Economic Evaluation Questions, Written Questions, Multiple Choice Questions

Section 1: Economic Evaluation Questions

Section 1: Economic Evaluation Questions

1.Solve Problem 3.1 (Chapter 3. See page 343) but use a construction interest rate of 12% and a 30-year bond rate of 10%.

2.Determine the equivalent annual cost for a piece of equipment with an estimated ten year life having an initial cost of $30,000, and an estimated salvage value in ten years of $10,000. The minimum ROR is 15% per year.

Section 2: Written Questions

1.What are the differences between reconnaissance and feasibility studies?

2.Compare and contrast the A+B and design-bid-build contracting methods.

3.What is the difference between a project which requires benefit-cost analysis and one which does not?

4.Define the following:
a.Infrastructure
b.Sustainability
c.Stakeholders

Section 3: Multiple Choice Questions

Answer the following multiple choice questions:

Chapter 1: 
1. With respect to the practice of infrastructure planning,
a.planning approaches involve design, with much less interest in operation.
b.non-engineers have always had an important role in planning teams.
c.engineers generally distinguish between the terms “planning” and “design.” 

2. With respect to the federal requirements for formal environmental assessments,
a.they originated with the Flood Control Act of 1936.
b.they originated with the National Environmental Policy Act of 1969.
c.most federal agencies have had extensive protocols in place since about 1950.

3. The National Environmental Policy Act of 1969 requires an EIS for:
a.every federal project.
b.every local infrastructure project receiving federal monies.
c.every federal project having a significant environmental impact.

4. With respect to the issues of sustainability and environmental economics,
a.they were emphasized first in the U.S and later  adopted as issues for developing countries by the World Bank and the United Nations.
b.much of the basic research for these issues has been carried out by the World Bank and other agencies dealing with the developing countries.
c.sustainability and environmental economics are essentially the same concepts.

5. As a percentage of GDP (or GNP) for infrastructure spending in the United States, 
a.expenditures are much higher than in other countries.
b.the proportion for capital spending has decreased, while the portion for non-capital spending has increased.
c.expenditures as a percent of GDP have generally increased over the last 50 years.

Chapter 2: 
6.  Benefit-cost analyses
a. are carried out in terms of market values
b. are carried out in terms of societal values
c. the choice of market or societal values is decided before starting the analyses.

7. With respect to benefit-cost analyses, 
a. major federal infrastructure projects are undertaken without showing that economic
    benefits exceed costs.
b. most line operating agencies include benefit-cost analyses in their programming
    and budgeting process. 
c. neither of the above is true. 

Section 2: Written Questions

8. The report on National Research Council 1995 studies
a. focuses on municipal systems.
b. focuses on performance-based criteria
c. both of the above.

Chapter 3: 
9. The level of detail of the drawings for a feasibility report is:
a. between that for a preliminary report and the contract documents.
b. essentially at the same level as the contract documents.
c. enough for making a very approximate cost estimate.

10. Unless otherwise controlled by law, the best proposal (tender, bid) by a contractor:
a. is the offer with the lowest price
b. is the offer by the contractor with the best reputation.
c. is the offer ranked first based on price and other factors.

11. In the formulation of a project at a site, the planner should:
a. always try to develop the site to its maximum capacity.
b. focus on meeting needs, solving problems, and identifying other opportunities. 
c. consult with environmental specialists when the plan is final.
. 
Chapter 4: 
12.  With respect to proposals from construction contractors:
a. the terms “proposal,” “tender,” and “bid” refer to different types of offers.
b. the contractor may usually propose alternative construction methods.
c. any contractor is eligible to bid as long as a construction bond is available.

13. For major projects, planners should form advisory panels of stakeholders:
a. to assist the planners from the early stages of the planning.
b. at about the midpoint of the process when the alternatives are well defined.
c. as soon as the environmental and social impacts for have been identified. 

14. Most planners consider the input of their stakeholder panels to be:
a. needed primarily because of legal requirements.
b. useful in identifying problems and gaining support for a project.
c. very limited in the skills they bring to the planning process.

15. In a screening process for a major project (e.g. bridge rehab or replacement):
a. the goals and objectives should be defined before the alternatives are defined. 
b. if the goals and objectives are well defined, the best alternatives are obvious.
c. stakeholder panels are useful for selecting goals and objectives, but not for discriminating among the alternatives. 

16. When considering alternative projects previously identified:
a. cost estimates are updated and other adjustments are made.
b. cost estimates are usually accepted if they are available.
c. only non-monetary features need to be considered.

17. When preparing data for alternative sizes of projects for a systems analysis:
a. data for three levels of development are generally appropriate.
b. data for maximum and minimum development are adequate.
c. data for a single optimal level is emphasized. 

18. The terms “master,” “comprehensive,” and “integrated” when applied to plans:
a. are different words that often describe similar types of plans.
b. are applicable only to projects with very detailed drawings.
c. refer only to multi-purpose plans. 

19. The term “comprehensive regional plan” refers to a plan that:
a. defines the physical characteristics of projects.
b. defines the physical characteristics and costs of projects.
c. defines the characteristics and costs plus recommended priorities.

20. An Executive Summary of a typical planning report:
a. goes at the beginning of the report.
b. goes at the end of the report.
c. is not needed if there is a good conclusions chapter at the end of the report.

Section 1: Economic Evaluation Questions

Problem 3.1

a)

Calculation of Investment Cost for each controlled river discharge
Particulars	Levee Ht (m) 2	Levee Ht (m) 4	Levee Ht (m) 6	Levee Ht (m) 8
Construction Cost	$3,000,000.00	$12,000,000.00	$27,000,000.00	$60,000,000.00
Amount borrowed per year	$750,000.00	$3,000,000.00	$6,750,000.00	$15,000,000.00
Interest rate per year	12%	12%	12%	12%
Interest amount in the 1 year	$90,000.00	$360,000.00	$810,000.00	$1,800,000.00
Interest amount in the 2 year	$180,000.00	$720,000.00	$1,620,000.00	$3,600,000.00
Interest amount in the 3 year	$360,000.00	$1,440,000.00	$3,240,000.00	$7,200,000.00
Interest amount in the 4 year	$720,000.00	$2,880,000.00	$6,480,000.00	$14,400,000.00
Total Investment cost	$1,350,000.00	$5,400,000.00	$12,150,000.00	$27,000,000.00

b)

Calculation of Investment Cost for each controlled river discharge
Particulars	Levee Ht (m) 2	Levee Ht (m) 4	Levee Ht (m) 6	Levee Ht (m) 8
Construction Cost	$3,000,000.00	$12,000,000.00	$27,000,000.00	$60,000,000.00
Investment cost	$1,350,000.00	$5,400,000.00	$12,150,000.00	$27,000,000.00
Total cost	$4,350,000.00	$17,400,000.00	$39,150,000.00	$87,000,000.00
PV Annuity factor	9.426914467	9.426914467	9.426914467	9.426914467
Cost per year	$461,444.73	$1,845,778.92	$4,153,002.57	$9,228,894.60
OMR cost	$16,000.00	$34,000.00	$64,000.00	$130,000.00
Equivalent Annual Cost per year	$477,444.73	$1,879,778.92	$4,217,002.57	$9,358,894.60

2.

Calculation of Equivalent Annual Cost
Particulars	Amount
Initial Cost	$30,000.00
Salvage Value after 10 years	$10,000.00
Net present salvage value	$2,471.85
Net Initial Cost of Investment	$27,528.15
Present value of Annuity factor	5.0187686
Equivalent Annual cost	$5,485.04

Answer to question 1:

The word “reconnaissance” is majorly use by the armed forces for the monitoring activity. In this context the word reconnaissance denotes that the current scenarios. In the planning process, the planner needs to assess the current environment of the objectives and they cruciate monitor the components that they have to arrange so that the goals are attained. Further this is not only limited to monitoring rather this also scrutinise the possibilities and threats that might affect the planning procedure (Belle, 2017).

Whereas the feasibility study determines the viability on an idea. Moreover, it is the comparison of the plan with the justifiable legal, economic and technical forces. Which are necessary to be hold in consideration for the proper execution of the project. In the common sense, the words reconnaissance and feasibility are different on the projection of them. One is utilised before planning and the other one is after planning (Ashworth & Perera, 2018).

 The A+B bidding contracts are commonly address as the cost plus time bidding. Form the definition it is clearly ascertainable that the bided contacts contains two components

• A-  The cost of the bid ( investment)
• B= The time requirement to complete the project

In this type of project, the bidder must have made proper estimation of time and cost. Moreover, the contractor will focus on the effectiveness in the project execution.

Design-bid-build contracting means the designing, bidding and building process contracting. This is the traditional method of contacting which differentiated agency or the contractor will create. Every contractor is liable for different parts of the project like construction drawings, technical specification and others (Smol et al., 2015).

Both the study elaborates the methods of contracting. A+B method denoted the cost and time requirement but the design-bid-build contracting signifies and deliver every part of designing of the project.

In the project determination cost, benefit analysis is a significant part for the determination of benefits if the alternative option is used. This means the benefits, which will be enjoyable if the alternative process is utilised in the project. The strengths and the weaknesses are note down by this analysis. Furthermore all the projects requires the cost benefit analysis except where there is no alternative sources to evaluate or compare is available or the management has the confidence on the project or the project is new in the market and no substitute is available in that time (Zhou et al., 2015).

Infrastructure:  it is the term, which is use to elaborate the structure of anything. The process, systems, workflows and other alternative are evaluate to determine the strengths of an entity, business, projects or planning procedure. The word infrastructure is use as the fundamental facility that needs to be deliver for the success of the project. The overall work procedure depends on the structural components, and this structural components are evaluated by the infrastructure (Fulford & Standing, 2014).

Sustainability: The word denotes the sustention ability. Which means the adopted procedure is eligible to provide the desired needs in the current situation, and the will be able to deliver the future needs (Goffee & Scase, 2015). In business environment the Sustainability means that the business is generating profits and contributing in the economy for a long period.

Chapter 1:

Question 1:

1. C) Engineers generally distinguish between the terms “planning” and “design

Question 2:

b) they originated with the National Environmental Policy Act of 1969.

Question 3:

1. c) every federal project having a significant environmental impact.

Question 4:

1. a) they were emphasized first in the U.S and later adopted as issues for developing countries by the World Bank and the United Nations

Question 5:

1. b) the proportion for capital spending has decreased, while the portion for non-capital spending has increased

Chapter 2:

Question 6:

1. c) the choice of market or societal values is decided before starting the analyses.

Question 7:

1. b) most line operating agencies include benefit-cost analyses in their programming and budgeting process

Question 8:

b focuses on performance-based criteria

Chapter 3:

Question 9:

1. b) essentially at the same level as the contract documents

Question 10:

1. c) is the offer ranked first based on price and other factors.

Question 11:

1. c) consult with environmental specialists when the plan is final

Chapter 4:

Question 12:

1. a) the terms “proposal,” “tender,” and “bid” refer to different types of offers

Question 13:

1. c) as soon as the environmental and social impacts for have been identified.

Question 14:

1. b) useful in identifying problems and gaining support for a project

Question 15:

1. c) stakeholder panels are useful for selecting goals and objectives, but not for Discriminating among the alternatives.

Question 16:

1. c) only non-monetary features need to be considered.

Question 17:

1. a) data for three levels of development are generally appropriate

Question 18:

1. a) are different words that often describe similar types of plans.

Question 19:

1. c) defines the characteristics and costs plus recommended priorities.

Question 20:

1. b) Goes at the end of the report

Ashworth, A., & Perera, S. (2018). Contractual procedures in the construction industry. Routledge.

Belle, I. (2017). The architecture, engineering and construction industry and blockchain technology. Digital Culture, 279-284.

Fulford, R., & Standing, C. (2014). Construction industry productivity and the potential for collaborative practice. International Journal of Project Management, 32(2), 315-326.

Goffee, R., & Scase, R. (2015). The Entrepreneurial Middle Class (Routledge Revivals). Routledge.

Smol, M., Kulczycka, J., Henclik, A., Gorazda, K., & Wzorek, Z. (2015). The possible use of sewage sludge ash (SSA) in the construction industry as a way towards a circular economy. Journal of Cleaner Production, 95, 45-54.

Zhou, Z., Goh, Y. M., & Li, Q. (2015). Overview and analysis of safety management studies in the construction industry. Safety science, 72, 337-350.