engineering economy MCQs – Page 3

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

engineering economy Mcqs

41. Shell Philippines, a multinational company, has a total gross income for a particular year of P 50,000,000. The taxable income after taking all deductions except for depletion is P 18,500,000. What is the allowable depletion allowance for that particular year? Take percentage of gross income for oil as 22%?
0

A. P 9,358.41

B. P 9,228.45

C. P 9,308.45

D. P 9,250.00

42. Under the depletion allowance method in computing depreciation, the depletion charge is equal to either ________________ which ever is smaller ?
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A. Fixed percentage of gross income or 50% of the net taxable income

B. 50% of the fixed percentage of gross income or the net taxable income

C. 50% of the fixed percentage of gross income or 50% of the net taxable income

D. Fixed percentage of gross income or the net taxable income

43. What is considered as the standard unit which forms the basis of a countrys domestic money supply ?
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A. Foreign exchange

B. Cash or check

C. Monetary unit

D. Currency

44. What market situation exists where there are few sellers and few buyers ?
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A. Bilateral Oligopsony

B. Bilateral oligopoly

C. Oligopsony

D. Oligopoly

45. An asset is purchased for P 9,000.00. Its estimated economic life is 10 years after which it will be sold for P 1,000.00. Find the depreciation in the first three years using sum-of-years digit method____________________?
0

A. P 3,279.27

B. P 3,729.27

C. P 3,792.72

D. P 3,927.27

46. Miss Evilla borrowed money from a bank. She receives from the bank P1,340.00 and promised to pay P1,500.00 at the end of 9 months. Determine the corresponding discount rate or often referred to as the bankers discount?
0

A. 13.15%

B. 13.46%

C. 13.32%

D. 13.73 %

47. A man loans P 187,400 from a bank with interest at 5% compounded annually. He agrees to pay his obligations by paying 8 equal annual payments, the first being due at the end of 10 years. Find the annual payments ?
0

A. P 43,489.47

B. P 43,763.20

C. P 43,600.10

D. P 43,263.91

48. First Benchmark Publishings 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 ?
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A. 20%

B. 21 %

C. 18%

D. 19%

49. A loan of P5,000 is made for a period of 15 months, at a simple interest rate of 15%, what future amount is due at the end of the loan period ?
0

A. 5,937.50

B. 5,873.20

C. 5,712.40

D. 5,690.12

50. The exact simple interest of P5,000 invested from June 21, 1995 to December 25, 1995 is P100. What is the rate of interest ?
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A. 3.92%

B. 3.98%

C. 3.90 %

D. 3.95%

51. What is the type of annuity where the payments are made at the beginning of the each period starting from the first period ?
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A. Ordinary annuity

B. Annuity due

C. Deferred annuity

D. Perpetuity

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

B. Commodities

C. Goods or commodities

D. Services

53. 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 ?
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A. P 2,544.45

B. P 2,500.57

C. P 2,504.57

D. P 2,540.56

54. Perfect monopoly exists only if_______________?
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A. the single vendor is the only one who has the knowledge of the product

B. the single vendor can prevent the entry of all other vendors in the market

C. the single vendor is the only one who has the permit to sell

D. the single vendor gets the absolute franchise of the product

55. The functional depreciation is sometimes called ____________________?
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A. Failure depreciation

B. Life depreciation

C. Demand depreciation

D. Adolescence

56. A manufacturing firm maintains one product assembly line to produce signal generators. Weekly demand for the generators is 35 units. The line operates for 7 hours per day, 5 days per week. What is the maximum production time per unit in hours required of the line to meet the demand ?
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A. 1.6 hours per unit

B. 1.4 hours per unit

C. 1.0 hour per unit

D. 1.2 hours per unit

57. What are the common methods of computing depletion charge ?
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A. Discrete method and depletion allowance method

B. Unit method and percentage method

C. Conservative method and conventional method

D. Rational method and irrational method

58. What do you call any particular raw material or primary product such as cloth, wool, flour, coffee, etc ?
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A. Necessity

B. Stock

C. Utility

D. Commodity

59. Under conditions of perfect competition, the price at which any given product will be supplied and purchased is the price that will result in the supply and the demand being equal. This statement is known as the_________________?
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A. Law of demand

B. Law of supply and demand

C. Law of diminishing return

D. Law of supply

60. The price at which the callable bond will be redeemed from the bondholder is called ____________________?
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A. Call value

B. Redemption value

C. Face value

D. Par value

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