SET A a.

) SCIENCE, a term derived from Latin word scientia, is a systematized body of knowledge based on facts and events of life arranged according to order. It is a system of gaining knowledge based on a scientific method which has the following steps: unbiased observations, formulation of hypothesis, gathering of data, systematic experimentation, analysis of data and conclusion. It aims to give better understanding of current phenomena and a better ability to infer future events. It expresses general truths and principles to explain how things work. b.) ENGINEERING is an applied science. It aims to solve problems to improve the status quo. It can also be defined as the optimal conversion of the natural resources to products that will make for optimum and safe utilizations of humans. It solves problems not just by explaining but by actually designing and manufacturing products, engines and devices which will last for a long time and under a specification of safety. c.) PRESENT ECONOMY PROBLEMS There are many cases in engineering economy studies where interest is not a factor, these studies are frequently called present economy problems. Such studies usually involve the selection between alternative designs, materials, or methods. d.) RATE OF RETURN (ROR) METHOD The rate of return on the capital invested is given by the formula,

Rate of return is a measure of effectiveness of an investment of capital. It is a financial efficiency. When this method is used, it is necessary to decide whether the computed rate of return is sufficient to justify the investment. The advantage of this method is that it is easily understood by management and investors. The applications of the rate of return method is controlled by the following conditions. A single investment of capital at the beginning of the first year of the project life and identical revenue and cost data for each year. The capital invested is the total amount of capital investment required to finance the project, whether equity or borrowed. e.) PRESENT WORTH (PW) METHOD This pattern for economy studies is based on the concept of present worth. If the present worth. If the present worth of the net cash flows is equal to, or greater than, zero, the project is justified economically. The present worth method is flexible and can be used for any type of economy study. It is used extensively in making economy studies in the public works field, where long-lived structures are involved.

SET B f.) SCIENCE, a term derived from Latin word scientia, is a systematized body of knowledge based on facts and events of life arranged according to order. It is a system of gaining knowledge based on a scientific method which has the following steps: unbiased observations, formulation of hypothesis, gathering of data, systematic experimentation, analysis of data and conclusion. It aims to give better understanding of current phenomena and a better ability to infer future events. It expresses general truths and principles to explain how things work. g.) ENGINEERING is an applied science. It aims to solve problems to improve the status quo. It can also be defined as the optimal conversion of the natural resources to products that will make for optimum and safe utilizations of humans. It solves problems not just by explaining but by actually designing and manufacturing products, engines and devices which will last for a long time and under a specification of safety. h.) ANNUAL WORTH. In this method, interest on the original investment (sometimes called minimum required profit) is included as the cost. If the excess of annual cash inflows over annual cash out flows is not less than zero the proposed investment is justified is valid. This method is covered by the same limitations as the rate of return pattern a single initial investment of capital and uniform revenue and cost throughout the life of investment. i.) FUTURE WORTH. The future worth method for economy studies is exactly comparable to the present worth method except that all cash inflows and outflows are compounded forward to a reference point in time called the future. If the future worth of the net cash flows is equal to, or greater than, zero, the project is justified economically. j.) PAYBACK PERIOD. The payback period is commonly defined as the length of time required to recover the first cost of an investment from the net cash flow produced by that investment for an interest rate of zero Investment salvage value Payout period (years) = Net annual cash flow h.) ECONOMICS is the social science that deals with the production, distribution, and consumption of goods and services and with the theory and management of economies or economic systems. It is also the theories, principles, and models that deal with how the market process works. It attempts to explain how wealth is created and distributed in communities, how people allocate resources that are scarce and have many alternative uses, and other such matters that arise in dealing with human wants and their satisfaction.