Engineering Economy Mcqs – (Civil Engineering) MCQs Latest For FPSC, PPSC, NTS, KPPSC, SPSC & Other Tests
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What type of bond is issued jointly by two or more corporations ?
A. Tie-up bond
B. Joint bond
C. Mortgage bond
D. Trust bond
What type of bond whose guaranty is in lien on railroad equipment, such as freight and passenger cars, locomotives, etc ?
A. Equipment bond
B. Equipment obligation bond
C. Railroad bond
D. Equipment trust bond
A type of bond to which are attached coupons indicating the interest due and the date when such interest is to be paid is called ____________________?
A. Mortgage bond
B. Coupon bond
C. Registered bond
D. Collateral trust bond
What bond whose security is a mortgage on certain specified assets of the corporation ?
A. Debenture bond
B. Collateral trust bond
C. Mortgage bond
D. Registered bond
A bond without any security behind them except a promise to pay by the issuing corporation is called __________________?
A. Trust bond
B. Debenture bond
C. Joint bond
D. Common bond
A type of bond where the corporation pledges securities which it owns such as the stock or bonds of one of its subsidiaries ?
A. Joint bond
B. Mortgage bond
C. Security bond
D. Collateral trust bond
What type of bond where the corporation’s owner name are recorded and the interest is paid periodically to the owners with their asking for it ?
A. Incorporators bond
B. Registered bond
C. Preferred bond
D. Callable bond
What type of bond which can be redeemed before maturity date ?
A. Registered bond
B. Preferred bond
C. Incorporators bond
D. Callable bond
What is the feature of some bonds whereby the issuer can redeem it before it matures ?
A. Recall clause
B. Callability
C. Return clause
D. Call class
The price at which the callable bond will be redeemed from the bondholder is called ____________________?
A. Face value
B. Call value
C. Par value
D. Redemption value
What is defined as the reduction or fall of the value of an asset due to constant use and passage of time ?
A. Inflation
B. Depletion
C. Depreciation
D. Deflation
In what method of computing depreciation where it assumes that the loss in value is directly proportional to the age of the equipment or asset ?
A. Straight line method
B. Declining balance method
C. Sum-of-year digit method
D. Sinking fund method
In what method of computing depreciation where it assumes that a sinking fund is established in which funds will accumulate for replacement purposes ?
A. Declining balance method
B. Sinking fund method
C. Sum-of-year digit method
D. Straight line method
In what method of computing depreciation where it assumes that the annual cost of depreciation is a fixed percentage of the book value at the beginning of the year ?
A. Sinking fund method
B. Straight line method
C. Sum-of-year digit method
D. Declining balance method
The declining balance method is also known as ____________________?
A. Modified SYD method
B. Constant percentage method
C. Modified sinking fund method
D. Double percentage method
What type of depreciation is due to the reduction in the demand for the function that the equipment or asset was designed to render ?
A. Functional depreciation
B. Physical depreciation
C. Design depreciation
D. Demand depreciation
What type of depreciation is due to the reduction of the physical ability of an equipment or asset to produce results ?
A. Design depreciation
B. Functional depreciation
C. Physical depreciation
D. Demand depreciation
The functional depreciation is sometimes called ____________________?
A. Life depreciation
B. Adolescence
C. Demand depreciation
D. Failure depreciation
What is defined as the reduction of the value of certain natural resources such as mines, oil, timber, quarries, etc. due to the gradual extraction of its contents ?
A. Depletion
B. Depreciation
C. Inflation
D. Deflation
What are the common methods of computing depletion charge ?
A. Conservative method and conventional method
B. Rational method and irrational method
C. Unit method and percentage method
D. Discrete method and depletion allowance method
Under the depletion allowance method in computing depreciation, the depletion charge is equal to either ________________ which ever is smaller ?
A. 50% of the fixed percentage of gross income or the net taxable income
B. Fixed percentage of gross income or 50% of the net taxable income
C. 50% of the fixed percentage of gross income or 50% of the net taxable income
D. Fixed percentage of gross income or the net taxable income
The depletion allowance method of computing depletion is commonly known as ___________________?
A. Factor method
B. Percentage method
C. Unit method
D. Sinking fund method
What is another term for “unit method” for computing depletion ?
A. Percentage method
B. Initial cost method
C. Factor method
D. Sinking fund method
Using factor method, the depletion at any given year is equal to ?
A. Initial cost of property times number of unit sold during the year divided by the total units in property
B. Initial cost of property divided by the number of units sold during the year
C. Initial cost of property divided by the total units in property
D. Initial cost of property times number of units sold during the year
What do you call the after-tax present worth of all depreciation effects over the depreciation period of the asset ?
A. Period recovery
B. Depreciation recovery
C. Asset recovery
D. After-tax recovery
A mathematical expression also known as the present value of annuity of one is called ____________________?
A. Demand factor
B. Load factor
C. Sinking fund factor
D. Present worth factor
The amount of property in which a willing buyer to a willing seller for the property when neither one is under the compulsion to buy nor to sell is called __________________?
A. Good will value
B. Market value
C. Fair value
D. Book value
Salvage value is sometimes known as _____________________?
A. Going value
B. Scrap value
C. Junk value
D. Second-hand value
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 ?
A. Market value
B. Book value
C. Fair value
D. Franchise value
What refers to the value of an intangible item which arises from the exclusive right of a company to provide a specified product and service in a certain region of the country ?
A. Going value
B. Company value
C. Goodwill value
D. Franchise value
The first cost to be incurred if the piece of equipment now in place had been bought for a second hand dealer or some other business is called ____________________?
A. First cost
B. Fixed cost
C. Material cost
D. In-place value
In computing depreciation of an equipment, which of the following represents the first cost ?
A. The original purchase price and freight charges
B. Initial taxes and permit fees
C. Installation expenses
D. All of the above
The process of determining the value or worth of a physical property for specific reason is called ____________________?
A. Economy
B. Valuation
C. Investment
D. Depletion
The unrecovered depreciation which results due to poor estimates as to the life of the equipment is called _____________________?
A. Sunk cost
B. Annuity
C. In-place value
D. Economic life
What refers to the present worth of cost associated with an asset for an infinite period of time ?
A. Increment cost
B. Annual cost
C. Capitalized cost
D. Operating cost
Capitalized cost of a project is also known as ____________________?
A. Life cost
B. Life cycle cost
C. Infinite cost
D. Project cost
What is normally used to compare alternatives that accomplish the same purpose but have unequal lives ?
A. Present worth method
B. Capitalized cost method
C. Annual cost method
D. MARR
What method is often used in municipal project evaluations where benefits and costs accrue to different segments of the community ?
A. EUAC
B. Benefit-cost ratio
C. Rate of return method
D. Annual cost method
What refers to an imaginary cost representing what will not be received if a particular strategy is rejected ?
A. Opportunity cost
B. Horizon cost
C. Ghost cost
D. Null cost
What is the main reason why the sinking fund method of computing depreciation is seldom used in the industry ?
A. The initial deprecation is high
B. Rate of interest cannot be exactly determined
C. Unstable economy
D. The initial depreciation is low
What is the factor name of the formula (1+i)^-n ?
A. Capital recovery
B. Uniform gradient future worth
C. Single payment present worth
D. Single payment compound amount
What is the factor name of the formula [i(1+i)^n]/[((1+i)^n)-1] ?
A. Single payment present worth
B. Capital recovery
C. Uniform series sinking fund
D. Uniform gradient future worth
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. Partnership
C. Entrepreneurship
D. Corporation
What is the simplest form of business organization ?
A. Sole proprietorship
B. Enterprise
C. Partnership
D. Corporation
Double taxation is a disadvantage of which business organization ?
A. Partnership
B. Sole proprietorship
C. Corporation
D. Enterprise
In case of bankruptcy of a partnership________________?
A. The partners nay sell stock to generate additional capital
B. The partnership assets (excluding the partners personal assets) only will be used to pay the liabilities
C. The partners personal assets are attached to the debt of the partnership
D. The partners are not liable for the liabilities of the partnership
Which is true about partnership ?
A. Its capitalization must be equal for each partner
B. It will be dissolved if one of the partners ceases to be connected with the partnership
C. It can be handed down from one generation of partners to another
D. It has a perpetual life
Which is true about corporation ?
A. Its life is dependent on the lives of the incorporators.
B. The minimum number of incorporators to start a corporation is three.
C. It is worse type of business organization.
D. The stock holders of the corporation are only liable to the extent of their investments.
An association of two or more persons for the purpose of engaging into a business for profit is called ____________________?
A. Proprietorship
B. Partnership
C. Entrepreneurship
D. Corporation
Aggregation of individuals formed for the purpose of conducting a business and recognized by law as a fictitious person is called ________________________?
A. Investors
B. Partnership
C. Corporation
D. Stockholders
What represents the ownership of stockholders who have a residual claim on the assets of the corporation after all other claims have been settled ?
A. Preferred stock
B. Authorized capital stock
C. Incorporator stock
D. Common stock
What stock represents ownership and enjoys certain preferences than ordinary stock ?
A. Incorporator’s stock
B. Preferred stock
C. Authorized stock
D. Presidential stock
The amount of company’s profit that the board of directors of the corporation decides to distribute to ordinary shareholders is called ___________________?
A. Dividend
B. Equity
C. Share of stock
D. Return
What refers to the residual value of a company’s assets after all outside liabilities (shareholders excluded) have been allowed for ?
A. Return
B. Equity
C. Dividend
D. Par value
What refers to the claim of anyone to ownership ?
A. Assets
B. Proprietorship
C. Equity
D. Liability
Cash money and credit necessary to establish and operate an enterprise are generally called _____________________?
A. Capital
B. Assets
C. Funds
D. Liabilities
What represents the share of participation in business organizations?
A. Partnership
B. Franchise
C. Stock
D. Corporation
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 _____________________?
A. Earning value
B. Economic return
C. Yield
D. Gain
__________________ is the element of value which a business has earned through the favorable consideration and patronage of its costumers arising from its well known and well conducted policies and operations?
A. Big income
B. Status company
C. Known owners
D. Goodwill
Which of the following is an example of intangible asset ?
A. Furnitures
B. Investment in subsidiary companies
C. Cash
D. Patents
Lands, buildings, plants and machineries are example of what type of asset ?
A. Trade investment asset
B. Current asset
C. Fixed asset
D. Intangible asset
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 ?
A. Yield
B. Economic return
C. Rate of return
D. Return of investment
What is another term for “current assets” ?
A. Non-liquid assets
B. Fixed assets
C. Liquid assets
D. Cash
What is an accounting term that represents an inventory account adjustment ?
A. Cost of goods sold
B. Standard cost
C. Cost accounting
D. Overhead cost
What is the change in cost per unit variable change called ?
A. Fixed cost
B. Incremental cost
C. Variable cost
D. Supplemental cost
What is used to record historical financial transactions ?
A. Bookkeeping system
B. Balance check
C. Ledger system
D. General journal system
What is a secondary book of accounts, the information of which is obtained from the journal is called ?
A. Worksheet
B. Ledger
C. Balanced sheet
D. Trial balance
The original record of a business transaction is recorded in this book_____________?
A. Ledger
B. Journal
C. Work book
D. Account book
All the proceeds which are received by the business as a result of the sale of goods is called _________________?
A. Net income
B. Gross income
C. Total sales
D. Net revenue
All are classified under direct labor expenses EXCEPT one. Which one ?
A. Testing cost
B. Inspection cost
C. Assembly cost
D. Supervision cost
What is a measure of the average speed with which accounts receivable are collected ?
A. Current ratio
B. Acid test ratio
C. Quick ratio
D. Receivable turnover
The ratio of the net income before taxes to net sales is called __________________?
A. Inventory turnover
B. Current ratio
C. Profit margin ratio
D. Price-earnings ratio
What do you call a one-time credit against taxes ?
A. Credible credit
B. Tax credit
C. Due credit
D. Revenue credit
What is used when a quick estimate of the doubling time for the invested money is needed ?
A. Rule of 36
B. Rule of 48
C. Rule of 24
D. Rule of 72
What is the increase in the money value of a capital asset is called?
A. Capital stock
B. Capital gain
C. Capital expenditure
D. Profit
What is the reduction in the money value of capital asset is called ?
A. Loss
B. Capital loss
C. Capital expenditure
D. Deficit
What refers to the negotiable claim issued by a bank in lien of a term deposit ?
A. Bond
B. Time deposit
C. Capital gain certificate
D. Certificate of deposit
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______________?
A. Currency devaluation
B. Currency depreciation
C. Currency appreciation
D. Currency float
The deliberate lowering of the price of a nation’s currency in terms of the accepted standard (Gold, American dollar or the British pound) is known as ____________________?
A. Currency depreciation
B. Currency appreciation
C. Currency devaluation
D. Currency float
What refers to the saving which takes place because goods are not available for consumption rather than consumer really want to save ?
A. Consumer saving
B. Compulsory saving
C. Forced saving
D. All of the above
The flow back of profit plus depreciation form a given project is called ___________________?
A. Economic return
B. Cash flow
C. Capital recovery
D. Earning value
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 ___________________?
A. Capital recovery
B. Amortization
C. Annuity
D. Annuity factor
Capitalized cost of any structure or property is computed by which formula ?
A. Annual cost – interest of first cost
B. First cost + interest of first cost
C. First cost + cost of perpetual maintenance
D. First cost + salvage value
The true value of interest rate computed by equations for compound interest for a 1 year period is known as __________________?
A. Nominal interest
B. Expected return
C. Effective interest
D. Economic return
Return on investment ratio is the ratio of the_____________?
A. Net income to owner’s equity
B. Net credit sales to average net receivable
C. Cost of goods sold to average cost of inventory at hand
D. Market price per share to earnings per share
Gross margin is the ratio of the gross profit to _________________?
A. Net sale
B. Inventory turnover
C. Owner’s equity
D. Quick assets
What is another term for “acid-test ratio” ?
A. Profit margin ratio
B. Quick ratio
C. Current ratio
D. Price-earnings ratio
What is a government bond which has an indefinite life rather than a specific maturity ?
A. T-bill
B. Coupon
C. Debenture
D. Consol
A form of business firm which is owned and run by a group of individuals for their mutual benefit is called ___________________?
A. Cooperative
B. Enterprise
C. Corporation
D. Partnership
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 ?
A. Hoard stock
B. Stock pile
C. Buffer stock
D. Withheld stock
The ability to meet debts as they become due is known as __________________?
A. Solvency
B. Insolvency
C. Leverage
D. Liquidity
The ability to convert assets to cash quickly is known as ________________?
A. Leverage
B. Liquidity
C. Solvency
D. Insolvency
What is the basic accounting equation ?
A. Assets = liability + owner’s equity
B. Owner’s equity = assets + liability
C. Liability = assets + owners’ equity
D. Owner’s equity = liability – assets
The financial health of the company is measured in terms of______________?
A. Solvency
B. Liquidity
C. Relative risk
D. All of the above
What is an index of short-term paying ability ?
A. Profit margin ratio
B. Current ratio
C. Price-earnings ratio
D. Gross margin
The common ratio is the ratio of_______________?
A. Net credit sales to average net receivable
B. Current assets to current liabilities
C. Net income to owner’s equity
D. Gross profit to net sales
What is defined as the current assets minus inventories and prepaid expenses ?
A. Price-earnings ratio
B. Profit margin ratio
C. Return of investment ratio
D. Quick ratio