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