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CM 2113 WANG (ACTUAL 2025/2026) TEST 2
QUESTIONS WITH 100% VERIFIED ANSWERS.
The difference between accounting and engineering economy is that accounting
evaluates and predicts future events, and engineering economy evaluates past
performance. TRUE/FALSE - (answer)False
Payments that differ in amount may be equal if made at different points in time.
TRUE/FALSE - (answer)True
(P/F, i, N) stands for finding future value given a present value at interest rate i for
N years. TRUE/FALSE - (answer)False
Uniform Series of Payments is a series of payments or receipts that occurs at the
beginning of each period for N periods. TRUE/FALSE - (answer)False
Compared to Straight Line (SL) depreciation method, Sum of the Year (SOY)
depreciation method results in larger depreciation charges during an asset's early
years and smaller charges as the asset nears the end of its depreciation life.
TRUE/FALSE - (answer)True
The modified accelerated cost recovery system (MARCS), salvage values are
assumed to be 10% of the total purchase price. TRUE/FALSE - (answer)False
When calculating equipment hourly operation cost, tires cost should be estimated
separately as part of operation cost. TRUE/FALSE - (answer)True
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Ownership costs generally increases with equipment ages because of the repair
and maintenance cost. TRUE/FALSE - (answer)False
The Time Value of money is based on the premise that money can generate
_______ over a period of time. - (answer)Interest
Look up the following factor value in the provided interest table. (A/F, 3%, 6) = -
(answer)
Look up the following factor value in the provided interest table (P/F, 7%, 15) = -
(answer)9.108
A contractor plans to purchase a pickup. Select the correct equation and factor to
determine if a contractor plans to purchase a pickup truck in 3 years, how much
should the contractor invest at 5% interest today to have the $55,000 needed to
purchase the truck at the end of 3 years? - (answer)$47,520
A contractor is investing $5,000 per year in savings certificates at an annual
interest rate of 6% and plans to continue the investment program for 20 years,
what will the value of the contractor's investment be at the end of 20 years? -
(answer)$183,930
What is the annual cost for a tractor if a contractor is considering purchasing a
used tractor for $180,000 at 2% interest that she could use for 10 years and then
CM 2113 WANG (ACTUAL 2025/2026) TEST 2
QUESTIONS WITH 100% VERIFIED ANSWERS.
The difference between accounting and engineering economy is that accounting
evaluates and predicts future events, and engineering economy evaluates past
performance. TRUE/FALSE - (answer)False
Payments that differ in amount may be equal if made at different points in time.
TRUE/FALSE - (answer)True
(P/F, i, N) stands for finding future value given a present value at interest rate i for
N years. TRUE/FALSE - (answer)False
Uniform Series of Payments is a series of payments or receipts that occurs at the
beginning of each period for N periods. TRUE/FALSE - (answer)False
Compared to Straight Line (SL) depreciation method, Sum of the Year (SOY)
depreciation method results in larger depreciation charges during an asset's early
years and smaller charges as the asset nears the end of its depreciation life.
TRUE/FALSE - (answer)True
The modified accelerated cost recovery system (MARCS), salvage values are
assumed to be 10% of the total purchase price. TRUE/FALSE - (answer)False
When calculating equipment hourly operation cost, tires cost should be estimated
separately as part of operation cost. TRUE/FALSE - (answer)True
, 2|Page
Ownership costs generally increases with equipment ages because of the repair
and maintenance cost. TRUE/FALSE - (answer)False
The Time Value of money is based on the premise that money can generate
_______ over a period of time. - (answer)Interest
Look up the following factor value in the provided interest table. (A/F, 3%, 6) = -
(answer)
Look up the following factor value in the provided interest table (P/F, 7%, 15) = -
(answer)9.108
A contractor plans to purchase a pickup. Select the correct equation and factor to
determine if a contractor plans to purchase a pickup truck in 3 years, how much
should the contractor invest at 5% interest today to have the $55,000 needed to
purchase the truck at the end of 3 years? - (answer)$47,520
A contractor is investing $5,000 per year in savings certificates at an annual
interest rate of 6% and plans to continue the investment program for 20 years,
what will the value of the contractor's investment be at the end of 20 years? -
(answer)$183,930
What is the annual cost for a tractor if a contractor is considering purchasing a
used tractor for $180,000 at 2% interest that she could use for 10 years and then
