Practice Concept Of Economic Equivalence (1.4.1) - Construction Methods and Equipment Management

Practice: Concept of Economic Equivalence

Lesson 1.4.1Construction Methods and Equipment Management

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9 questions

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2 cards from this section. Quick, good the night before a test.
Exercise
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Quiz
3 questions · about 2 min · pass mark 70%. Hints available.
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6 sample questions

Question 1.
What is the formula for calculating future value using a single payment compound amount factor?
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Remember the elements in the formula.
Question 2.
Define economic equivalence in your own words.
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Think about future and present cash flows.
3Question 3.
Which of the following describes the time value of money?
- A. Money today is the same as money tomorrow
- B. Money today has the potential to earn interest
- C. Money can only lose value over time
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Consider how banks work with deposits.
4Question 4.
True or False: Economic equivalence means different cash flows are always equal.
- True
- False
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Focus on the meaning of equivalence vs equality.
Question 5.
A bank offers 7% interest compounded annually. If you want to have 1 million rupees in 10 years, how much must you invest today?
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Use the present value formula to figure this out.
Question 6.
An equipment replacement fund needs 300,000 rupees in 3 years. Annual deposits into a sinking fund earn 5% interest. How much does each deposit need to be?
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Remember the sinking fund formula involves both depositing and interest calculations.

5 more questions in this section. Enroll free to practise them all.