Engineering Economics - Elements (Exercise 4)

Using factor method. the depletion at any given year is equal to:

• Initial cost of property times number of unit sold during the year divided by the total units in property

• Initial cost of property divided by the number of units sold during the year

• Initial cost of property times number of units sold during the year

• Initial cost of property divided by the total units in property

What do you call the after-tax present worth of all depreciation effects over the depreciation period of the asset?

• Asset recovery

• Depreciation recovery

• Period recovery

• After-tax recovery

A mathematical expression also known as the present value of annuity of one is called ______ .

• Load factor

• Demand factor

• Sinking fund factor

• Present worth factor

The amount of property in which a willing buyer to a willing seller for the property when neither one is under the compulsion to buy nor to sell is called ______.

• Fair value

• Market value

• Good will value

• Book value

Salvage value is sometimes known as ______ .

• Scrap value

• Going value

• Junk value

• Second-hand value

What refers to the value of an asset which a disinterested third party. different from the buyer and seller, will determine in order to establish a price acceptable to both parties?

• Book value

• Market value

• Fair value

• Franchise value

What refers to the value of an intangible item which arises from the exclusive right of a company to provide a specified product and service in a certain region of the country?

• Company value

• Going value

• Goodwill value

• Franchise value

The first cost to be incurred if the piece of equipment now in place had been bought for a second hand dealer or some other business is called

• Material cost

• Fixed cost

• First cost

• In-place value

In computing depreciation of an equipment. which of the following represents the first cost? A. The original purchase price and freight charges

• Installation expenses

• Initial taxes and permit fees

• The original purchase price and freight charges

• All of these

The process of determining the value or worth of a physical property for specific reason is called

• Investment

• Valuation

• Economy

• Depletion