measure of project profitability

9: Which of the following is true about net present value (NPV)?

A.   A positive NPV indicates a profitable investment

B.   NPV is not influenced by the discount rate

C.   NPV is used to measure short-term financial gains

D.   A negative NPV indicates a profitable investment

10: What is the internal rate of return (IRR)?

A.   The discount rate at which the NPV of an investment becomes zero

B.   The time it takes to recoup the initial investment

C.   The measure of project profitability

D.   The average annual return on investment

11: What is the concept of opportunity cost in engineering economics?

A.   The cost of giving up the best alternative when making a decision

B.   The total cost of a project

C.   The cost of labor and materials

D.   The cost of financing a project

12: Which of the following factors should be considered in engineering economic analysis?

A.   Initial investment cost

B.   Maintenance and operating costs

C.   Salvage value

D.   All of the above