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Information systems and engineering economics MCQs | Page - 10
Dear candidates you will find MCQ questions of Information systems and engineering economics here. Learn these questions and prepare yourself for coming examinations and interviews. You can check the right answer of any question by clicking on any option or by clicking view answer button.
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Q. Your R&D group has developed and tested a computer software package that assists engineers to control the proper chemical mix for the various process manufacturing industries. If you decide to market the software, your first year operating net cash flow is estimated to be
$1,000,000. Because of market competition, product life will be about 4 years, and the product’s market share will decrease by 25% each year over the previous year’s share. You are approached by a big software house which wants to purchase the right to manufacture and distribute the product. Assuming that your interest rate is 15%, for
what minimum price would you be willing to sell the software?
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Q. Find the capitalized equivalent worth for the project cash flow series at an interest rate of 10%.
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Q. The following table contains a summary of how a project’s balance is expected to change over its 5 year service life at 10% interest.:Which of the following statements is incorrect?
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Q. Reconsider the project balance table calculated at 10% given in 5.9.:Which of the following statements is correct?
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Q. A newly constructed water treatment facility cost $2 million. It is estimated that the facility will need renovating every 30 years at a cost of $1 million. Annual repairs and maintenance are estimated to be
$100,000 per year. At an interest rate of 6%, determine the capitalized
cost of the facility.
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Q. Consider the following two investment alternatives:Suppose that your firm needs either machine for only 2 years. The net proceeds from the sale of machine B are estimated to be $200. What should be the required net proceeds from the sale of machine A so that both machines could be considered economically indifferent at an interest rate of 10%?
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Q. Gene Research, Inc. just finished a 4-year R&D and clinical trials successfully and expects a quick approval from the Food and Drug
Administration. If the company markets the product on their own, it requires $30 million immediately (n ⇓ = ⇓ 0) to build a new manufacturing facility, and it is expected to have a 10 year product life.
The R&D expenditure in the previous years and the anticipated revenues that the company can generate over the next 10 years is summarized as follows:Merck, a large drug company is interested in purchasing the R&D project and the right to commercialize the product from Gene Research, Inc., immediately (n□ =□ 0). What would be a starting negotiating price for the project from Merck? Assume that
Gene’s MARR ⇓ = 20%.
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Q. Which of the following statements is correct?
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Q. Which of the following statements is correct?
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