engineering economy Mcqs
151. 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 as _____________________?
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A. Economic return

B. Gain

C. Yield

D. Earning value

152. What refers to the interest rate at which the present work of the cash flow on a project is zero of the interest earned by an investment ?
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A. Yield

B. Return of investment

C. Economic return

D. Rate of return
153. What is the factor name of the formula [i(1+i)^n]/[((1+i)^n)-1] ?
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A. Uniform series sinking fund

B. Capital recovery

C. Single payment present worth

D. Uniform gradient future worth

154. What is the simplest form of business organization ?
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A. Enterprise

B. Partnership

C. Sole proprietorship

D. Corporation

155. A form of business organization in which a person conducts his business alone and entirely for his own profit, being solely responsible for all its activities and liabilities ?
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A. Entrepreneurship

B. Sole proprietorship

C. Corporation

D. Partnership

156. What is the reduction in the money value of capital asset is called ?
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A. Deficit

B. Capital expenditure

C. Loss

D. Capital loss
157. All are classified under direct labor expenses EXCEPT one. Which one ?
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A. Testing cost

B. Inspection cost

C. Assembly cost

D. Supervision cost
158. What stock represents ownership and enjoys certain preferences than ordinary stock ?
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A. Preferred stock

B. Authorized stock

C. Incorporators stock

D. Presidential stock

159. Which is true about corporation ?
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A. Its life is dependent on the lives of the incorporators.

B. It is worse type of business organization.

C. The stock holders of the corporation are only liable to the extent of their investments.

D. The minimum number of incorporators to start a corporation is three.

160. Is 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 ?
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A. Property

B. Partnership

C. Corporation

D. Organization

161. What method is often used in municipal project evaluations where benefits and costs accrue to different segments of the community ?
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A. Benefit-cost ratio

B. EUAC

C. Rate of return method

D. Annual cost method

162. What 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 ?
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A. Stock pile

B. Buffer stock

C. Withheld stock

D. Hoard stock

163. What is a government bond which has an indefinite life rather than a specific maturity ?
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A. T-bill

B. Debenture

C. Coupon

D. Consol
164. Double taxation is a disadvantage of which business organization ?
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A. Enterprise

B. Sole proprietorship

C. Corporation

D. Partnership

165. What is the increase in the money value of a capital asset is called?
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A. Capital stock

B. Profit

C. Capital gain

D. Capital expenditure

166. A form of business firm which is owned and run by a group of individuals for their mutual benefit is called ___________________?
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A. Partnership

B. Cooperative

C. Corporation

D. Enterprise

167. The ability to convert assets to cash quickly is known as ________________?
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A. Insolvency

B. Leverage

C. Liquidity

D. Solvency

168. What refers to the claim of anyone to ownership ?
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A. Equity

B. Assets

C. Proprietorship

D. Liability

169. Gross margin is the ratio of the gross profit to _________________?
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A. Net sale

B. Owners equity

C. Inventory turnover

D. Quick assets

170. All the proceeds which are received by the business as a result of the sale of goods is called _________________?
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A. Net income

B. Net revenue

C. Gross income

D. Total sales

171. Aggregation of individuals formed for the purpose of conducting a business and recognized by law as a fictitious person is called ________________________?
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A. Corporation

B. Partnership

C. Stockholders

D. Investors

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

B. Operating cost

C. Annual cost

D. Capitalized cost
173. The flow back of profit plus depreciation form a given project is called ___________________?
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A. Earning value

B. Capital recovery

C. Cash flow

D. Economic return

174. Capitalized cost of any structure or property is computed by which formula ?
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A. Annual cost interest of first cost

B. First cost + cost of perpetual maintenance

C. First cost + salvage value

D. First cost + interest of first cost

175. What do you call a one-time credit against taxes ?
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A. Credible credit

B. Due credit

C. Revenue credit

D. Tax credit
176. What is an accounting term that represents an inventory account adjustment ?
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A. Cost of goods sold

B. Standard cost

C. Cost accounting

D. Overhead cost

177. What is a secondary book of accounts, the information of which is obtained from the journal is called ?
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A. Trial balance

B. Ledger

C. Worksheet

D. Balanced sheet

178. What is a measure of the average speed with which accounts receivable are collected ?
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A. Current ratio

B. Quick ratio

C. Receivable turnover

D. Acid test ratio

179. What is an index of short-term paying ability ?
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A. Gross margin

B. Profit margin ratio

C. Current ratio

D. Price-earnings ratio

180. The ability to meet debts as they become due is known as __________________?
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A. Solvency

B. Liquidity

C. Insolvency

D. Leverage

181. What is another term for current assets ?
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A. Fixed assets

B. Non-liquid assets

C. Liquid assets

D. Ccash

182. The original record of a business transaction is recorded in this book_____________?
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A. Ledger

B. Account book

C. Journal

D. Work book

183. The ratio of the net income before taxes to net sales is called __________________?
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A. Price-earnings ratio

B. Profit margin ratio

C. Inventory turnover

D. Current ratio

184. What is the change in cost per unit variable change called ?
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A. Supplemental cost

B. Variable cost

C. Fixed cost

D. Incremental cost
185. Capitalized cost of a project is also known as ____________________?
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A. Life cycle cost

B. Life cost

C. Project cost

D. Infinite cost

186. What represents the share of participation in business organizations?
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A. Stock

B. Franchise

C. Partnership

D. Corporation

187. The financial health of the company is measured in terms of______________?
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A. Solvency

B. All of the above

C. Liquidity

D. Relative risk

188. In case of bankruptcy of a partnership________________?
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A. The partnership assets (excluding the partners personal assets) only will be used to pay the liabilities

B. The partners are not liable for the liabilities of the partnership

C. The partners nay sell stock to generate additional capital

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

189. What refers to the residual value of a companys assets after all outside liabilities (shareholders excluded) have been allowed for ?
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A. Dividend

B. Par value

C. Return

D. Equity
190. As applied to capitalized asset, the distribution of the initial cost by a periodic changes to operation as in depreciation or the reduction of a debt by either periodic or irregular prearranged programs is called ___________________?
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A. Capital recovery

B. Annuity factor

C. Annuity

D. Amortization
191. What refers to an imaginary cost representing what will not be received if a particular strategy is rejected ?
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A. Opportunity cost

B. Ghost cost

C. Null cost

D. Horizon cost

192. Which is true about partnership ?
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A. It will be dissolved if one of the partners ceases to be connected with the partnership

B. Its capitalization must be equal for each partner

C. It has a perpetual life

D. It can be handed down from one generation of partners to another
193. 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______________?
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A. Currency depreciation

B. Currency appreciation

C. Currency devaluation

D. Currency float

194. What is another term for acid-test ratio ?
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A. Price-earnings ratio

B. Quick ratio

C. Profit margin ratio

D. Current ratio

195. Which of the following is an example of intangible asset ?
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A. Cash

B. Patents

C. Furnitures

D. Investment in subsidiary companies

196. What is used to record historical financial transactions ?
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A. Bookkeeping system

B. Ledger system

C. General journal system

D. Balance check

197. The amount of companys profit that the board of directors of the corporation decides to distribute to ordinary shareholders is called ___________________?
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A. Equity

B. Share of stock

C. Return

D. Dividend
198. What is the main reason why the sinking fund method of computing depreciation is seldom used in the industry ?
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A. Unstable economy

B. Rate of interest cannot be exactly determined

C. The initial deprecation is high

D. The initial depreciation is low