Engineering Economics and Financial Management Flashcards
6 cards from real BSE practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Engineering Economics and Financial Management flashcards as text
Which financial statement shows a company's assets, liabilities, and shareholders' equity at a specific point in time?
Answer: Balance Sheet
The balance sheet provides a snapshot of a company's financial position, listing what it owns (assets) and owes (liabilities) along with equity.
What is the break-even point in production?
Answer: The output level where total revenue equals total cost
The break-even point is the production quantity at which total revenue equals total costs, resulting in zero profit or loss.
Which ratio measures a company's ability to pay short-term obligations using its most liquid assets?
Answer: Quick Ratio
The quick ratio (also called the acid-test ratio) measures liquidity by comparing liquid assets (excluding inventory) to current liabilities.
What does a positive Net Present Value (NPV) indicate about a project?
Answer: The project is expected to add value to the firm
A positive NPV means the project's discounted cash inflows exceed its costs, indicating it is expected to increase the firm's value.
In life-cycle costing, which phase typically incurs the highest cumulative costs for an engineered system?
Answer: Operations and maintenance
Operations and maintenance costs typically dominate the total life-cycle cost of an engineered system, often far exceeding initial acquisition costs.
Which cost estimation technique uses the relationship between a new project's parameters and historical data from completed similar projects?
Answer: Parametric estimating
Parametric estimating uses statistical relationships between historical data and project variables (like cost per unit) to calculate estimates.