MESL - Engineering Economy

The ratio of the interest payment to the principal for a given unit of time and is usually expressed as a percentage of the principal is known as:

interest rate

An increase in the value of a capital asset is called

A. Capital gain

The reduction in the money value of a capital asset is called

A. Capital loss

It is negotiable claim issued by bank in lieu of a team deposit.

A. Certificate of deposit

Any particular raw materials or primary product (e.g. cloth, wool, flour, coffee..) is called

A. Commodity

If denotes the fall in the exchange rate of one currency in terms of others. The term usually applies to floating exchange rates.

A. Currency depreciation

A type of bond whose guaranty is in lien on railroads equipments.

A. Equipment obligation bond

Land buildings, plants and machinery are examples of

A. Fixed assets

If the security of the bond is a mortgage on certain specified asset of a corporation, this bond is classified as

A. Mortgage bond

A type of bond where the corporation's owners name are recorded and the interest is paid periodically to the owners with their asking for it.

A. Registered bond

The first cost of any property includes

A. installation expenses B. original purchase price and freight and transportation charges C. initial taxes and permits' fee

What must two investments with the same present worth and unequal lives have?

Different salvage returns

The personnel required for a mechanical plant with 500 kW capacities is "

RME

Total amount spent on a physical property until the property is put in operation.

First cost

A type of bond issued jointly by two or more corporations.

Joint bond

As applied to capitalized asset, the contribution of the initial cost by periodic changes to operation as in depreciation of the reduction of the depth by either periodic or irregular prearranged program is called:

amortization

The term used to express the series of uniform payments occurring at equal interval of time is:

annuity

A type of annuity where the payments are made at the start of each period, beginning from the first period.

annuity due

A document that shows proof of legal ownership of a financial security.

bond

A form of fixed-interest security issued by central or local governments, companies, banks and other institutions. They are usually formed of long-term security, but maybe irredeemable, incurred or unsecured.

bonds

The recorded current value of an asset is known as:

book value

The worth of a property which is equal to the original cost less depreciation.

book value

Funds supplied by others on which a fixed rate of interest must be paid and the debt be repaid at a specific place and time.

borrowed capital

The length of time during which it is capable of performing the function for which it was designed and manufactured.

business life

Under the law is the ability of a person to take a recognized legal action. Also, it is natural power or competency to perform an act, as capacity to contract and ete.

capacity

It is a series of equal payment occurring at equal interval of time where the first payment is delayed after several periods, after the beginning of the payment

deferred annuity

The lessening of the value of an asset due to the decrease in the quantity available. This refers to the natural resources such as coal, oil, and timber in the forest.

depletion

Decrease in value of physical property due to the passage of time.

depreciation

The term used to define the loss in the value of an asset due to its use or passage of time is:

depreciation

The amount of the company's profit that the Board of Directors of the corporation decides to distribute to ordinary shareholders.

dividend

The profit derived from a project business enterprise without consideration of obligations to financial contributors and claim of others based on profit is known as:

economic return

The exclusive right of a company to provide a specific product/service in a given region of the country.

franchise

That kind of obligation which has no condition attached?

gratuitous

Gross, profit, sales less cost of goods sold as a percentage of sales called

gross margin

The difference between sales revenue and the cost of goods sold.

gross profit

The place where currency traded in a foreign exchange market for which the demand is consistently high in relation to its supply

hard currency

These are products or services that are required to support human life and activities that will be purchased in somewhat the same quantity even though the price varies considerably.

necessities

A condition where only few individuals produce a certain product that action of one will lead almost the same action by the other.

oligopoly

The value of the stock as stated on the stock certificate.

par value

A situation in which rival firms drive prices down through attempts to undercut each other prices is called

price war

Which of the following terms is not related to ethics?

profitability

The amount earned by one unit of principal during a unit of time

rate of interest

The interest rate at which the present worth of cash flow on a project is zero, or the interest earned by an investment:

rate of return

The interest-earning fund in which equal deposits are made at equal intervals of time for the purpose of gradually accumulating a specific sum of money required at same future date.

sinking fond

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 at the end of the asset's estimated life is known as:

sinking fund method

A method of depreciation whereby the amount to recover is spread over the estimated life of the asset in terms of the periods or units of output is called:

straight line method