ENGINEERING ECONOMIC ANALYSIS ACTUAL
TEST PAPER 2026 COMPLETE QUESTIONS AND
SOLUTIONS GRADED A+
◉ book cost. Answer: a cost that does not involve a cash transaction
but is reflected in the accounting system
◉ breakeven. Answer: level of output at which average total costs
equal average revenue or market price
◉ cash cost. Answer: a cost that involves payment of cash (and
results in a cash flow).
◉ cash flow diagram. Answer: A graphical representation of the
transactions of cash i.e. both cash outflows and cash inflows with
respect to a time scale. These diagrams are structured with a
horizontal line which begins at present time and has either arrows
pointed up or down to represent either money inflow or money
outflow.
◉ cost and price index. Answer: Indexes are dimensionless
numerical values that reflect historical change in engineering
(and other) costs and prices.
, ◉ detailed estimate. Answer: is an estimate that breaks the subject
down into as many items or components possible. Each component
are often described with specifications
◉ estimation by analogy. Answer: allows one to use knowledge
about well-understood activities to anticipate costs and benefits
for new activities.
◉ external cost. Answer: value of the negative impact on bystanders
◉ fixed cost. Answer: a cost that does not change, no matter how
much of a good is produced
◉ incremental cost. Answer: an increase in cost between two
alternatives
◉ internal cost. Answer: A cost--such as for raw materials,
manufacturing costs, labor, taxes, utilities, insurance, or rent--that is
accounted for when a product or service is evaluated for pricing.
◉ learning curve. Answer: captures the relationship between task
performance and task repetition.
TEST PAPER 2026 COMPLETE QUESTIONS AND
SOLUTIONS GRADED A+
◉ book cost. Answer: a cost that does not involve a cash transaction
but is reflected in the accounting system
◉ breakeven. Answer: level of output at which average total costs
equal average revenue or market price
◉ cash cost. Answer: a cost that involves payment of cash (and
results in a cash flow).
◉ cash flow diagram. Answer: A graphical representation of the
transactions of cash i.e. both cash outflows and cash inflows with
respect to a time scale. These diagrams are structured with a
horizontal line which begins at present time and has either arrows
pointed up or down to represent either money inflow or money
outflow.
◉ cost and price index. Answer: Indexes are dimensionless
numerical values that reflect historical change in engineering
(and other) costs and prices.
, ◉ detailed estimate. Answer: is an estimate that breaks the subject
down into as many items or components possible. Each component
are often described with specifications
◉ estimation by analogy. Answer: allows one to use knowledge
about well-understood activities to anticipate costs and benefits
for new activities.
◉ external cost. Answer: value of the negative impact on bystanders
◉ fixed cost. Answer: a cost that does not change, no matter how
much of a good is produced
◉ incremental cost. Answer: an increase in cost between two
alternatives
◉ internal cost. Answer: A cost--such as for raw materials,
manufacturing costs, labor, taxes, utilities, insurance, or rent--that is
accounted for when a product or service is evaluated for pricing.
◉ learning curve. Answer: captures the relationship between task
performance and task repetition.
