Ethics, Professional Practice, and Engineering Economics
Professional practice questions test judgment under the NCEES Model Rules, where the engineer's first obligation is public health, safety, and welfare. Economics questions test whether you can compare alternatives on a consistent time basis.
Core rules
- Licensure is jurisdiction-specific. The PE seal is applied only to work you prepared or directly supervised, within your demonstrated competence.
- Conflicts of interest must be disclosed and avoided. Gifts or payments that could influence judgment are prohibited. Client information stays confidential unless law or public safety requires disclosure.
- Known violations are reported to the appropriate authority; the public interest comes before the client relationship.
- Economic equivalence: F = P(1+i)^n; P = A[(1+i)^n − 1]/[i(1+i)^n]; A = P[i(1+i)^n]/[(1+i)^n − 1].
- Effective annual rate: i_eff = (1 + r/m)^m − 1. Compare alternatives by present, annual, or future worth at MARR; use incremental analysis for mutually exclusive options.
Worked example
A $10,000 per year benefit lasting 5 years at 8%: (P/A, 8%, 5) = (1.08⁵ − 1)/(0.08 × 1.08⁵) = 3.9927, so PW = $39,927. A competing option with a $38,000 first cost and negligible annual cost is cheaper on a present-worth basis.
Traps
- Subtracting a sunk cost from a new alternative; sunk costs are irrelevant.
- Discounting inflated cash flows with a real, inflation-free rate.
- Comparing alternatives with unequal lives without converting to annual worth.
- Sealing drawings outside your discipline, or accepting a gift that creates an obligation.