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Engineering Economy, 5/e

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

Rate of Return Analysis: Multiple Alternatives

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				When only one alternative is to be selected from multiple alternatives, the alternatives are said to be _____________.


2				In evaluating multiple independent alternatives, each alternative is compared against the _______________.


3				In evaluating mutually exclusive alternatives on the basis of rate of return, it is necessary to conduct a (an) __________ in order to obtain the same ranking as the PW and AW methods.


4				A tabulation of incremental cash flow between two different- life alternatives must be prepared over the ________________.


5				The rate of return calculated from an incremental analysis represents the rate of return obtainable _______________.

Answer choices for questions 1 through 5

A)	Every other alternative
B)	Over one life cycle of each alternative
C)	Specified study period
D)	On the extra investment of the higher initial cost alternative
E)	Do nothing alternative
F)	Incremental ROR analysis
G)	Independent
H)	Least common multiple of their lives
I)	Future worth
J)	Mutually exclusive

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