[GEAS] ENGINEERING ECONOMY

15. It is the profit derived from a project or business enterprise without i ' consideration of obligations to financial contributors or claims of other based on profit A. Economic return B. Expected yield C. Earning value D. Yield

: A

16. It is the interest rate at which the present worth of the cash flow on a project is zero of the interest earned by an investment A. Rate of return B. Effective rate C. Yield D. Nominal rate

: A

17. What is the method of depreciation whereby the amount to recover is spread over the estimated life of the asset in terms units of output? A. Service output B. Declining balance C. Sinking fund D. Straight line

: A

19. It is the method of depreciation where a fixed sum of money is regularly deposited at compound interest in a real or imaginary fund in order to accumulate an amount equal to the total depreciation of an asset's estimated life A. Sinking fund method B. Straight line C. Declining method D. SYD method

: A

21. What method is often used in municipal project evaluations where benefits and costs accrue to different segments of the community? A. Annual cost method B. Benefit cost ratio C. Rate of return method D. EUAC

: A

24. What is the reduction of the value of an asset due to constant use and passage of time? A. Depreciation B. Depletion C. Book value D. Scrap value

: A

29. As a business owner you have determined that the demand for your product is inelastiC. Based upon this assessment you understand that A. Increasing the price of your product will increase total revenue B. Decreasing the price of your product will increase total revenue C. Increasing the price of your product will have no effect on total revenue D. Increasing the price of your product will increase competition

: A

3. What is a market situation whereby there is only one buyer of an item for which there is no goods substitute? A. Monopsony B. Monopoly C. Oligopoly D. Oligopsony

: A

30. The law diminishing marginal utility states that A. Marginal utility will decline as a consumer acquires additional units of a specific 'product B. Total utility decline as a consumer acquires additional units of a specific product C. Declining utilities causes the demand curve to slope upward D. Consumers' want will diminish '„vith the passage of time

: A

33.is an association of two or more persons for a purpose of engaging in a profitable business A. Partnership B. Corporation C. Sole proprietorship D. Enterprise

: A

36. Consists of the actual counting or determination of the actual quantity of the materials on hands as of a given date: A. Physical inventory B. Material update C. Technological assessment D. Material count

: A

38. What is the type of annuity where payments continue infinitely? A. Perpetuity B. Deferred annuity C. Annuity due D. Ordinary annuity

: A

44. It is the pervasive and sustained rise in the aggregate level of prices measured by an index of the cost of various goods and services. A. Inflation B. Depreciation C. Devaluation Deflation

: A

45.is a type of bond which does not have security except a promise to pay by the issuing corporation A. Debenture B. Coupon bond C. Registered bond D. Collateral trust bond

: A

48. A certificate of indebtedness of a corporation usually for a period not less than ten years and guaranteed by a mortgage on certain assets of the corporation or its subsidiaries. A. Bond B. Trust C. Capitalized cost D. Collateral

: A

5. What is another term for perfect competition"? A. Atomistic competition B. No limit competition C. Free for all market D. Heterogenous market

: A

52. What technique is used to handle one of the non standard cash flow known as stepped cash flow? A. Superposition cash flow B. Uniform series cash flow C. Periodic method cash flow D. Projected cash flow

: A

53. A devices by which the real control of a company is transferred to an individual or a small group by an exchange of shares of stock for trust, certificates, which are issued by the individuals seeking control. A. Trust B. Cartel C. public utilities D. mergers

: A

57. YVhich of the following is true about deflation? A. It motivates consumers to borrow money B. It motivates businesses to make investments C. It results in very low interest rates D. It results in economic expansion

: A

63. It is a document that shows proof of legal ownership of a financial security A. Coupon B. Bank note C. Bond D. Check

: A

64. An improvement in technology that in turn leads to improved worker productivity would most likely result in A. A shift to the right supply curve and a lowering of the price of the output. B. A shift to the left in the supply curve and a lowering of the price of the output. C. An increase in the price of the output if demand is unchanged. D. Wage increase

: A

68. It is financial summary showing the relationship among assets, liabilities, and ownership in the corporation on a specific date A. Balance sheet B. Income tax return C. Accounting cost D. Book keeping records

: A

7. When one of the factors of production is fixed in quantity or is difficult to increase, increasing the other factors of production will result in a less than proportionate increase in output. This statement is known as the A. Law of diminishing return B. Law of supply C. Law of demand D. Law of supply and demand

: A

70. A legal instrument that pledges a house or other real estate as security repayment of a loan. A. Mortgage B. Collateral C. Annuity D. Amortization

: A

72. What is the ratio of the annual net profit to the amount of capital investment? A. Rate of return B. Gross income C. Working capital D. Net income

: A

75. What is the difference between sales revenue and the cost of goods sold? A. Gross profit B. Net income C. Gross national D. Rate of return

: A

78.is an agreed payment made to an owner of an industrial property right for the grant of an exclusive sell for profit of the item concerned A. Royalty B. Salary C. Commissions D. All of these

: A

8. It is defined as the future value minus the present value on a negotiable paper A. Discount B. Capital C. Rate of return D Interest

: A

80. What refers to an imaginary cost representing what will not be received if a particular strategy is rejected? A. Opportunity cost B. Ghost cost C. Horizon cost D. Null cost

: A

83. is the negotiation of wage rates, conditions of employment, etc. by representatives of the labor force and management A. Collective bargaining B. Union rally C. Union trade D. Cooperative

: A

88. Government borrowing to finance large deficits increases the demand for lendable funds and A. Increases the supply of lendable funds B. Has no impact on interests C. Exerts downwards pressure on interest rates D. Puts upward pressure on interest rates

: A

9. What do you call any particular raw material or primary product such as cloth, wool, flour, coffee, etc.? A. Utility B. Necessity C. Commodity D. Stock

: A

90. 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 A. Sole proprietorship B. Entrepreneurship C. Partnership D. Corporation

: A

93. An artificial expense that spreads the purchase price of an asset or another property over a number of years. A. Depreciation b. sinking fund c. amnesty d. bond

: A

1. Defined as the production and consumption of goods and services of a community regarded as a whole. A. Engineering economy B. Economy C. Market D. Market situation

: B

101. The ratio obtained by dividing 'quick assests' by current liabilities is called A. Turnovæ•r ratio B. Acid test ratio C. Sol'.vncy ratio D. None of these.

: B

101. ratio obtained by dividing •quick assests• by current liabilities is called A. Turnover ratio B. Acid test ratio C. Solvency ratio D. None of these.

: B

102. The estimate based on a detailed quantity survey and furnishes the most accurate and reliable estimate possible is knoWT1 as A- Conceptual estimate B. Definitive estimate C. Probabilistic estimate D. None

: B

102. The estimate based on a detailed quantity survey and furnishes the most accurate and reliable estimate possible is known as A. Conceptual estimate B. Definitive estimate C. Probabilistic estimate D. None of these

: B

2. What do you call the amount of property in which a willing buyer will pay to a willing seller for the property when neither one is under the compulsion to buy nor sell? A. Far value B. Market value C. Book value D. Goodwill value

: B

22. Which of the following market features is likely to cause a surplus of a particular product? A. A monopoly B. A price floor C. A price ceiling D. A perfect market

: B

32. An organization formed by producers whose purpose is to allocate market shares, control production, and regulates prices. Best example is the Organization of Petroleum Exporting Countries (OPEC). A. Trust B. Cartel C. Public utility D. Mergers

: B

34. A natural monopoly exists because A. The firm owns natural resources B. The firms hold patents C. Economic and technical conditions permit only one efficient supplier D. The government is the only supplier

: B

39. What is the feature of some bonds whereby the issuer can redeem it before it matures? A. Return clause B. Callability C. Recall clause D. Call clause

: B

4. What is the type of annuity where the payments are made at the start of its period, beginning from the first period? A. Deferred annuity B. Annuity due C. Ordinary annuity D. Perpetuity

: B

40. It is an example of intangible assets A. Cash B. Patents C. Investment in subsidiary companies D. Fixed assets

: B

41. The price at which the callable bond will be redeemed from the bondholder is called A. Par value B. Call value C. Face value D. Redemption value

: B

43.is a type of bond where the corporation pledges securities which it owns A. Mortgage bond B. Collateral trust bond C. Coupon bond D. Registered bond

: B

46. What type of bond whose guarantee is in lien on railroad equipment, such as freight and passenger cars, locomotives, etc.? A. Railroad bond B. Equipment obligation bond C. Equipment bond D. Equipment trust bond

: B

47. It is a fund created by setting aside regular sums for investments in order to repay a debt that will fall due at a future date. A. Straight line method B. Sinking fund method C. Declining balance method D. SYD method

: B

54. What is the increase in the value of a capital asset? A. Capital stock B. Capital gain C. Capital expenditure D. Profit

: B

6. It is the function of interest and time that determines the cumulative amount of a sinking fund resulting from specific periodic deposits A. Present worth factor B. Sinking fund factor C. Demand factor D. Capacity factor

: B

61. Property or goods used as security against a loan and forfeited if the loan is not repaid. A. Mortgage B. Collateral C. Annuity D. Amortization

: B

62. Marginal revenue is A. Equal to price in monopolistic competition B. The change in total revenue associated with increasing prices C. Greater than price in pure competition D. The change in total revenue associated with producing and selling one more unit

: B

66. In case bankruptcy a partnership A. The partners are not liable for the liabilities of the partnership B. The partners personal assets are attached to the debt of the partnership C. The partners may sell stock to generate additional capital D. The partnership assets only will be used to pay the liabilities

: B

76. It represents the ownership, and enjoys certain preference than ordinary stock A. Incorporation's stock B. Preferred stock C. Authorized stock D. Common stock

: B

79. This bond gives the bondholder the right to exchange the bond for shares of the issuer's common stock at a specified date. A. Floating-rate bond B. Convertible bond C. Callable bond D. Zero-coupon bond

: B

85.is obtained by setting the sum of the values on a certain comparison or focal date of one set of obligations equal to the sum of the values on the same date ofanother set of obligations A. Disbursement B. Equation of value C. Equation of state D. Focal date

: B

87. The book value where the original accounts are recorded is called A. Balance sheet B. Journal C. Folio D. Ledger

: B

96. In accounting, it is the process of allocating in a systematic and rational manner the cost of a capital asset over the period of its useful life. A. Inflation B. Depreciation C. Devaluation D. Deflation

: B

12. If both the supply and the demand for a good increase, the market price will A. Rise only the case of inelastic supply function B. Fall only in the case of inelastic supply function C. Not be predictable veith only these facts D. Rise only in the case of an inelastic demand function

: C

14. It is the flow back of profit plus depreciation from a given project A. Earning value B. Economic return C. Cash flow D. Capital recovery

: C

18. It is a kind of monopoly in vvhich an industry produces goods and provides services vital to the public well-being, including such essentials as water, power, transport and communications. A. Trusts B. Canels C. Public utility D. Mergers

: C

25. What refers to the money value of an event, based on the earning power of equivalent invested funds capital should or will earn? A. Present worth factor B. Interest rate C. Time value of money D. Yield

: C

27. What is the term for an annuity with a fixed time span? A. Ordinary annuity B. Perpetuity C. Annuity certain D. Annuity due

: C

28. It is an official act reducing the rate at which one currency is exchanged for another in international currency markets. A. Inflation B. Depreciation C. Devaluation D. Deflation

: C

31. What is the simplest form of business organization? A. Partnership B. Corporation C. Sole Proprietorship D. Enterprise

: C

42. It is a form of fixed r— interest security issued by central or local governments, companies, banks, or other institutions. They are usually a form of long — term security but may be irredeemable A. Bonds B. Certificate of all deposits C. T- bills D. All of these

: C

49. What is the type of bond issued jointly by two or more corporations? A. Collateral trust bond B. Debenture bond C. Joint bond D. Registered bond

: C

50. Price ceilings A. Are illustrated by government price support programs in agriculture. B. Create prices greater than equilibrium prices C. Create prices below equilibrium prices D. Result in persistent surpluses

: C

51. The corporation's owner name is recorded and the interest is paid periodically to the owners with their asking for it is known as A. Preferred bond B. Incorporator's bond C. Registered bond D. All ofthese

: C

59. In the long run, a firm may experience increasing returns due to A. Law of diminishing returns B. Opportunity costs C. Comparative advantage D. Economies of scale

: C

65. It is defined as the sum of the first cost and the present costs ofperpetual replacement, operation and maintenance. A. Bond B. Depreciation C. Capitalized cost D. Collateral

: C

67. Which is true about corporations? A. The minimum number of incorporators to start a corporation is three B. It is not best for business organization C. The stockholders of the corporation only liable to the extent of their investments D. The life is dependent on the lives of the incorporators

: C

69. X and Y are substitute products. If the price of the product Y increases, the immediate impact on product X is A. Price will increase B. Quantity demanded will increase C. Quantity supplied will increase D. Price, quantity demanded, and supply will increase

: C

71. A valid reason for the govemment to intervene in the wholesale electrical power market would include which one of the following? A. A price increase that is more than expected. B. Electricity is an essential resource and the wholesale market is not competitive. C. The electricity distribution companies are losing money. D. Foreign power generators have contracts with the local government at very high prices.

: C

74. What refers to the claim of anyone to ownership? A. Proprietorship B. Assets C. Equity D. Liability

: C

82. "Under conditions of perfect competition the price at which a given product will be supplied and purchased is the price that will result in the supply and the demand being equal." A. Law of Supply B. Lav,' of Demand C. Law of Supply and Demand D. Law of Diminishing Return

: C

84. It is an economic system based on the private ownership of the means of production and distribution of goods, characterized by a free competitive market and motivation by profit. A. Perfect competition B. Monopoly C. Capitalism D. Monopsony

: C

86. The depreciation o f an asset using percentages of the amount of its remaining depreciated value in each period rather than its original value. A. Straight line method B. Sinking fund method C. Declining balance method D. Double declining balance method

: C

95. What is the process of determining the value of certain property? A. Appraiser B. Booking C. Appraisal D. Evaluation

: C

I I . It is the amount that a seller could expect to obtain for property or goods sold on the open market. A. Face value B. Bond value C. Market value D. Fair value

: C

10. It is the amount of money aid for the use of borrowed capital or the income produced by money which has been loaned. A. Product B. Principal C. Price D. Interest

: D

13. It is the amount that both buyer and seller vvillingly agree to when neither party is under undue pressure to complete the transaction. A. Face value B. Bond value C. Price D. Fair value

: D

20. Which of the following methods of computing depreciation is usually used if the depreciation is a function of time? A. Capital — recovery — production method B. Period production method C. Time — of— production method D. Units — of— production method

: D

23. What refers to the present worth of the probable future net earnings? A. Total fair value B. Total market value C. Going concern value D. Earning value

: D

26. It is a condition where only few individual produce a certain product that action of one will lead to almost the same action by the other A. Monopoly B. Semi monopoly C. Perfect competition D. Oligopoly

: D

37. What refers to the present worth of all the amounts the bondholder will receive through his possession of the bond? A. Par value of bond B. Face value of bond C. Redeemed value of bond D. Value of bond

: D

55. What refers to the value of an intangible item '„vhich arises from the exclusive right of a company to provide a specified product and service in a certain region of the country? A. Company value B. Going value C. Goodwill value D. Franchise value

: D

58. The first cost to be incurred if the piece of equipment no'tv in place had been bought for a second hand dealer or some other business is called A. Material cost B. Fixed cost C. First cost D. In place value

: D

60.is the amount of company's profits that the board of directors of the corporation decides to distribute to ordinary shareholders A. Par value B. Share of stock C. Return D. Dividend

: D

73. It involves a sustained decline in the aggregate level of prices. It is usually associated with a prolonged erosion of economic activity and high unemployment. A. Inflation B. Depreciation C. Devaluation D. Deflation

: D

77. An intangible value which is actually operating concern has due to its operation A. Scrap value B. Book value C. Salvage v.alue D. Going value

: D

81 . A market that deals in long term company securities (stocks and shares) and government securities (bonds) is called A. Test market B. Share market C. Super market D. Stock market

: D

89. It is the point where the cost of an order will approximately compensate with inventory carrying cost A. Break even point B. Safety stock C. Shot down point D. Economic order quantity

: D

91. is the element of value which a business has earned through the favorable consideration and patronage of its customers arising from its well known and 'vvell conducted policies and operations A. Status of company B. Big income C. Known 0'vvners D. Goodwill

: D

92. Which of the following is not among the four kinds of monopolies? A. Public utilities B. Trusts C. Cartels D. Unions

: D

94. If a group of consumers decide to boycott a particular product, the expected result would be A. An increase in the product price to make up lost revenue B. A decrease in the demand for the product C. An increase in product supply because of increased availability D. That demand for the product would become completely inelastic

: D

56. A negotiable claim issued by a bank in lieu of a term deposit is called A. Certificate of deposit B. Capital gain C. Bond D. Time deposit

: a