2.1. How many months would you have to put $500 per month into an account that earns 4% monthly in order to accumulate $6,000? (a) 10 months (b) 65 months (c) 15 months (d) 5 months
For the following questions, choose the letter of the best answer (showing work):
2.1. How many months would you have to put $500 per month into an account that earns 4% monthly
in order to accumulate $6,000?
(a) 10 months
(b) 65 months
(c) 15 months
(d) 5 months
2.2. A machine will need to be replaced 10 years from today for $10,000. How much must be deposited
now into an account that earns 5% per year to cover the replacement cost?
(a) $1,486
(b) $6,139
(c) $10,000
(d) $4,810
2.3. An effective rate of 10% per quarter is closest to what effective rate per year?
(a) 40.00%
(b) 46.41%
(c) 10.38%
(d) 16.99%
2.4. If the
MARR is 20%, which of the following is correct?
(a) Not enough information is given to determine which alternative is preferred
(b) Alternative A is preferred over Alternative B
(c) Alternative B is preferred over Alternative A
(d) Neither Alternative A nor Alternative B is acceptable
2.5. when using the benefit-cost method of analyzing a project, which of the following is a true
statement?
(a) It will always produce a recommendation consistent with the simple payback period method
(b) It will always produce a recommendation consistent with present worth, future worth, and
annual worth methods
(c) It can be used only to evaluate projects from the public sector (such as bridges and roadways)
(d) None of the above
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