CPE Engineering Economics & Contract Management

Question 1

What is the primary focus of engineering economics?

Accepted Answer

Evaluate economic feasibility

Answer

Design engineering systems

Answer

Manage project schedules

Answer

Prepare contracts

Question 2

What is the purpose of a contract in engineering projects?

Accepted Answer

Defines terms and scope

Answer

Increases project costs

Answer

Delays project start

Answer

Limits team communication

Question 3

Which economic analysis technique compares alternatives based on costs and benefits?

Accepted Answer

Cost-benefit analysis

Answer

Schedule analysis

Answer

Risk analysis

Answer

Quality control

Question 4

What is the role of a performance bond in contracts?

Accepted Answer

Guarantees project completion

Answer

Increases costs

Answer

Limits communication

Answer

Delays payments

Question 5

Which term defines the total cost of owning and operating an asset?

Accepted Answer

Life cycle cost

Answer

Initial cost

Answer

Operational cost

Answer

Maintenance cost

Question 6

What is a fixed-price contract?

Accepted Answer

Price is fixed

Answer

Price varies with costs

Answer

Price depends on labor only

Answer

Price is negotiated monthly

Question 7

What is the purpose of contract change orders?

Accepted Answer

Document scope changes

Answer

Ignore project changes

Answer

Delay project approval

Answer

Reduce project budget

Question 8

Why is net present value (NPV) important in engineering economics?

Accepted Answer

Measures investment profitability

Answer

Calculates physical asset value

Answer

Estimates project duration

Answer

Tracks labor hours

Question 9

What is an important aspect of contract management?

Accepted Answer

Manage compliance and relationships

Answer

Increase contract length

Answer

Ignore contract terms

Answer

Delay contract signing