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EEC Quiz-2

Total questions: 20

Worksheet time: 20mins

Name
Class
Date
1.

Which of the following factors is used to find future value of an annuity?

a)

A/F,i,n

b)

F/A,i,n

c)

A/P,i,n

d)

P/A,i,n

2.

The effective interest is highest in which of the following cases.

a)

Interest compounded annually

b)

Interest compounded semiannually

c)

Interest compounded quarterly

d)

Interest compounded continuously

3.

Which of the following conditions must be satisfied in order to accept a public project?

a)

B/C Ratio>0

b)

B/C Ratio>1

c)

Both of the above

d)

None

4.

An asset involves annual revenue of Rs 50,000 starting from the end of 2nd year. What type of cash flow it's named?

a)

Deferred annuity

b)

Annuity due

c)

Arithmetic gradient series

d)

None

5.

An asset is purchased for Rs 7,00,000 and net annual revenue is Rs 2,00,000. What will be the payback period at i = 10%.

a)

3 years 6 months

b)

More than 3 years 6 months

c)

Less than 3 years 6 months

d)

Can't be said

6.

What is the effective interest rate of a nominal interest rate of 20% compounded quarterly?

a)

20%

b)

21%

c)

21.5%

d)

21.55%

7.

A machine is purchased for Rs 1,00,000 with 10 years life and with no salvage value. What will be the book value of the machine at the end of 4th year using DB method of depreciation?

a)

Rs 40,960

b)

R 60,000

c)

Rs 40,000

d)

Rs 59,040

8.

A person would receive Rs 20,000 annually for EIGHT years starting from the end of 3rd year. How much will he deposit today if the deposit receives 10% interest?

a)

20,000 (P/A,10,7)(P/F,10,3)

b)

20,000 (F/A,10,8)

c)

20,000 (P/A,10,8)(P/F,10,2)

d)

20,000 (P/A,10,8)

9.

An asset has a purchase value of Rs 1,00,000, salvage value of Rs 10,000, and life of 9 years. How much will be the depreciation charge of the asset at the end of 3rd year using SYD method of depreciation ?

a)

Rs 10,000

b)

Rs 14,000

c)

Rs 6,000

d)

None

10.

How much should a person deposit today so that he would receive Rs 20,00,000 after 10 years at 12% interest compounded annually? (P/F12,10)=0.322, (A/F,12,10)=0.057, (A/P,12,10)=0.177

a)

Rs 1,14,000

b)

Rs 6,44,000

c)

Rs 3,54,000

d)

Rs 2,00,000

11.

A machine involves EIGHT annual O&M costs of Rs 10,000 starting from the end of 3rd year. What will be its EAC expression at i = 10%.

a)

10,000 (F/A,10,8)(A/F,10,10)

b)

10,000 (P/A,10,8)(P/F,10,2)(A/P,10,10)

c)

Both a and b

d)

Only a

12.

Which of the following is NOT TRUE?

a)

depreciation on assets reduce taxable income of business.

b)

Book value of an asset always decreases from 1st to last period.

c)

After tax cash flow (ATCFs) of an asset are more than its Before tax cash flow (btcfs)

d)

ATCF of an asset is less than its BTCF.

13.

The present worth (PW) of an asset at i = 15% is Rs 7,000.If MARR of the asset is 15%, which of the following is TRUE?

a)

select the asset

b)

reject the asset

c)

Can't be said

d)

Remain indifferent

14.

A person wants to know the equated monthly installment (EMI) of a loan (x) taken by him. If the loan period is n years and interest rate is i%, which of the following is the formula for the EMI?

a)

x (P/A,i,n)/12

b)

x (F/A,i,n)/12

c)

x (A/F,i,n)/12

d)

x (A/P,i,n)/12

15.

If equivalent annual worth (EAW) of a machine is Rs 5,000, which of the following is TRUE?

a)

present worth (PW) of machine is greater than its EAW

b)

future worth (FW) of machine is greater than its EAW

c)

Both a and b

d)

None

16.

TEN equal amount deposits starting from the end of 1st year accumulates to Rs 10,00,000 at 9% interest compounded annually. How much will be the annual deposits? (F/A,9,10)=15.193, (A/F,9,10)=0.066, (P/A,9,10) =6.418, (A/P,9,10)=0.156

a)

Rs 1,51,930

b)

Rs 66,000

c)

Rs 64,180

d)

Rs 1,56,000

17.

What is break-even sales of a firm if Sales=Rs 1,00,000, Fixed cost=Rs 80,000, and Variable costs=Rs 60,000

a)

Rs 4,00,000

b)

Rs 2,00,000

c)

Rs 40,000

d)

None of the above

18.

Fixed cost=Rs 1,40,000

P/V Ratio=35%

How much sales would yield a profit of Rs 28,000

a)

Rs 77,000

b)

Rs 3,20,000

c)

Rs 4,80,000

d)

Rs 4,28,000

19.

Which of the following is NOT TRUE?

a)

BE sales = Fixed cost/contribution

b)

BE Quantity = Fixed cost/contribution

c)

BE sales = Fixed cost /(P/V Ratio)

d)

None

20.

The excess of sales over break-even sales is

a)

P/V Ratio

b)

Margin of safety

c)

Contribution

d)

Angle of incidence