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WorksheetsEngineering Economics - Elements (Exercise 3)
Total questions: 25
Worksheet time: 13mins
What refers to a document that shows proof of legal ownership of a financial security?
Bond
Bank note
Coupon
Check
What type of bond is issued jointly by two or more corporations?
Mortgage bond
Joint bond
Tie-up bond
Trust bond
What type of bond whose guaranty is in lien on railroad equipment, such as freight and passenger cars. locomotives, etc.?
Railroad bond
Equipment obligation bond
Equipment bond
Equipment trust bond
A type of bond to which are attached coupons indicating the interest due and the date when such interest is to be paid is called
Registered bond
Coupon bond
Mortgage bond
Collateral trust bond
What bond whose security is a mortgage on certain specified assets of the corporation?
Registered bond
Collateral trust bond
Mortgage bond
Debenture bond
A bond without any security behind them except a promise to pay by the issuing corporation is called
Joint bond
Debenture bond
Trust bond
Common bond
A type of bond where the corporation pledges securities which it owns such as the stock or bonds of one of its subsidiaries.
Mortgage bond
Joint bond
Security bond
Collateral trust bond
What type of bond where the corporation's owner name are recorded and the interest is paid periodically to the owners with their asking for it?
Preferred bond
Registered bond
Incorporators bond
Callable bond
What type of bond which can be redeemed before maturity date?
Preferred bond
Registered bond
Incorporators bond
Callable bond
What is the feature of some bonds whereby the issuer can redeem it before it matures?
Return clause
Callability
Recall clause
Callclass
The price at which the callable bond will be redeemed from the bondholder is called ______ .
Par value
Call value
Face value
Redemption value
What is defined as the reduction or fall of the value of an asset due to constant use and passage of time?
Depletion
Inflation
Depreciation
Deflation
In what method of computing depreciation where it assumes that the loss in value is directly proportional to the age of the equipment or asset?
Straight line method
Sinking fund method
Sum-of-year digit method
Declining balance method
In what method of computing depreciation where it assumes that a sinking fund is established in which funds will accumulate for replacement purposes?
Straight line method
Sinking fund method
Sum-of-year digit method
Declining balance method
In what method of computing depreciation where it assumes that the annual cost of depreciation is a fixed percentage of the book value at the beginning of the year?
Straight line method
Sinking fund method
Sum-of-year digit method
Declining balance method
In SYD method of computing depreciation, which of the following is the formula in finding the sum of years’ digits?
n (n-1)
[n (n +2)]/2
[n (n - 1)]/2
[n(n + 1)]/2
The declining balance method is also known as ______.
Double percentage method
Constant percentage method
Modified sinking fund method
Modified SYD method
What type of depreciation is due to the reduction in the demand for the function that the equipment or asset was designed to render?
Functional depreciation
Design depreciation
Physical depreciation
Demand depreciation
What type of depreciation is due to the reduction of the physical ability of an equipment or asset to produce results?
Functional depreciation
Design depreciation
Physical depreciation
Demand depreciation
The functional depreciation is sometimes called ______ .
Demand depreciation
Adolescence
Life depreciation
Failure depreciation
What is defined as the reduction of the value of certain natural resources such as mines, oil, timber, quarries. etc. due to the gradual extraction of its contents?
Depletion
Inflation
Depreciation
Deflation
What are the common methods of computing depletion charge?
Rational method and irrational method
Conservative method and conventional method
Unit method and percentage method
Discrete method and depletion allowance method
Under the depletion allowance method in computing depreciation. the depletion charge is equal to either ______ whichever is smaller.
Fixed percentage of gross income or the net taxable income
Fixed percentage of gross income or 50% of the net taxable income
50% of the fixed percentage of gross income or 50% of the net taxable income
50% of the fixed percentage of gross income or the net taxable income
The depletion allowance method of computing depletion is commonly known as ______ .
Unit method
Percentage method
Factor method
Sinking fund method
What is another term for “unit method” for computing depletion?
Initial cost method
Percentage method
Factor method
Sinking fund method
