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Engineering Economy, 5/e

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

Making Choices: The Method, MARR, and Multiple Attributes

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 LCM of lives is required to perform an analysis for different life assets for the following methods: __________________ .


2				One factor that makes the MARR vary from one time period or one project to another is ___________________________.


3				The percentage of debt and equity financing for a project or company is referred to as its ______________.


4				When equity financing is used for a project, ________are not income tax deductible.


5				One common source of debt capital is ___________________.


6				The U.S. Treasury Bill rate is used in the CAPM (capital asset pricing model) as the __________________.


7				For an alternative with a mixed source of financing, the MARR should initially be set ____________ the WACC.

Answer choices for questions 1 through 7

A)	Limited capital
B)	PW, AW, and ROR
C)	Higher than
D)	MARR
E)	WACC
F)	AW and B/C
G)	Lower than
H)	Stock dividends
I)	Risk-free return
J)	Life cycle costs
K)	Interest payments
L)	Bonds
M)	Cash flows
N)	Common stock
O)	Volatility index
P)	Equal to
Q)	Dept-equity mix
R)	PW, ROR, and B/C

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