Practice Engineering Economics Multiple Choice Questions Quiz-6 - MCQGeeks.com

Q.1

A factory operator bought a diesel generator set for P 10,000.00 and agreed to pay the dealer uniform sum at the end of each year for 5 years at 8% interest compounded annually, that the final payment will cancel the debt for principal and interest. What is the annual payment?

P 2,500.57
P 2,544.45
P 2,540.56
P 2,504.57

Q.2

Both architect and engineer make use of the cost estimate of the project:

For site selection
For designing of the project
For choosing alternatives
All of these

Q.3

What refers to the present worth of cost associated with an asset for an infinite period of time?

Annual cost
Increment cost
Capitalized cost
Operating cost

Q.4

Pick up the correct statement from the following:

The ratios which show profitability in relation to sales and those which show profitability in relation to investment are called profitability ratios
The ratio of gross profit and net sales is called profitability in relation to sales ratio
The ratio of net profit after taxes to total assets is known as profitability in relation to investment ratio
All of these

Q.5

Pick up the correct statement from the following:

The receipts and disbursements in a given time interval are referred to as cash flow
The assumptions that all cash flows occur at the end of the interest period, is known as the end of period convention
The cash flow diagram represents the statement of the problem and also includes what is given and what is to be found
All of the above

Q.6

Pick up the correct statement from the following:

The capital required to get a project started, is called first cost
The costs associated with a new or existing project that remain unaffected by the changes in activity level over the normal range of operation of the project, are called fixed costs
The group of costs that vary proportionately to the changes in the activity level of a new or existing project are called variable costs
All of these

Q.7

What refers to the goods and services that are desired by human and will be acquired only after all the needs have been satisfied?

Producer products
Consumer products
Luxury
Necessity

Q.8

Pick up the correct statement from the following:

Over head rate = total over head in rupees for period/Direct labour in rupees for period
Over head cost per unit = Overhead ratio × direct labour cost/unit
Both (A) and (B)
Neither (A) nor (B)

Q.9

Pick up the method used for project evaluation and selection in capital budgeting from the following:

Payback period
Internal ratio of return
Net present worth
All the above

Q.10

Pick up the correct statement from the following:

Ratio analysis is the procedure of determining and interpreting numerical relationship of various items of the financial statement
All financial ratios are obtained by relating two sets of information contained in a Single financial statement
The relationship between two accounting figures expressed mathematically, is known as a financial ratio
All of these

Q.11

The interest calculated on the basis of 365 days a year, is known as:

Interest
Ordinary simple interest
Exact simple interest
None of these

Q.12

Pick up the correct reason for making conceptual (or preliminary) estimate from the following:

To have a check on a definitive cost estimate
To check quotations from contractors and/or sub-contractors
To compute target estimate for the owner while drawing and specifications are in initial stage
All of these

Q.13

Pick up the main purpose of project cost control from the following:

To signal immediate warning of uneconomic operations
To provide a feed back to the estimator
To promote cost consciousness
All of these

Q.14

Pick up the correct statement from the following:

The change in the amount of money over a given time period is called 'time value' of money, a most important concept in engineering economy
The manifestation of the time value of money is termed as interest
Interest on borrowing = present amount owed - original loan
All of these

Q.15

Pick up the correct statement from the following:

The difference between sales revenue and cost of goods sold, is known as 'Gross Profit'
The gross profit percentage is the average profit margin obtained on goods sold
The relationship of contribution to sales is known as contribution ratio
All of these

Q.16

Pick up the correct statement from the following:

The ability of a company to meet obligations which are likely to mature in short term, is called liquidity
The liquidity ratio may be defined as a relationship of current liabilities and current assets and advances
The liquidity ratios are used to indicate the financial position of the firm
All of these

Q.17

Pick up the correct statement from the following:

The capital required to get a project started is the first cost
The first cost is a single cash flow or a series of cash flows that are made in the beginning of the activity's life span
The first cost of purchasing a car is the sum of the down payment, taxes and dealers charges
All of these

Q.18

Pick up the correct statement from the following:

An annuity is a series of equal payments occurring at equal period of time
Annuity is called an equal payment or uniform payment series
An annuity may have periods of time of any length but should always be of equal length
All the above

Q.19

Pick up the correct method adopted for developing the approximate or conceptual estimates from the following:

Base unit method
Cost per function method
Cost per square metre
All of these

Q.20

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?

Return of investment
Interest rate
Yield
Rate of return

Q.21

First Benchmark Publishing’s gross margin is 50% of sales. The operating costs of the publishing are estimated at 15% of sales. If the company is within the 40% tax bracket, determine the percent of sales is their profit after taxes?

21 %
20 %
19 %
18 %

Q.22

The construction estimate of a project is used by:

The owner of the facility
The consulting architect/engineer
The contractor of the project
All of these

Q.23

What are the two classifications of goods and services?

Local and imported
Raw and finished
Consumer and producer
Ready-made and made-to-order

Q.24

What 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?

Bond
T-bills
Stock
Promissory note

Q.25

Which method is adopted to develop an approximate or conceptual estimate for perimeter works for buildings from the following?

Cost per linear metre method
Base unit method
Cost per function method
Cost per square metre method

Q.26

Pick up the correct statement from the following:

The financial ratio summarizes some aspect of the firm's financial condition at the time of preparing a balance sheet
Both the numerator and denominator of financial ratios come directly from the balance sheet
Income statement ratios compare a flow item from the income statement to another flow item form the income statement
All of these

Q.27

Pick up the correct statement from the following:

The ratio of current assets, loans and advances, and the current liquidity is called current ratio
Larger the current ratio, larger is the margin of safety
The operating profit is the difference between gross profit and operating expenses
All of these

Q.28

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

11.89 %
12.00 %
12.08 %
12.32 %

Q.29

Mr. David deposits Rs 1200 now, Rs 800 two years from now and Rs 1000 five years from now. If the savings bank's rate of interest in 5%, he will receive an amount of Rs X, 10 years from now, where ‘X’ is

Rs. 3415
Rs. 4225
Rs. 4413
Rs. 4826

Q.30

What denotes in the fall in the exchange rate of one currency in terms of the others? This term is usually applies to the floating exchange rate.

Currency appreciation
Currency depreciation
Currency devaluation
Currency float

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