engineering economy MCQs – Page 7

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

engineering economy Mcqs
121. What is the feature of some bonds whereby the issuer can redeem it before it matures ?
comments icon0
A. Callability

B. Call class

C. Return clause

D. Recall clause

122. 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 ?
comments icon0

A. Nominal rate of interest

B. Simple interest

C. Compound interest

D. Effective rate of interest

123. What are the two classifications of goods and services ?
comments icon0
A. Consumer and producer

B. Local and imported

C. Raw and finished

D. Ready-made and made-to-order

124. What is considered as the basic consuming or demanding unit of a commodity ?
comments icon0

A. Seller

B. Buyer or consumer

C. Manufacturer

D. Producer

125. The unrecovered depreciation which results due to poor estimates as to the life of the equipment is called _____________________?
comments icon0

A. Annuity

B. In-place value

C. Sunk cost

D. Economic life

126. How long will it take money to double itself if invested at 5% compounded annually ?
comments icon0

A. 14.7 years

B. 13.7 years

C. 14.2 years

D. 15.3 years

127. What is defined as an entity which makes product, good or services available to buyer or consumer in exchange of monetary consideration ?
comments icon0

A. Producer

B. Seller

C. Manufacturer

D. Buyer or consumer
128. A VOM has a selling price of P 400. If its selling price is expected to decline at a rate of 10% per annum due to obsolescence, what will be its selling price after 5 years ?
comments icon0

A. P 231.56

B. P 212.90

C. P 236.20

D. P 222.67

129. What market situation exists where there is only one buyer and only one seller ?
comments icon0

A. Monopoly

B. Monopsony

C. Bilateral monopsony

D. Bilateral monopoly
130. A P 1, 000, 6% bond pays dividend semiannually and will be redeemed at 110% on June 21, 204. It is bought on June 21, 2001 to yield 4% interest. Find the price of the bond ?
comments icon0

A. P 1,133.78

B. P 1,155.06

C. P 1,122.70

D. P 1,144.81
131. In what method of computing depreciation where it assumes that a sinking fund is established in which funds will accumulate for replacement purposes ?
comments icon0

A. Sum-of-year digit method

B. Straight line method

C. Declining balance method

D. Sinking fund method
132. A college freshman borrowed P2,000 from a bank for his tuition fee and promised to pay the amount for one year. He received only the amount of P1,920 after the bank collected the advance interest of P80.00. What was the rate of discount ?
comments icon0

A. 4.25%

B. 4.00 %

C. 4.15%

D. 3.67%

133. You borrow P3,500.00 for one year from a friend at an interest rate of 1.5% per month instead of taking a loan from a bank at a rate of 18% per year. How much lesser you will pay by borrowing the money from the bank ?
comments icon0
A. P54.66

B. P 62.44

C. P44.55

D. P37.56

134. What refers to the need, want or desire for a product backed by the money to purchase it ?
comments icon0

A. Supply

B. Product

C. Good

D. Demand
135. The common ratio is the ratio of_______________?
comments icon0

A. Net income to owners equity

B. Gross profit to net sales

C. Current assets to current liabilities

D. Net credit sales to average net receivable

136. The deliberate lowering of the price of a nations currency in terms of the accepted standard (Gold, American dollar or the British pound) is known as ____________________?
comments icon0
A. Currency devaluation

B. Currency appreciation

C. Currency depreciation

D. Currency float

137. What is the factor name of the formula (1+i)^-n ?
comments icon0
A. Single payment present worth

B. Single payment compound amount

C. Uniform gradient future worth

D. Capital recovery

138. What represents the ownership of stockholders who have a residual claim on the assets of the corporation after all other claims have been settled ?
comments icon0
A. Common stock

B. Incorporator stock

C. Authorized capital stock

D. Preferred stock

139. What is normally used to compare alternatives that accomplish the same purpose but have unequal lives ?
comments icon0
A. Annual cost method

B. Present worth method

C. MARR

D. Capitalized cost method

140. Cash money and credit necessary to establish and operate an enterprise are generally called _____________________?
comments icon0

A. Liabilities

B. Assets

C. Capital

D. Funds