FE Exam prep- Ethics & Economics

Ethics

10 Obligations to the Public

#1. First and foremost responsibility is to safeguard ___,___ , and ___ of the public

health, safety, and welfare

#2. Lincensee shall approve...

only those plans, survey, and other documents that conform to the accepted engineering and surveying standards and that safeguard the health, safety, and welfare of public.

#3. Licensee shall notify...

their employer or client and such other authority as may be appropriate when their professional judgement is overruled when health safety or welfare of public is endangered.

#4. Licensees shall to the best of their knowledge...

include all relevant and pertinent information in an objective and truthful manner within all professional documents, statements, and testimony.

#5. Licensees shall express...

a professional opinion publicly only when it is founded upon an adequate knowledge of the facts, and a competent evaluation of the subject matter.

#6. Licensees shall issue no...

statements, criticisms or arguments on engineering and surveying matters that are inspired of paid for by interested parties, unless they explicitly identify the interested parties on whose behalf they are speaking and reveal and interest they have.

#7. Licensees shall no partner or offer to....

practice with person or firm that they know is engaged in fraudulent or dishonest business or professional practices.

#8. Licensees who have knowledge or reason to believe that an person or firm has violated any rules or laws applying to the practice of engineering

shall report to the board, may report it to appropriate legal authorities.

#9. Licensees shall not knowingly provide false or incomplete information regarding....

an applicant in obtaining licensure.

#10. Licensees shall comply with the...

licensing laws and rules governing their professional practice in each of the jurisdictions in which they practice.

What entity has their own code of ethics for professional engineers.

The state.

Who provides model rules that the state may adopt the as their code of ethics.

NCEES

What are laws?

Laws are rules that must be followed by society and, in some cases, by subsets of society. Not following laws will result in a penalty being paid to society in general, to a small section of society, or in some cases, both. laws are established by governments, including the courts, and generally serve society as a whole.

Difference between laws and ethics?

Laws are obligations we owe to society. Ethics are obligations we owe to our fellow engineers.

Which entity takes precedence in an ethical conflict?

Society

What is the definition of tort?

A civil wrong committed by one person causing damage to another person or property. There may be injury or damage.

Tort law deals with what?

compensation

What is the definition of negligence?

An action willful or unwilful that is taken without "proper care of consideration" for safety resulting in damages to property or injury to persons

Design Liability

Design professionals are generally consultants who provide a service. The professionals are expected to meet a standard of care.

Manufacturing Liability

Law is much stricter, and perfection is expected.

Professional Liability

Injured party can sue for damages as well as for specific performance

What are two ways engineers can protect themselves in case of potential exposure for professional liability?

1. Purchase liability insurance

2. Create and properly establish and maintain a corporation, limited liability, or other legal entity under which you conduct your engineering practice.

Economics

Which three things are shown on cash flow diagrams?

Time interval, all cash outflow, and inflow.

Not only are interest rates compounded yearly, but they can also be compounded...

quarterly, monthly, weekly, and daily.

What is compound interest?

Concept of adding accumulated interest back to the principal.

Another term for annual percentage rate is...

Nominal Rate

What is inflation?

Increase in the amount of money required to purchase the same amount of goods or services over time.

What is uniform gradient amount per interest period?

It is like annual compounding, but it is growing at a constant rate every year.

What is engineering economics?

The application of economic principles to engineering problems, for example in comparing the relative costs of two alternative capital projects.

Is direct labor considered a fixed cost?

No, direct labor is variable cost, due to production level, workforce size, and other parameters.

What is a "fixed cost"?

Does not vary with production, such as plant and equipment costs.

What is an "incremental cost"?

Incremental costs vary with production, such as material and labor.

What is a "sunk cost"?

A cost already incurred that is not subject to variation or revision and that is usually represented by a fixed asset purchased and in use

What is the equation for a Cost (C)- Benefit (B) analysis?

B/C > 1

What is the definition of "Minimum Attractive Rate of Return" (MARR) ?

A project is not economically viable unless it is expected to return at least the MARR.

What is "Break Even Analysis"?

A method of determining when the value of one alternative becomes equal to the value of another.

In a "break even analysis", the best alternative is the one that...

Has the lowest cost.

The evaluation criterion that is usually used in an economic analysis is...

Financial units.

The equation for expected value (EV) is...

EV = (c1)(p1) + (c2)(p2)+...

What is the purpose of a "decision tree"?

Break down large, complicated problems into a series of smaller simpler problems. They also enable objective analysis and decision making.

What is "Straight-Line Depreciation"?

Estimating salvage value to know how much to expense during increments over that period.

The equation for straight-line depreciation is...

Dj = (C -Sn)/n

What is the "Modified Accelerated Cost Recovery System" (MACRS)?

The current tax depreciation system in the U.S. The system recovers capital cost of tangible property over a specified life by annual deductions.

The equation for MACRS is...

Dj = (factor)C

What is "Book Value" (BV)?

Is the original cost basis of an asset. The equation for BV is...

BV = initial cost - accumulated depreciation

How is salvage value determined in an engineering economics problem?

It is determined in future dollars.