Engg Economics Unit-2

The project contractor relies on the cost of the estimate

• (A) For submission of a competitive bid for a lump-sum contract

• (B) For a unit price contract

• (C) For preparation of a definitive estimate to help negotiate contract

• (D) All of these

A loan for P50,000 is to be paid in 3 years at the amount of P65,000. What is the effective rate of money?

• A. 9.01 %

• B. 9.14 %

• C. 9.31 %

• D. 9.41 %

If a seller recovers his capital along with accumulated compensating interest not in one single lump-sum payment but in periodical equal payments, over time:

• (A) Capital Recovery Annuity fs availed

• (B) Present work Annuity is availed

• (C) Sinking Fund Annuity is availed

• (D) Sinking Fund Annuity is availed

What is the effective rate corresponding to 18% compounded daily? Take 1 year is equal to 360 days.

• A. 19.61 %

• B. 19.44 %

• C. 19.31 %

• D. 19.72 %

Pick up the correct statement from the following:

• (A) An annuity is a series of equal payments occurring at equal period of time

  (

• B) Annuity is called an equal payment or uniform payment series

• (C) An annuity may have periods of time of any length but should always be of equal length

• (D) All the above

What rate of interest compounded annually is the same as the rate of interest of 8% compounded quarterly?

• A. 8.07 %

• B. 8.12 %

• C. 8.24 %

• D. 8.14 %

The sunk costs include:

• (A) A past expenditure

• (B) An unrecovered balance

• (C) An invested capital that cannot be retrieved

• (D) All of these

Which of these gives the lowest effective rate of interest?

• A. 12.35 % compounded annually

• B. 11.90 % compounded annually

• C. 12.20 % compounded annually

• D. 11.60 % compounded annually

Pick up the element of the cost from the following:

• (A) Direct material

• (B) Direct labour

• (C) Over head

• (D) All of these

An amount of P1,000 becomes P1,608.44 after 4 years compounded bimonthly. Find the nominal interest.

• A. 11.89 %

• B. 12.00 %

• C. 12.08 %

• D. 12.32 %