FE Industrial and Systems Engineering Economics Practice Problems

The current FE Industrial and Systems specification assigns 9-14 of the 110 exam questions to Engineering Economics. Form A contains 10 original problems in this area. The sample below is published in full, with the same worked-solution format used throughout the book.

Free sample problem

A project receives 25,000 USD at each year-end for four years. At 6%, present worth is most nearly:

(A)21657 USD
(B)43314 USD
(C)64971 USD
(D)86628 USD

Show worked solution

Answer: (D)

The four-payment present worth is about 86,628 USD.

The cash flows and costs are placed on the requested economic basis.

P = A \frac{1 - ( 1 + i ) ^{- n}}{i}

Substitution and unit reduction give the reported value.

P = 25000 \frac{1 - 1.0 6 ^{- 4}}{0.06} = 86628

FE Reference Handbook — Engineering Economics: Present Worth

Why the other choices appear

(A)This introduces an extra factor of 0.25 that is not present in the governing relation.
(B)This value is 50% below the verified result; no stated conversion creates that change.
(C)The units are retained, but an unsupported 0.75 multiplier changes the requested magnitude.

The complete FE Industrial and Systems practice exam contains 10 problems in this area and 110 problems overall, with an answer key, full solutions, and a score sheet by knowledge area.

Free FE Industrial and Systems problems in the other knowledge areas

Mathematics · Engineering Sciences · Ethics and Professional Practice · Probability and Statistics · Modeling and Quantitative Analysis · Engineering Management · Manufacturing, Service, and Other Production Systems · Facilities and Supply Chain · Human Factors, Ergonomics, and Safety · Work Design · Quality · Systems Engineering, Analysis, and Design

Retaking this exam? The FE exam retake guide turns the NCEES diagnostic report into an area-by-area plan.