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Focused topic practice

engineering economy MCQs

Practise focused engineering economy questions with marked answers for exam preparation and subject revision.

engineering economy Mcqs

1. What refers to a document that shows proof of legal ownership of a financial security ?
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A. Bank note

B. Bond

C. Coupon

D. Check

2. The depletion allowance method of computing depletion is commonly known as ___________________?
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A. Percentage method

B. Sinking fund method

C. Factor method

D. Unit method

3. What refers to the goods and services that are required to support human life, needs and activities ?
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A. Necessity

B. Luxury

C. Producer products

D. Consumer products

4. What is defined as the reduction or fall of the value of an asset due to constant use and passage of time ?
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A. Depreciation

B. Depletion

C. Inflation

D. Deflation

5. What bond whose security is a mortgage on certain specified assets of the corporation ?
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A. Collateral trust bond

B. Registered bond

C. Mortgage bond

D. Debenture bond

6. Mr. Bacani borrowed money from the bank. He received from the bank P1,842 and promised to repay P2,000 at the end of 10 months. Determine the rate of simple interest?
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A. 12.19%

B. 12.03%

C. 11.54%

D. 10.29 %

7. What is the term for an annuity with a fixed time span ?
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A. Ordinary annuity

B. Annuity certain

C. Annuity due

D. Perpetuity

8. What annuity is required over 12 years to equate with a future amount of P 20,000? Assume i= 6% annually ?
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A. P 1,205.74

B. P 1,290.34

C. P 1,107.34

D. P 1,185.54

9. A investor wishes to earn 7% on his capital after payment of taxes. If the income from an available investment will be taxed at an average rate of 42%, what minimum rate of return, before payment of taxes, must the investment offer to be justified ?
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A. 12.87%

B. 12.34%

C. 12.07 %

D. 12.67%

10. Duopsony is a market situation where there is/are______________?
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A. Few sellers and few buyers

B. One seller and few buyers

C. Many sellers and few buyers

D. Few sellers and many buyers

11. A loan for P50,000 is to be paid in 3 years at the amount of P65,000. What is the effective rate of money ?
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A. 9.01%

B. 9.41%

C. 9.31%

D. 9.14 %

12. What type of bond which can be redeemed before maturity date ?
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A. Callable bond

B. Preferred bond

C. Registered bond

D. Incorporators bond

13. What is the present worth of two P 100 payments at the end of the third year and fourth year? The annual interest rate is 8%?
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A. P 151.09

B. P 153.89

C. P 150.56

D. P 152.88

14. 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 ____________________?
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A. Coupon bond

B. Mortgage bond

C. Registered bond

D. Collateral trust bond

15. A mathematical expression also known as the present value of annuity of one is called ____________________?
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A. Load factor

B. Sinking fund factor

C. Present worth factor

D. Demand factor

16. What type of bond whose guaranty is in lien on railroad equipment, such as freight and passenger cars, locomotives, etc ?
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A. Railroad bond

B. Equipment trust bond

C. Equipment bond

D. Equipment obligation bond

17. What is defined as any tangible economic product that contributes directly or indirectly to the satisfaction of human want ?
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A. Goods or commodities

B. Services

C. Commodities

D. Goods

18. What is a market situation whereby there is only one buyer of an item for which there is no goods substitute ?
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A. Oligopoly

B. Monopoly

C. Oligopsony

D. Monopsony

19. An amount of P1,000 becomes P1,608.44 after 4 years compounded bimonthly. Find the nominal interest?
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A. 12.32%

B. 11.89%

C. 12.00%

D. 12.08%

20. One bankers year is equivalent to ________________ days?
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A. 365

B. 300

C. 366

D. 360

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