Engineering Economics & Contract Management Flashcards
7 cards from real CPE practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Engineering Economics & Contract Management flashcards as text
A contract clause stating that no oral modifications are valid is known as a:
Answer: Integration clause
An integration (or merger) clause specifies that the written contract represents the complete agreement and cannot be modified by prior or contemporaneous oral statements.
Which economic concept explains why $1 received today is worth more than $1 received in the future?
Answer: Time value of money
The time value of money reflects that money available now can be invested to earn returns, making it worth more than an equivalent future sum.
In competitive bidding, a bid bond typically guarantees that:
Answer: The contractor will enter into a contract if selected
A bid bond guarantees that the successful bidder will enter into a contract at the submitted bid price and provide required performance bonds.
An economic analysis comparing alternatives with different useful lives should use:
Answer: Annual Worth (AW) method or Least Common Multiple of lives
Comparing alternatives with unequal lives requires either the Annual Worth method or analysis over the Least Common Multiple period to ensure a fair comparison.
Under the American Institute of Architects (AIA) A201 General Conditions, a 'Change Order' requires agreement from:
Answer: Owner, contractor, and architect
AIA A201 defines a Change Order as a written instrument signed by the Owner, Contractor, and Architect agreeing to a change in the Work.
The double-declining balance (DDB) depreciation method produces:
Answer: Higher depreciation in early years, lower in later years
DDB is an accelerated depreciation method that applies twice the straight-line rate to the declining book value, resulting in larger charges in earlier years.
Which document typically establishes the contractor's obligation to protect third parties from project-related harm?
Answer: General liability insurance certificate
A general liability insurance certificate demonstrates the contractor carries coverage for bodily injury and property damage to third parties during construction.