Engineering Economics — Part 2 MCQs with Explanations

Mortgage bond is the correct answer to “What bond whose security is a mortgage on certain specified assets of the corporation”. This question is standard in competitive examination syllabi for Engineering Economics.

All of these is the correct answer to “In the cash-flow diagram shown in the given figure”. This question is standard in competitive examination syllabi for Engineering Economics.

Rs. 25000 per year is the correct answer to “Refer to the cash flow diagram of uniform gradient in a cash flow (in the given figure), the gradient is:”. This question is standard in competitive examination syllabi for Engineering Economics.

5,937.50 is the correct answer to “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”. This question is standard in competitive examination syllabi for Engineering Economics.

3.0% is the correct answer to “A P 1,000,000 issue of 3%, 15-year bond was sold at 95%. What is the rate of interest of this investment”. This question is standard in competitive examination syllabi for Engineering Economics.

12.07 % is the correct answer to “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”. This question is standard in competitive examination syllabi for Engineering Economics.

Fair value is the correct answer to “What refers to the value of an asset which a disinterested third party, different from the buyer and seller, will determine in order to establish a price acceptable to both parties”. This question is standard in competitive examination syllabi for Engineering Economics.

Liquid assets is the correct answer to “What is another term for “current assets””. This question is standard in competitive examination syllabi for Engineering Economics.

P39.45 is the correct answer to “What is the ordinary interest on P1,500.50 for 182 days at 5.2%”. This question is standard in competitive examination syllabi for Engineering Economics.

Sinking fund method is the correct answer to “In what method of computing depreciation where it assumes that a sinking fund is established in which funds will accumulate for replacement purposes”. This question is standard in competitive examination syllabi for Engineering Economics.

Quick ratio is the correct answer to “What is another term for “acid-test ratio””. This question is standard in competitive examination syllabi for Engineering Economics.

Supply is the correct answer to “What refers to the amount of a product made available for sale”. This question is standard in competitive examination syllabi for Engineering Economics.

Rate of interest is the correct answer to “What refers to the cost of borrowing money or the amount earned by a unit principal per unit time”. This question is standard in competitive examination syllabi for Engineering Economics.

Perfect competition is the correct answer to “What is the market situation exist when there are many buyers and many sellers”. This question is standard in competitive examination syllabi for Engineering Economics.

$$1$$ is the correct answer to “The product of CAF (SP) and PWF (SP) is:”. This question is standard in competitive examination syllabi for Engineering Economics.

All of these is the correct answer to “In a cash-flow diagram:”. This question is standard in competitive examination syllabi for Engineering Economics.

Fixed asset is the correct answer to “Lands, buildings, plants and machineries are example of what type of asset”. This question is standard in competitive examination syllabi for Engineering Economics.

Common stock is the correct answer to “What represents the ownership of stockholders who have a residual claim on the assets of the corporation after all other claims have been settled”. This question is standard in competitive examination syllabi for Engineering Economics.

P 19,624.49 is the correct answer to “The institute of Electronics and Communications Engineers of the Philippines (IECEP) is planning to put up its own building. Two proposals being considered are: A. The construction of the building now to cost P 400,000 B. The construction of a smaller building now to cost P300,000 and at the end of 5 years, an extension to be added to cost P 200,000. By how much is proposal B more economical than proposal A if interest rate is 20% and depreciation to be neglected”. This question is standard in competitive examination syllabi for Engineering Economics.

Equity is the correct answer to “What refers to the residual value of a company’s assets after all outside liabilities (shareholders excluded) have been allowed for”. This question is standard in competitive examination syllabi for Engineering Economics.

Interest is the correct answer to “What refers to the amount of money paid for the use of borrowed capital”. This question is standard in competitive examination syllabi for Engineering Economics.

The stock holders of the corporation are only liable to the extent of their investments. is the correct answer to “Which is true about corporation”. This question is standard in competitive examination syllabi for Engineering Economics.

It can be handed down from one generation of partners to another. is the correct answer to “Which is true about partnership”. This question is standard in competitive examination syllabi for Engineering Economics.

Rate of return is the correct answer to “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”. This question is standard in competitive examination syllabi for Engineering Economics.

First cost + cost of perpetual maintenance is the correct answer to “Capitalized cost of any structure or property is computed by which formula”. This question is standard in competitive examination syllabi for Engineering Economics.

Acid-Test (or Quick) ratio is the correct answer to “The more critical (or severe) test of the firm's liquidity can be judged by:”. This question is standard in competitive examination syllabi for Engineering Economics.

All of these is the correct answer to “In a cash flow series:”. This question is standard in competitive examination syllabi for Engineering Economics.

P 236.20 is the correct answer to “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”. This question is standard in competitive examination syllabi for Engineering Economics.

12 months is the correct answer to “The monthly demand for ice cans being manufactured by Mr. Camus is 3200 pieces. With a manual operated guillotine, the unit cutting cost is P25.00. An electrically operated hydraulic guillotine was offered to Mr. Camus at a price of P275,000.00 and which cuts by 30% the unit cutting cost. Disregarding the cost of money, how many months will Mr. Camus be able to recover the cost of the machine if he decides to buy now”. This question is standard in competitive examination syllabi for Engineering Economics.

To keep the project cost within the cost budget and knowing when and where job costs are deviating is the correct answer to “The key to profitable operation for project cost control, is:”. This question is standard in competitive examination syllabi for Engineering Economics.

Cost accounting is the correct answer to “What is an accounting term that represents an inventory account adjustment”. This question is standard in competitive examination syllabi for Engineering Economics.

$$\frac{{{\text{Current assets}}}}{{{\text{Current liabilities}}}}$$ is the correct answer to “Current ratio is:”. This question is standard in competitive examination syllabi for Engineering Economics.

360 is the correct answer to “Under ordinary simple interest, how many days in one year”. This question is standard in competitive examination syllabi for Engineering Economics.

Journal is the correct answer to “The original record of a business transaction is recorded in this book.”. This question is standard in competitive examination syllabi for Engineering Economics.

Unit method and percentage method is the correct answer to “What are the common methods of computing depletion charge”. This question is standard in competitive examination syllabi for Engineering Economics.

P 2,504.57 is the correct answer to “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”. This question is standard in competitive examination syllabi for Engineering Economics.

P 9,250.00 is the correct answer to “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%.”. This question is standard in competitive examination syllabi for Engineering Economics.

P 1,185.54 is the correct answer to “What annuity is required over 12 years to equate with a future amount of P 20,000? Assume i= 6% annually.”. This question is standard in competitive examination syllabi for Engineering Economics.

All of these is the correct answer to “Both architect and engineer make use of the cost estimate of the project:”. This question is standard in competitive examination syllabi for Engineering Economics.

Capitalized cost is the correct answer to “What refers to the present worth of cost associated with an asset for an infinite period of time”. This question is standard in competitive examination syllabi for Engineering Economics.