1. What present sum in equivalent to a series of floes annual end-of-year payments, if a total of to payments are made and interest is 6%.

The present sum is closest to

(a) $5,250

(b) 7,350

(c) 9,400

(d) 10,000

(e) 10,600

2. A woman made ten annual end-of-year purchases of $1000 of common stock. At the end of the tenth year, she sold all the stock for $12,000. What interest rate did she obtain on her investment?

Interest is close to:

(a) 2%

(b) 4%

(c) 8%

(d) 14%

(e) 20%

3. High discount rates will promote project designs

(a) Having high annual cost over construction cost ratios for a given output level.

(b) Having low annual cost over construction cost ratios for a given output level.

(c) That are long-lived.

(d) That are capital intensive.

(e) That have none of the above.

4. In engineering economy optimization calculations

(a) Use a single measure of systems effectiveness.

(b) One uses a production function that is linear.

(c) One accounts for intangible.

(d) Commensuration in kind depends on adopting a discount rate.

(e) Cannot be defined by any of the above four completion statements.