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Terms used in engineering economics have standard definitions and interpretations. Which one
of the following statements is INCORRECT?
  • a)
    The profitability measure ‘return on investment’ does not consider the time value of money
  • b)
    A cost index is an index value for a given time showing the cost at that time relative to a
    certain base time
  • c)
    The ‘six-tenths factor rule’ is used to estimate the cost of an equipment from the cost of
    similar equipment with a different capacity
  • d)
    The ‘six-tenths factor rule’ is used to estimate the cost of an equipment from the cost of
    similar equipment with a different capacity
Correct answer is option 'D'. Can you explain this answer?
Verified Answer
Terms used in engineering economics have standard definitions and inte...
Payback period is calculated based on the payback time to cover up the fixed capital investment
only. So, statement (D) is false.
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Most Upvoted Answer
Terms used in engineering economics have standard definitions and inte...
Of a project is the Net Present Value (NPV).
b)The discount rate is the rate used to calculate the present value of future cash flows.
c)The payback period is the time it takes for a project to recover its initial investment.
d)The internal rate of return (IRR) is the discount rate that makes the NPV of a project zero.
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Terms used in engineering economics have standard definitions and interpretations. Which oneof the following statements is INCORRECT?a)The profitability measure ‘return on investment’ does not consider the time value of moneyb)A cost index is an index value for a given time showing the cost at that time relative to acertain base timec)The ‘six-tenths factor rule’ is used to estimate the cost of an equipment from the cost ofsimilar equipment with a different capacityd)The ‘six-tenths factor rule’ is used to estimate the cost of an equipment from the cost ofsimilar equipment with a different capacityCorrect answer is option 'D'. Can you explain this answer?
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Terms used in engineering economics have standard definitions and interpretations. Which oneof the following statements is INCORRECT?a)The profitability measure ‘return on investment’ does not consider the time value of moneyb)A cost index is an index value for a given time showing the cost at that time relative to acertain base timec)The ‘six-tenths factor rule’ is used to estimate the cost of an equipment from the cost ofsimilar equipment with a different capacityd)The ‘six-tenths factor rule’ is used to estimate the cost of an equipment from the cost ofsimilar equipment with a different capacityCorrect answer is option 'D'. Can you explain this answer? for GATE 2024 is part of GATE preparation. The Question and answers have been prepared according to the GATE exam syllabus. Information about Terms used in engineering economics have standard definitions and interpretations. Which oneof the following statements is INCORRECT?a)The profitability measure ‘return on investment’ does not consider the time value of moneyb)A cost index is an index value for a given time showing the cost at that time relative to acertain base timec)The ‘six-tenths factor rule’ is used to estimate the cost of an equipment from the cost ofsimilar equipment with a different capacityd)The ‘six-tenths factor rule’ is used to estimate the cost of an equipment from the cost ofsimilar equipment with a different capacityCorrect answer is option 'D'. Can you explain this answer? covers all topics & solutions for GATE 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Terms used in engineering economics have standard definitions and interpretations. Which oneof the following statements is INCORRECT?a)The profitability measure ‘return on investment’ does not consider the time value of moneyb)A cost index is an index value for a given time showing the cost at that time relative to acertain base timec)The ‘six-tenths factor rule’ is used to estimate the cost of an equipment from the cost ofsimilar equipment with a different capacityd)The ‘six-tenths factor rule’ is used to estimate the cost of an equipment from the cost ofsimilar equipment with a different capacityCorrect answer is option 'D'. Can you explain this answer?.
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