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Engineering Economy, 5/e

Leland Blank, Texas A&M University
Anthony Tarquin, University of Texas - El Paso

Present Worth Analysis

Matching Quiz

Select the correct answers on the left to fill in the blanks on the right. There are more answers than questions, therefore some of the items on the right will remain unused. When you have completed the quiz, click the SUBMIT button at the bottom.


1				The equal service requirement associated with present worth comparisons can be met by either comparing different life alternative over their LCM of lives or by comparing them over a ________________.


2				In assuming that the respective cash flows of different-life alternatives will be the same in each succeeding life cycle, this actually assumes that if the cash flows change, they will do so by exactly the ______________.


3				The present worth of a project that is assumed to last forever is known as its __________________.


4				An annual worth can be converted into a capitalized cost by _______________.


5				In order to find the capitalized cost of an alternative which has recurring periodic costs, these costs must first be converted into______________.


6				Another name for bond interest rate is the ___________rate.


7				The amount of interest payable on a municipal bond is determined by multiplying the bond interest rate per period by the __________.


8				Future worth comparison of alternatives, like PW comparison, is performed ____________.

Answer choices for questions 1 through 8

A)	Specified study period
B)	Annual worth values over one life cycle
C)	Capitalized cost
D)	Life-cycle cost
E)	Multiplying by the effective annual rate
F)	Discount
G)	Discount
H)	Inflation or deflation rate
I)	Face value
J)	Same amount annually
K)	Present worth equivalents
L)	Over the LCM of lives
M)	Over 2 alternatives only
N)	Dividing by the interest rate

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