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University of Ottawa

ENGINEERING ECONOMICSECO 1192rdPractice 3 Partial ExaminationC Thoret1If you apply a breakeven analysis to two mutually exclusive projects that have the same revenues but different costs which of the following criteria would you use to determine the range over which one project is better than another a maximum criterionb minimum criterionc minimum and maximum criteria d none of the above answers2Scenario analysis allows the analyst to examine the sensitivity of a summary measure eg Present Worth to changes to individual project parameters a Trueb FalseINFORMATION FOR QUESTIONS 3 TO 6A car manufacturer must decide on purchasing or making specific car parts oThe total costof making the car parts is 500005xThe cost of buying the car parts from a manufacturer is C25xwhere x represents the annual quantity of car parts3What is the variable production cost of making the car partsa 500005xb 50000c 25xd None of the above answers4What is the breakeven point between buying and making car partsa 25b 2500cCannot be determined from the information givend None of the above answers5Over what range is it cheaper less costly to make car parts a 0 to 250b 2500c 0 to 2500d None of the above answers6In an uncertain environment the decisionmaker has sufficient information to determine the probability of occurrence of future events or outcomesa Trueb False7The type of analysis that allows an analyst to examine the impact of changing only one project parameter at a time on a summary measure eg Present Worth is a Breakeven analysisb Capital rationingc Scenario analysisd None of the above answersEngineering Economics ECO 1192B Page 2Third Partial ExaminationApril 2010
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