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ENGINEERING ECONOMICS

Total questions: 123

Worksheet time: 1hrs 2mins

Name
Class
Date
1.

What is defined as the interest on a load or principal that is based only on the original amount of the loan or principal?


a)

Effective rate of interest


b)

Nominal rate of Interest


c)

Compound interest

d)

Simple interest

2.

What is defined as a financial security note Issued by business or corporation and by the government as a means of borrowing long-term fund?


a)

T-bills 

c)

Securities

d)

Bank notes

3.

The term used to express the series of uniform payments occurring at equal interval of time ls


a)

compound interest

b)

annuity

c)

perpetuity

d)

depreciation

4.

Which of the following is an accelerated depreciation method?


a)

Straight line method and sinking fund method

b)

Straight line method and double decining balance method

c)

Double declining balance method and SYD method

d)

SYD method and sinking fund method

5.

Gross margin is the ratio of the gross profit to        


a)

Net sale     

b)

Owner's equity

c)

Inventory turnover

d)

Quick assets

6.

The difference between the present worth and the worth at some future time is


b)

profit  

d)

debit

7.

What is the ratio of the market price per share to earnings per share called?


a)

ross margin

b)

Price earnings ratio

c)

Book value per share of common stock

d)

Inventory turnover

8.

As applied to capitalized asset, the distribution of the initial cost by periodic changes to operation as in depreciation or the reduction of the depth by either periodic or irregular prearranged program is called


a)

Amortization      

b)

annuity

c)

depreciation

d)

capital recovery

9.

The ratio of the Interest payment to the principal for a given unit of time and is usually expressed as a percentage of the principal Is known as:


a)

investment

b)

nominal test

c)

Interest

d)

interest rate

10.

The true value of interest rate computed by equations for compound interest for a 1 year period is known as       


a)

Expected return

b)

Nominal interest

c)

Effective interest

d)

Economic return

11.

Cash money and credit necessary to establish and operate an enterprise are generally called ______.

a)

Capital

b)

Funds

c)

Assets

d)

Liabilities

12.

What is another term for "acid-test ratio"?

a)

Current ratio

b)

Profit margin ratio

c)

Quick ratio

d)

Price-earnings ratio

13.

Funds supplied by others on which a fixed rate of interest must be paid and
the debt be repaid at a specific place and time

a)

discount

b)

cash flow

c)

working capital

d)

borrowed capital

14.

What do you call any particular raw material or primary

product such as cloth, wool, flour, coffee, etc.?

a)

Utility

b)

Commodity

c)

Necessity

d)

Stock

15.

Which Is NOT an essential element of an ordinary annuity?

a)

The amounts of all payments are equal.

b)

The payments are made at equal Interval of time.

c)

The first payment is made at the beginning of each period.

d)

Compound Interest is paid on all amounts in the annuity.

16.

Consists of the actual counting or determination of the

actual quantity of the materials on hand as of a given date.

a)

Physical Inventory

b)

Material update

c)

Technological assessment

d)

Material count

17.

Under ordinary simple interest, how many days in one year?

a)

300

b)

365

c)

360

d)

366

18.

An equipment which cost $200,000 has a useful life of 8

years with a salvage value of $25,000 at the end of Its useful

life. If the depreciation at the first year us $21,875,what

method is used in the calculation of depreciation?

a)

Straight line

b)

Declining balance

c)

Sinking fund

d)

Sum of Years Diglt

19.

What is defined as the reduction or fall of the value of an

asset due to constant use and passage of time?

a)

Depletion

b)

Depreciation

c)

Inflation

d)

Deflation

20.

The suspension of repayment of debt or interest for a

specified period of time is called

a)

Moratorium

b)

Numeraire

c)

Escrow

d)

Porcupine

21.

What is an accelerated depreciation method?

a)

It is one that calculates a depreciation amount greater than

a straight line amount

b)

It is one that calculates a depredation amount lesser than

a straight line amount

c)

It is one that calculates a depredation amount equal to

straight line amount

d)

It is one that calculates a deprecation not in any way

related to straight line amount

22.

The discount of one unit of principal for one unit of time.

a)

Rate discount

b)

Nominal discount

c)

Actual discount

d)

Sales discount

23.

The profit derived from a project or business enterprise without consideration of obligations to financial contributors and claims of others based on profit is known


a)

yield

b)

earning value

c)

economic return

d)

expected yield

24.

Duopoly is a market situation where there is/are:

a)

Few sellers and few buyers

b)

Few sellers and many buyers

c)

Many sellers and few buyers

d)

One seller and few buyers

25.

A fund into which annual deposits of A are made in order to

accumulate fund F at n years in the future

a)

amortization

b)

depreciation

c)

annuity

d)

sinking fund

26.

Which one of the following is NOT a method of depredating

plant equipment for accounting and engineering economics

purposes?

a)

double-entry method

b)

modified accelerated cost recovery system

c)

sum-of-years digits method

d)

straight-line method

27.

A bond where the security behind it are the equipment of the

issuing corporation.

a)

Debenture

b)

Collateral

d)

Lien

28.

In the formula, P= (1 + i)^n, the factor is (1+i)^n is called the

a)

Sinking fund factor

b)

Single payment present worth factor

c)

Single payment compound amount factor

d)

Capital recovery factor

29.

A series of uniform accounts over an Infinite period of time.

a)

Depredation

b)

Perpetuity

c)

Annuity

d)

Innation

30.

Return on Investment ratio is the ratio of the:

a)

Net Income to owner's equity

b)

Market price per share to earnings per share

c)

Cost of goods sold to average cost of Inventory at hand

d)

Net credit sales to average net receivable

31.

The decrease in the value of a certain property due

to the gradual extraction of Its content is called

a)

depreciation

b)

declining balance

c)

scrap value

d)

depletion

32.

32.Additional information of prospective bidders on

contract documents issued prior to bidding date.

a)

Delict

b)

Escalatory

c)

Technological assessment

d)

Bid bulletin

33.

You are planning to buy stocks in a high growth

company. Which of the following ratios best indicates

the company's growth potential?

a)

Total asset tum-over ratio

b)

Debt ratio

c)

Profit ratio

d)

Price-earning ratio

34.

Which of the following does NOT affect owner's equity?

a)

Dividends paid

b)

License to start operation

c)

Invested capital

d)

Expense to get license to start operation

35.

The flow back of profit plus depredation from a given project

is called

a)

Capital recovery

b)

Cash flow

c)

Economic return

d)

Earning value

36.

The actual Interest earned by a given principal is known as?

a)

Compounded Interest

b)

Simple Interest

c)

Nominal Interest

d)

Effective Interest

37.

What refers to the need, want or desire for a product backed

by the money to purchase it?

a)

Supply

b)

Demand

c)

Product

d)

Good

38.

The Interest rate at which the present worth of cash flow

on a project is zero, or the interest earned by an investment

a)

rate of return

b)

Nominal rate

c)

effective rate

d)

yield

39.

Type of bond whose security is a mortgage on certain

specified assets of the corporation.

a)

Registered bond

b)

Mortgage bond

c)

Collateral bond

d)

Debenture bond

40.

It Is the worth of the property which is equal to the original

cost less the amount which has been charged to depreciation.

a)

Scrap value

b)

Fair value

c)

Book value

d)

Userche

41.

Type of bond is issued jointly by two or more corporations.

a)

Mortgage bond

b)

Joint bond

c)

Tie-up bond

d)

Trust bond

42.

What refers to the present worth of the probable future

net earnings?

a)

Total fair value

b)

Total market value

c)

Going concem value

d)

Earning value

43.

An artificial being created by operation of law, having the

right of succession and the process, attributes and properties

expressly authorized by the law or incident to its existence.

a)

Corporation

c)

Partnership

d)

Organlzation

44.

44.What refers to the amount of money paid for the use of

borrowed capital?

a)

Interest

b)

Simple interest

c)

Rate of interest

d)

Principal

45.

.What denotes in the fall In the exchange rate of one

currency In terms of the others?

a)

Currency appreciation

b)

Currency depreciation

c)

Currency devaluation

d)

Currency float

46.

An accounting term that represents an Inventory account

adjustment.

a)

Cost of goods sold

b)

Standard cost

c)

Overhead cost

d)

Cost accounting

47.

It is a stock of a product which is held by a trade body or government as a means of regulating the price of that product.


a)

Stock plle

b)

Hoard stock

c)

Withheld stock


d)

.Buffer stock

48.

48.What is the ratio of the net Income to owner's equity?


a)

Gross margin

b)

Return of Investment ratio

c)

Book value per share of common stock

d)

Inventory turnover

49.

What Is the feature of some bonds whereby the Issuer can redeem it before it matures?


a)

Recall clause

b)

Callability

c)

Call class

d)

Recall clause

50.

The functional depreciation is sometimes called


a)

Demand depreciation

b)

Adolescence

c)

Life Depreciation

d)

Failure Depreaciation

51.

What method Is often used in municipal project evaluations where benefits and costs accrue to different segments of the community?


a)

Annual cost method

b)

Rate of return method

c)

Benefit-cost ratio

d)

EUAC

52.

What Is the main reason why the sinking fund method of computing depredation is seldom used in the Industry?

a)

Unstable economy

b)

Rate of Interest cannot be exactly determined

c)

The Initial deprecation Is high

d)

The initial depreciation is low

53.

Which is true about partnership?

a)

It has a perpetual life.

b)

It will be dissolved if one of the partners ceases to be connected with the partnership.

c)

It can be handed down from one generation of partners to another.

d)

Its capitalization must be equal for each partner.

54.

The ability to convert assets to cash quickly is known as

a)

Solvency

b)

Leverage

c)

Liquidity

d)

Insolvency

55.

What is the basic accounting equation?


a)

Assets =liability +owner's equity

b)

Liability = assets + owners' equity

c)

Owner's equity = assets +liability

d)

Owner's equity =llability-assets

56.

The ability to meet debts as they become due is known as


a)

Solvency

b)

Leverage

c)

Insolvency

d)

Liquidity

57.

In what method of computing depreciation where it assumes that a sinking fund is that a sinking fund is established in which funds will accumulate for replacement purposes?


a)

.Straight line method

b)

Sinking fund method

c)

Sum-of-year digit method

d)

Declining balance method

58.

What type of depredation is due to the reduction in the demand for the function that the equipment or asset was designed to render?


a)

Functional depreciation

b)

Design depreciation

c)

Physical depreciation

d)

Demand depreciation

59.

Salvage value Is sometimes known as


a)

Junk value

b)

Scrap value

c)

Second-hand value

d)

Going value

60.

The unrecovered deprecation which results due to poor estimates as to the life of the equipment is called


a)

Sunk cost

b)

In-place value

c)

Annuity

d)

Economic Life

61.

In case of bankruptcy of a partnership,

a)

The partners are not liable for the liabilities of the partnership

b)

The partnership assets (excluding the partners personal

c)

The partners personal assets are attached to the debt of the partnership

d)

The partners might sell stock to generate additional capital

62.

What Is the simplest form of business organization?


a)

Enterprise

b)

Sole proprietorship

c)

Corporation

d)

Partnership

63.

A secondary book of accounts, the

obtained from the journal.


a)

Balance sheet

b)

Worksheet

c)

Ledger

d)

Trial balance

64.

64.What are the common methods computing charge?


a)

Conservative method and conventional method

b)

Rational and Irrational method

c)

Unit method and percentage method

d)

Discrete method and depletion allowance method

65.

Defined as a financial security note issued by business or corporation and by the government as a means of borrowing long-term fund.


a)

T-bills

b)

Securities

c)

Bank notes

66.

Capitalized cost of a project Is also known as.


a)

Project cost

b)

Life cost

c)

Infinite cost

d)

Life cycle cost

67.

What has to increase If the company is to achieve their goal?

a)

The ration of sales to total assets

b)

The ratio of total assets to equlty

c)

Equity

d)

Any combination of (A),(B) and(C)

68.

A method of depreciation whereby the amount to recover is spread uniformly over the estimated life of the asset in terms of the periods or units of output.


a)

Straight line method

b)

Sinking fund method

c)

Declining balance method

d)

SYD method

69.

Funds supplied by others on which fixed rate of interest must be paid and the debt be paid and the debt be repaid at a specific place and time.


a)

A. Discount

b)

Working capital

c)

Borrowed capital

d)

Cash flow

70.

 Capitalized cost of a project is also known as


a)

Infinite cost

b)

Life cycle cost

c)

Life cost

d)

Project cost

71.

A method of depreciation whereby the amount to recover is spread unfirmly over the estimated life of the asset in terms of the periods or units of output

a)

straight line method

b)

sinking fund method

c)

declining balance method

d)

SYD method

72.

What refers to the reduction in the level of a national income and output usually accompanied by a fall in the general price level?

a)

Deflation

b)

Inflation

c)

Devaluation

d)

Depreciation

73.

What is the main reason why the sinking fund method of computing depreciation is seldom used in the industry?

a)

Unstable Economy

b)

Rate of interest cannot be exactly determined

c)

the initial depreciation is high

d)

the initial depreciation is low

74.

Which of the following depreciation methods cannot have a salvage value of zero?


a)

Sinking fund method

b)

Straight line method

c)

SYD method

d)

Declining balance method

75.

Type of Interest computed using the actual number of days Ina given year, ether 365 days or 366 days.


a)

Ordinary simple interest

b)

Compound Interest

c)

Exact simple Interest

d)

Effective Interest

76.

A method of depreciation where a fixed sum of money is regularly deposited at compound interest in a real or imaginary fund in order to accumulate an amount equal to the total depreciation of an asset at the end of the asset's estimated life.

a)

Straight Line method

b)

Sinking fund method

c)

Declining balance method

d)

SYD METHOD

77.

What is normally used to compare alternatives that accomplish the same purpose but have unequal lives?

a)

Capitalized cost method

b)

Present worth method

c)

Annual cost method

d)

MARR

78.

What refers to the amount of a product made available for a sale?

a)

Supply

b)

Demand

c)

product

d)

Good

79.

What is a measure of the average speed with which accounts receivable are collected?

a)

profit margin ratio

b)

Receivables turnover

c)

Return of investment ratior

d)

Average age of receivables

80.

A type of stock that represents ownership and enjoys certain preferences than a ordinary stock.

a)

Authorized stock

b)

Incorporator stock

c)

Preferred stock

d)

Presidential Stock

81.

A depreciation method where the value of an asset decreases at a constant rate

a)

Sum of years digit

b)

Straight line

c)

Sinking fund

d)

Declining Balance

82.

Kind of obligation which has no condition attached. Deal Favor Gratuitous Agreement

a)

Deal

b)

Favor

c)

Gratuitous

d)

Agreement

83.

"When one of the factors of production is fixed in quantity or is difficult to increase, increasing the other factors of production will result in less than proportionate increase in output".

a)

Law of diminishing return

b)

Law of supply

c)

Law of demand

d)

Law of supply and demand

84.

A type of bond to which are attached coupons indicating the interest due and the date when such interest is to be paid.

a)

Registered bond

b)

Mortgage bond

c)

Coupon bond

d)

Collateral trust bond

85.

The length of time usually in year for the cumulative net annual profit to equal the initial investment is called______

a)

Payback period

b)

return of investment

c)

receivable turnover

d)

redeemed period

86.

What refers to the residual value of a company's assets after all outside liabilities (shareholders excluded) have been allowed for?

a)

Dividend

b)

Return

c)

Equity

d)

Par value

87.

What is defined as the investment of loan or principal which is based not only on the original amount of the loan or principal but the amount of loaned or principal plus the previous accumulated interest?

a)

Effective rate of interest

b)

Nominal rate of interest

c)

Compound Interest

d)

Simple interest

88.

What refers to the buying or selling of goods between two or more markers in order to take profitable advantage of any differences in the prices quoted in these markets?

a)

Cartel

b)

Arbitrage

c)

Black Market

d)

A priori

89.

A formal organization of producers within an industry forming a perfect collusion purposely formed to increase profit and block new comers from the industry is called?

a)

Cartel

b)

Monopoly

c)

Corporation

d)

Competitors

90.

It is defined as the analysis and evaluation of the monetary consequences by using the theories and principles of economics to engineering application, designs and projects

a)

Engineering cost analysis

b)

Engineering economy

c)

Economic analysis

d)

Design cost analysis

91.

A market situation whereby there is only one buyer of an item for which there is no goods substitute.

a)

Monosophy

b)

Oligophy

c)

Monopoly

d)

Oligopsony

92.

Two classifications of goods and services

a)

Ready-made and made to order

b)

Consumer and producer

c)

Raw and finished

d)

Local and imported

93.

Another term for "acid-test ratio"

a)

Current ratio

b)

Profit margin ratio

c)

quick ratio

d)

Price-earnings ratio

94.

Provisions in contract for construction to allow cost adjustments due to changes in cost of materials and statutory minimum wage.

a)

Escalatory clause

b)

Specifications

c)

General condition

d)

Quasi-delects

95.

What is another term for "perfect competition"

a)

Atomistic competition

b)

No-limit competition

c)

Free-for-all competition

d)

Heterogeneous market

96.

It is defined as the certificate of indebtedness of corporation usually for a period not less than 10 years and guaranteed by a mortgage on certain assets of a corporation

a)

Bond

b)

Stock

c)

T-bills

d)

Promissory note

97.

A document that show proof of legal ownership of a financial security

a)

Bond

b)

Coupon

c)

Bank note

d)

Check

98.

Specifies a definite portion of ownership of the capital of the corporation, all of each being alike in value

a)

Stock

b)

Same value

c)

Fair value

d)

Common stock

99.

What is the opposite of perfect competition?

a)

Monopsony

b)

Oligophy

c)

Oligopsony

d)

Monopoly

100.

What refers to the amount of money paid for the use of borrowed capital?

a)

Interest

b)

Rate of interest

c)

Simple interest

d)

Principal

101.

What refers to the ratio of the Interest payment to the principal for a given unit of time and usually expressed as a percentage of the principal?

a)

Return of Investment

b)

Yield

c)

Interest rate

d)

Rate of return

102.

What Is defined as the Investment of loan or principal which is based not only on the original amount of the loan or principal but the amount of loaned or principal plus the previous accumulated interest?

a)

Effective rate of interest

b)

Nominal rate of Interest

c)

Compound Interest

d)

Simple Interest

103.

What refers to the cost of borrowing money or the amount earned by a unit principal per unit time?

a)

Yield rate

b)

Rate of return

c)

Rate of interest

d)

Economic return

104.

What refers to the (1 + i) to the power n is called

a)

present amount factor

b)

future amount factor

c)

compound amount factor

d)

interest amount factor

105.

Compounded bimonthly has an Interest period of

a)

3 months

b)

0.5-month

c)

6 months

d)

2 months

106.

What is an annuity?

a)

A series of equal payments at equal time periods

b)

The cost of manufacturing a product

c)

An investment that yields an equal amount of interest each year

d)

The overhead cost per unit of production

107.

It is the actual interest earned in one year period.

a)

Nominal Rate

b)

Effective rate

c)

Simple rate

d)

Compound rate

108.

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

a)

Load factor

b)

Demand factor

c)

Sinking fund factor

d)

Present worth factor

109.

What is the type of annuity where the payments are made at the end of each period starting from the first period?

a)

Ordinary annuity

b)

Perpetuity

c)

Annuity due

d)

Deferred annuity

110.

What Is defined as the reduction or fall of the value of an asset due to constant use and passage of time?

a)

Depletion

b)

Inflation

c)

Depreciation

d)

Deflation

111.

The worth of the property which is equal to the original cost less the amount which has been charged to depreciation.

a)

Scrap value

b)

Book value

c)

Salvage value

d)

Market value

112.

The amount that the property would give if sold for junk.

a)

Junk value

b)

Scrap value

c)

Salvage value

d)

Book value

113.

Estimated value of the property at the useful life.

a)

Market value

b)

Fair value

c)

Salvage value

d)

Book value

114.

The amount which has been spent or capital Invested which for some reasons cannot be retrieved.

a)

Sunk cost

b)

Fixed costs

c)

Depletion cost

d)

Construction cost

115.

Salvage value is sometimes known as

a)

Scrap value

b)

Going value

c)

Junk value

d)

Second-hand value

116.

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?

a)

Book value

b)

Market value

c)

Fair value

d)

Franchise value

117.

In SYD method of computing depreciation, which of the following is the formula in finding the sum of years' digits?

a)

n(n - 1)

b)

[n(n + 2)] / 2

c)

C. [n(n-1)]/2

d)

[n(n+1)]/2

118.

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?

a)

Straight line method

b)

Sinking fund method

c)

Sum-of-year digit method

d)

Declining balance method

119.

Which of the following depreciation methods cannot have a salvage value of zero?

a)

Declining balance method

b)

Sinking fund method

c)

Sinking fund method

d)

SYD method

120.

The rise in the prices of goods and services over a period of time

a)

Depletion

b)

Inflation

c)

Depreciation

d)

Deflation

121.

What is normally used to compare alternatives that accomplish the same purpose but have unequal lives?

a)

Capitalized cost method

b)

Present worth method

c)

Annual cost method

d)

MARR

122.

What method is often used in municipal project evaluations where benefits and costs accrue to different segments of the community?

a)

Annual cost method

b)

Benefit-cost ratio

c)

Rate of return method

d)

EUAC

123.

What refers to an imaginary cost representing what will not be received if a particular strategy is rejected?

a)

Opportunity cost

b)

Ghost cost

c)

horizon cost

d)

Null cost