Susan Is Evaluating an Engineering Project

question 8

Multiple Choice

Susan is evaluating an engineering project. She assumes zero inflation for the duration of the project. With respect to this situation, which statement is consistent with the subject matter of engineering economics?

• A)A zero inflation assumption is always a good one.
• B)A zero inflation assumption is not realistic but it is better than assuming some uncertain inflation rate.
• C)A zero assumption is not a bad one for the base case, but then the project should be evaluated under different values in some range to see how inflation affects the project.
• D)Since in Canada inflation is low, it is possible to neglect it.
• E)The highest historical inflation rate must be chosen instead.

---

Definitions:

Budget Line

A graphical representation in economics showing all possible combinations of goods a consumer can buy with their income at given prices.

Punk Rock

Punk rock is a music genre that emerged in the mid-1970s, known for its fast tempos, short songs, hard-edged melodies, and political, anti-establishment lyrics.

Video Cassettes

Analog storage mediums used to record video and audio signals for playback on a compatible device.

Budget Line

A visual chart showing all the potential pairs of two items that can be bought within a specific budget at unchanged prices.