The common ratio is the ratio of:

Current assets to current liabilities

Capitalized cost of any structure or property is computed by which formula?

First cost + cost of perpetual maintenance

Which is true about corporation?

Its stock holders are only liable to the extent of their investments.

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Engineering Economy Set 1 Examveda

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1
The declining balance method is also known as
Modified SYD method
Modified sinking fund method
Constant percentage method
Double percentage method
2
The common ratio is the ratio of:
Gross profit to net sales
Current assets to current liabilities
Net income to owner’s equity
Net credit sales to average net receivable
3
See image
Law of Diminishing Return
Law of Supply and Demand
Law of Supply
Law of Demand
4
Both architect and engineer make use of the cost estimate of the project:
For choosing alternatives
For site selection
All of the above
For designing of the project
5
What type of depreciation is due to the reduction of the physical ability of an equipment or asset to produce results?
Physical depreciation
Functional depreciation
Demand depreciation
Design depreciation
6
Cash money and credit necessary to establish and operate an enterprise are generally called ______.
Capital
Liabilities
Funds
Assets
7
See media
Preferred bond
Registered bond
Incorporators bond
Callable bond
8
See media.
Simple interest
Effective rate of interest
Compound interest
Nominal rate of interest
9
What market situation exists where there is only one buyer and only one seller?
Bilateral monopoly
Monopsony
Monopoly
Bilateral monopsony
10
A bond where the corporation pledges securities which it owns such as the stock or bonds of one of its subsidiaries
Joint bond
Collateral trust bond
Mortgage bond
Security bond
11
The process of determining the value or worth of a physical property for specific reason is called ______.
Economy
Depletion
Investment
Valuation
12
In a cash flow series:
An increase or decrease in the amount of a cash flow is called the gradient
All of these
The gradient in the cash flow may be positive or negative
Uniform gradient denotes that an income changes by same amount in each IP
13
What do you call the after‐tax present worth of all depreciation effects over the depreciation period of the asset?
After-tax recovery
Depreciation recovery
Period recovery
Asset recovery
14
The ratio obtained by dividing 'quick assets' by current liabilities is called
Acid test ratio
None of these
Solvency ratio
Turnover ratio
15
In a cash‐flow diagram:
All of these
Time 1 is considered to be the end of time period 1
Time 0 is considered to be the present
A vertical arrow pointing up indicates a positive cash flow
16
An association of two or more persons for the purpose of engaging into a business for profit is called ______.
Proprietorship
Entrepreneurship
Corporation
Partnership
17
What is another term for “current assets”?
Fixed assets
Cash
Liquid assets
Non-liquid assets
18
Ownership of stockholders who have a residual claim on the assets of the corporation after settling all other claims
Authorized capital stock
Preferred stock
Common stock
Incorporator stock
19
See image
Depreciation
Depletion
Deflation
Inflation
20
The ability to meet debts as they become due is known as
Leverage
Solvency
Liquidity
Insolvency
21
What bond whose security is a mortgage on certain specified assets of the corporation?
Debenture bond
Collateral trust bond
Registered bond
Mortgage bond
22
The depletion allowance method of computing depletion is commonly known as
Factor method
Percentage method
Sinking fund method
Unit method
23
All the proceeds which are received by the business as a result of the sale of goods is called ______.
Total sales
Gross income
Net income
Net revenue
24
Saving which takes place because goods are not available for consumption rather than consumer really want to save
Compulsory saving
Forced saving
All of the above
Consumer saving
25
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Book Value
Franchise Value
Market Value
Fair Value
26
What is the term for an annuity with a fixed time span?
Perpetuity
Annuity Due
Ordinary Annuity
Annuity Certain
27
Aside from many sellers and many buyers, which one is a characteristic of perfect competition?
Perfect information and absence of all economic friction
Free market entry and exit
Homogeneous product
All of the above
28
The original record of a business transaction is recorded in this book.
Work book
Journal
Ledger
Account book
29
'a’-base amount expenditure, ‘b’-increase in the operation cost each year, 'n’-years, the total cost of maintenance is:
a × (n - 1) b
a + (n - 1) b
a - (n - 1) b
a + (n + 1) b
30
What is the market situation exist when there are many buyers and many sellers?
Perfect competition
Oligopoly
Monopoly
Oligopsony
31
What is an index of short‐term paying ability?
Gross margin
Profit margin ratio
Current ratio
Price-earnings ratio
32
The first cost to be incurred if the piece of equipment now in place had been bought for a second hand dealer or other.
Fixed cost
Material cost
In-place value
First cost
33
The alternatives which are standalone solutions for given situations in engineering involve:
All of these
The anticipated life of the assets
A purchase cost (first cost)
The anticipated resalable value (salvage value) and the interest return
34
Capitalized cost of any structure or property is computed by which formula?
Annual cost – interest of first cost
First cost + cost of perpetual maintenance
First cost + interest of first cost
First cost + salvage value
35
The more critical (or severe) test of the firm's liquidity can be judged by:
Current ratio
Liquidity ratio
Debts ratio
Acid-Test (or Quick) ratio
36
See media
Annuity factor
Annuity
Amortization
Capital recovery
37
The true value of interest rate computed by equations for compound interest for a 1 year period is known as
Nominal interest
Economic return
Expected return
Effective interest
38
The unrecovered depreciation which results due to poor estimates as to the life of the equipment
Sunk cost
Economic life
In-place value
Annuity
39
See media
Oligopsony
Oligopoly
Perfect competition
Monopoly
40
The flow back of profit plus depreciation form a given project is called ______.
Cash flow
Economic return
Earning value
Capital recovery
41
What is the opposite of perfect competition?
Oligopoly
Monopoly
Oligopsony
Monopsony
42
Salvage value is sometimes known as
Junk value
Second-hand value
Scrap value
Going value
43
A bond without any security behind them except a promise to pay by the issuing corporation is called ______.
Common bond
Trust bond
Joint bond
Debenture bond
44
Aggregation of individuals formed for the purpose of conducting a business and recognized by law as a fictitious person.
Investors
Partnership
Corporation
Stockholders
45
Present worth Annuity (PWA) is generally known as
Premium annuities
Future annuities
Income annuities
All of these
46
Which is true about corporation?
The minimum number of incorporators to start a corporation is three.
Its life is dependent on the lives of the incorporators.
Its stock holders are only liable to the extent of their investments.
It is worse type of business organization.
47
The difference between the present and future worth of money at some time in the future is called ______.
Depletion
Inflation
Discount
Deduction
48
What is another term for “acid‐test ratio”?
Price-earnings ratio
Current ratio
Quick ratio
Profit margin ratio
49
What is the feature of some bonds whereby the issuer can redeem it before it matures?
Callability
Return clause
Recall clause
Call class
50
A type of bond to which are attached coupons indicating the interest due and the date when such interest is to be paid
Coupon bond
Registered bond
Collateral trust bond
Mortgage bond
51
What is a measure of the average speed with which accounts receivable are collected?
Current ratio
Quick ratio
Acid test ratio
Receivable turnover
52
What is the main reason why the sinking fund method of computing depreciation is seldom used in the industry?
The initial deprecation is high
The initial deprecation is low
Unstable economy
Rate of interest cannot be exactly determined
53
Which of the following is an example of intangible asset?
Patents
Investment in subsidiary companies
Furnitures
Cash
54
What is an accounting term that represents an inventory account adjustment?
Cost of goods sold
Cost accounting
Standard cost
Overhead cost
55
Oligopoly exists when there is/are:
Few sellers and few buyers
One seller and few buyers
Few sellers and many buyers
Many sellers and few buyers
56
Capitalized cost of a project is also known as
Project Cost
Life Cycle Cost
Infinite cost
Life Cost
57
The deliberate lowering of the price of a nation’s currency in terms of the accepted standard.
Currency appreciation
Currency depreciation
Currency devaluation
Currency float
58
Current assets less inventories divided by current liabilities is known as
Liquidity ratio
Current ratio
Debts ratio
Acid-Test (or Quick) ratio
59
What stock represents ownership and enjoys certain preferences than ordinary stock?
Incorporator’s stock
Authorized stock
Preferred stock
Presidential stock
60
Residual value of a company’s assets after all outside liabilities (shareholders excluded) have been allowed for
Return
Dividend
Equity
Par value
61
What is the factor name of the formula [i(1+i)^n]/[((1+i)^n)‐1]?
Uniform series sinking fund
Capital recovery
Uniform gradient future worth
Single payment present worth
62
What is the type of annuity that does not have a fixed time span but continues indefinitely or forever?
Ordinary annuity
Deferred annuity
Annuity due
Perpetuity
63
What is the change in cost per unit variable change called?
Variable cost
Supplemental cost
Incremental cost
Fixed cost
64
What is used to record historical financial transactions?
Bookkeeping system
General journal system
Balance check
Ledger system
65
Ratio analysis of a construction firm is used for analysis by:
Banks of the Firm
Firm's Management
Shareholders
Financial Analysts
66
See image
Luxury
Necessity
Producer products
Consumer products
67
What refers to the present worth of cost associated with an asset for an infinite period of time?
Operating cost
Annual cost
Increment cost
Capitalized cost
68
What is defined as the reduction or fall of the value of an asset due to constant use and passage of time?
Inflation
Depreciation
Depletion
Deflation
69
What are the common methods of computing depletion charge?
Rational method and irrational method
Conservative method and conventional method
Unit method and percentage method
Discrete method and depletion allowance method
70
The ratio of the net income before taxes to net sales is called ______.
Inventory turnover
Profit margin ratio
Price-earnings ratio
Current ratio
71
The key to profitable operation for project cost control, is:
None of these
To keep the project cost within the cost budget and know when it deviates
To keep the project cost equal to subsequent construction budget
To keep the project cost equal to original cost estimate
72
See media.
Franchise value
Going value
Company value
Goodwill value
73
See image
Stock pile
Hoard Stock
Buffer Stock
Withheld Stock
74
A form of business firm which is owned and run by a group of individuals for their mutual benefit is called ______.
Cooperative
Corporation
Enterprise
Partnership
75
See media.
Capital Recovery Annuity is availed
Sinking Fund Annuity is availed
Present work Annuity is availed
Sinking Fund Annuity is availed
76
See image
Gain
Economic return
Earning value
Yield
77
The price at which the callable bond will be redeemed from the bondholder is called ______.
Par value
Face value
Redemption value
Call value
78
The ability to convert assets to cash quickly is known as
Solvency
Liquidity
Leverage
Insolvency
79
The ratio of current assets to current liabilities is known as
Debts ratio
Acid-Test (or Quick) ratio
Current ratio
Liquidity ratio
80
What do you call a one‐time credit against taxes?
Credible credit
Revenue credit
Tax credit
Due credit
81
What is the simplest form of business organization?
Partnership
Enterprise
Sole proprietorship
Corporation
82
What is another term for “perfect competition”?
Atomistic competition
No-limit competition
Heterogeneous market
Free-for-all competition
83
What is a market situation whereby there is only one buyer of an item for which there is no goods substitute?
Oligopoly
Oligopsony
Monopsony
Monopoly
84
Which one of the following statements is correct?
No of years required to recover the initial case investment is the PBP
Discount rate that = the present value of the expected NCFs with ICO is IRR
Present value of proposal's net cash flows, less the initial outflow is NPV
All of these
85
The owner of the construction company makes use of the estimate
To determine the capital investment costs
To determine economic feasibility of the project
To assist in financial arrangements
All of these
86
What refers to the amount of a product made available for sale?
Good
Product
Supply
Demand
87
Duopsony is a market situation where there is/are:
Few sellers and few buyers
Few sellers and many buyers
Many sellers and few buyers
One seller and few buyers
88
Liquidity ratios are used:
To obtain insights into the present cash solvency of the firm and the firm
All of these
To compare short term obligations to short-term resources available
To measure a firm’s ability to meet short-cut obligations
89
A mathematical expression also known as the present value of annuity of one is called ______.
Load factor
Present worth factor
Sinking fund factor
Demand factor
90
What refers to the negotiable claim issued by a bank in lien of a term deposit?
Certificate of deposit
Bond
Time deposit
Capital gain certificate
91
The project contractor relies on the cost of the estimate
For preparation of a definitive estimate to help negotiate contract
All of these
For submission of a competitive bid for a lump-sum contract
For a unit price contract
92
See media
Natural monopoly
Ordinary monopoly
Bilateral monopoly
Perfect monopoly
93
See media
Design cost analysis
Engineering cost analysis
Economic Analysis
Engineering economy
94
Which is true about partnership?
Its capitalization must be equal for each partner.
It can be handed down from one generation of partners to another.
It has a perpetual life.
It will be dissolved if one ceases to be connected with the partnership
95
Double taxation is a disadvantage of which business organization?
Sole proprietorship
Enterprise
Corporation
Partnership
96
What refers to the cost of borrowing money or the amount earned by a unit principal per unit time?
Economic return
Rate of interest
Rate of return
Yield rate
97
What is the type of annuity where the first payment does not begin until some later date in the cash flow?
Ordinary annuity
Deferred annuity
Perpetuity
Annuity due
98
Interest rate at which the present work of the cash flow on a project is zero of the interest earned by an investment
Yield
Rate of return
Economic return
Return of investment
99
A construction estimate is used
Produce a statement of approximate cost
None of the above
Judge tentatively or approximate value of the project
Decide an approximation of the value of the project and not the exact cost
100
Current ratio is:
(Current assets + loans advances)/Current liabilities
Current assets/Current liabilities
(Current assets + loans)/Current liabilities
None of these

Engineering Economy Set 1 Examveda Flashcards | StudBud