1. The concept that different sums of money at different points in time can be said to be equal to each other in economic terms is known as: (a) Evaluation criterion (d) Intangible factors (b) Alternative selection Equivalence (c) Cash flow 2. For the cash flow diagram shown below, the equivalent annual worth in years 1 thru 8 at an interest rate of 10% per year is closest to: (a) $150.23 (b) $168.62 (c) $188.45 (d) $200.23 (e) Over $205 0 1 2 3 4 5 6 7 8 Year 50 100 150 200 250 300 350 400 3. A construction company has an option to purchase a certain bulldozer for $61,000 at any time between now and four years from now. If the company plans to purchase the dozer four years from now, the equivalent present amount that the company is paying for the dozer at 6% per year interest is closest to (a) $41,230 (b) $46,710 c)$48,320 (d) Over $49,000 4. A manufacturer of toilet flush valves wants to have $2,800,000 available 10 years from now so that a new product line can be initiated. If the company plans to deposit money each year, starting one year from now, how much will it have to deposit each year at 6% per year interest in order to have the $2,800,000 available immediately after the last deposit is made? (a) $180,000 (b)$182,500 (c)$191,300 (d) $212,500 (e) 220,000 5. If you deposit $1000 now, $1000 three years from now and withdraw $800 four years from now, The amount that will be in the account 10 years from now at an interest rate of 10% per year is closest to: (a) $1290 (b) $2380 (c) $3125 (d) $4541 (e) $5959 6. When you graduate, you plan to start a consulting firm. If you borrow $100,000 at 10% per year interest, how much must you pay on the loan each year in order to pay the loan off in 6 years? (a) $18,744 (b) $20,541 (c) $22,961 (d) $23,450 (e) Over $23,500 7. A manufacturer of tygon tubing wants to have $3,000,000 available 10 years from now so that a new product line can be initiated. If the company plans to deposit money each year, starting one year from now, the equation that represents how much it will have to deposit each year at 10% per year interest in order to have the $3,000,000 available immediately after the last deposit is made is: (a) 3,000,000(A/F,10%,10) (b) 3,000,000(A/F,10%,11) (c) 3,000,000+ 3,000,000(A/F,10%,10) (d) 3,000,000+ 3,000,000(A/F,10%,9) (e) 3,000,000(A/P,10%,10) 8. Approximately how long would it take for money to triple in value at an interest rate of 20% per year (select closest answer)? (a) 4 years (b) 5 years (c) 6 years (d) 8 years (e) 9 years 3=1+0.2+ 2=0.2+ 9. You found a report that stated that the equivalent annual worth of chemical costs associated with a water treatment process were $125,000 per year for a certain 5-year period. The report += 10 years stated that the cost in year 1 was $190,000 and the cost decreased by a uniform amount each year (i.e. arithmetic gradient) over that 5-year period, but it didn't say how much the decrease was each year. If the interest rate was 20% per year, what was the amount of the annual decrease (i.e. G)? (a) <$27,000 (b) $27,358 (c) $31,136 (d) $33,093 (e) $39,622 uniformly 10. Maintenance costs for a regenerative thermal oxidizer have been increasing for 5 years. If the cost in year I was $8000 and it increased by $900 per year through year 5, the present worth of the costs at an interest rate of 10% per year is closest to: (a)$31,670 (b)$33,520 (c)$34,140 (d)$36,500 (e)$37,850 11. In economic analysis, revenues and costs are examples of what? (a) Intangible factor (b) Cash flow (c) Rate of return (d) Equivalence (e) Both a and b 12. Find the present worth of cash flow of $2000 that starts now and continues thru year 10 if the interest rate is 10% per year. (a) $11,744 (b)$14,290 (c) $15,880 (d) $16,470 (e) Over $18,000