AALL10 · Chapter 10Project Planning & Implementation🏛️ Past Licensure QuestionID: 657f2274
In engineering economics, if a cash flow series increases or decreases by a constant monetary amount every consecutive year, what type of cash flow series is it called?
In engineering economics, if a cash flow series increases or decreases by a constant monetary amount every consecutive year, what type of cash flow series is it called?
Multiple Choice Options
- A
Geometric gradient series
- B✓ Correct Option
Gradient (Arithmetic gradient) series
- C
Uniform series
- D
Irregular series
Detailed Technical Solution & Explanation
An arithmetic gradient series (commonly termed simply a gradient series) is a cash flow sequence where payments increase or decrease by a constant amount each period (). If the cash flow changes by a constant percentage, it is a geometric gradient.
Option Analysis:
•
Option A (Geometric gradient series): Changes by a constant percentage rate each period.
•
Option B (Gradient (Arithmetic gradient) series): Correct. Changes by a fixed, constant numerical amount each period.
•
Option C (Uniform series): Payments remain identical () each period.
•
Option D (Irregular series): Payments change with no mathematical pattern.
Reference: Demo2 · Set 2NEC Licensure Syllabus