Chemical Engineering > GATE 2016 > Economics Terms

Contributed by: Dr. Sarah Chen

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Terms used in engineering economics have standard definitions and interpretations. Which one of the following statements is INCORRECT?

A

(A) The profitability measure ‘return on investment’ does not consider the time value of money

B

(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

(C) The ‘six-tenths factor rule’ is used to estimate the cost of an equipment from the cost of a similar equipment with a different capacity

D

(D) Payback period is calculated based on the payback time for the sum of the fixed and the working capital investment

Check Answer

Explanation

Correct : d

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