Engineering Economy MCQs

Option A: Profit margin ratio

Option B: Price-earnings ratio

Option C: Return of investment ratio

Option D: Quick ratio

Correct Answer: Quick ratio ✔

Option A: Net credit sales to average net receivable

Option B: Current assets to current liabilities

Option C: Gross profit to net sales

Option D: Net income to owner’s equity

Correct Answer: Current assets to current liabilities ✔

Option A: Price-earnings ratio

Option B: Current ratio

Option C: Profit margin ratio

Option D: Gross margin

Correct Answer: Current ratio ✔

Option A: Liquidity

Option B: Solvency

Option C: Relative risk

Option D: All of the above

Correct Answer: All of the above ✔

Option A: Assets = liability + owner’s equity

Option B: Liability = assets + owners’ equity

Option C: Owner’s equity = assets + liability

Option D: Owner’s equity = liability – assets

Correct Answer: Assets = liability + owner’s equity ✔

Option A: Solvency

Option B: Liquidity

Option C: Leverage

Option D: Insolvency

Correct Answer: Liquidity ✔

Option A: Solvency

Option B: Leverage

Option C: Insolvency

Option D: Liquidity

Correct Answer: Solvency ✔

Option A: Stock pile

Option B: Hoard stock

Option C: Buffer stock

Option D: Withheld stock

Correct Answer: Buffer stock ✔

Option A: Cooperative

Option B: Corporation

Option C: Enterprise

Option D: Partnership

Correct Answer: Cooperative ✔

Option A: Coupon

Option B: T-bill

Option C: Debenture

Option D: Consol

Correct Answer: Consol ✔

Option A: Current ratio

Option B: Quick ratio

Option C: Profit margin ratio

Option D: Price-earnings ratio

Correct Answer: Quick ratio ✔

Option A: Net sale

Option B: Owner’s equity

Option C: Inventory turnover

Option D: Quick assets

Correct Answer: Net sale ✔

Option A: Net income to owner’s equity

Option B: Market price per share to earnings per share

Option C: Cost of goods sold to average cost of inventory at hand

Option D: Net credit sales to average net receivable

Correct Answer: Net income to owner’s equity ✔

Option A: Expected return

Option B: Nominal interest

Option C: Effective interest

Option D: Economic return

Correct Answer: Effective interest ✔

Option A: First cost + interest of first cost

Option B: Annual cost – interest of first cost

Option C: First cost + cost of perpetual maintenance

Option D: First cost + salvage value

Correct Answer: First cost + cost of perpetual maintenance ✔

Option A: Annuity

Option B: Amortization

Option C: Capital recovery

Option D: Annuity factor

Correct Answer: Amortization ✔

Option A: Capital recovery

Option B: Cash flow

Option C: Economic return

Option D: Earning value

Correct Answer: Cash flow ✔

Option A: Compulsory saving

Option B: Consumer saving

Option C: Forced saving

Option D: All of the above

Correct Answer: Forced saving ✔

Option A: Currency appreciation

Option B: Currency depreciation

Option C: Currency devaluation

Option D: Currency float

Correct Answer: Currency devaluation ✔

Option A: Currency appreciation

Option B: Currency depreciation

Option C: Currency devaluation

Option D: Currency float

Correct Answer: Currency depreciation ✔

Option A: Time deposit

Option B: Bond

Option C: Capital gain certificate

Option D: Certificate of deposit

Correct Answer: Certificate of deposit ✔

Option A: Capital expenditure

Option B: Capital loss

Option C: Loss

Option D: Deficit

Correct Answer: Capital loss ✔

Option A: Profit

Option B: Capital gain

Option C: Capital expenditure

Option D: Capital stock

Correct Answer: Capital gain ✔

Option A: Rule of 48

Option B: Rule of 36

Option C: Rule of 24

Option D: Rule of 72

Correct Answer: Rule of 72 ✔

Option A: Due credit

Option B: Tax credit

Option C: Credible credit

Option D: Revenue credit

Correct Answer: Tax credit ✔

Option A: Current ratio

Option B: Inventory turnover

Option C: Profit margin ratio

Option D: Price-earnings ratio

Correct Answer: Profit margin ratio ✔

Option A: Current ratio

Option B: Quick ratio

Option C: Acid test ratio

Option D: Receivable turnover

Correct Answer: Receivable turnover ✔

Option A: Inspection cost

Option B: Testing cost

Option C: Assembly cost

Option D: Supervision cost

Correct Answer: Supervision cost ✔

Option A: Net income

Option B: Gross income

Option C: Net revenue

Option D: Total sales

Correct Answer: Gross income ✔

Option A: Work book

Option B: Journal

Option C: Ledger

Option D: Account book

Correct Answer: Journal ✔

Option A: Balanced sheet

Option B: Ledger

Option C: Worksheet

Option D: Trial balance

Correct Answer: Ledger ✔

Option A: Bookkeeping system

Option B: Ledger system

Option C: Balance check

Option D: General journal system

Correct Answer: Bookkeeping system ✔

Option A: Variable cost

Option B: Incremental cost

Option C: Fixed cost

Option D: Supplemental cost

Correct Answer: Incremental cost ✔

Option A: Cost of goods sold

Option B: Cost accounting

Option C: Standard cost

Option D: Overhead cost

Correct Answer: Cost of goods sold ✔

Option A: Fixed assets

Option B: Non-liquid assets

Option C: Liquid assets

Option D: Ccash

Correct Answer: Liquid assets ✔

Option A: Economic return

Option B: Yield

Option C: Rate of return

Option D: Return of investment

Correct Answer: Rate of return ✔

Option A: Current asset

Option B: Trade investment asset

Option C: Fixed asset

Option D: Intangible asset

Correct Answer: Fixed asset ✔

Option A: Cash

Option B: Investment in subsidiary companies

Option C: Furnitures

Option D: Patents

Correct Answer: Patents ✔

Option A: Status company

Option B: Big income

Option C: Known owners

Option D: Goodwill

Correct Answer: Goodwill ✔

Option A: Yield

Option B: Economic return

Option C: Earning value

Option D: Gain

Correct Answer: Economic return ✔

Option A: Franchise

Option B: Partnership

Option C: Stock

Option D: Corporation

Correct Answer: Stock ✔

Option A: Capital

Option B: Funds

Option C: Assets

Option D: Liabilities

Correct Answer: Capital ✔

Option A: Proprietorship

Option B: Assets

Option C: Equity

Option D: Liability

Correct Answer: Equity ✔

Option A: Dividend

Option B: Equity

Option C: Return

Option D: Par value

Correct Answer: Equity ✔

Option A: Dividend

Option B: Return

Option C: Share of stock

Option D: Equity

Correct Answer: Dividend ✔

Option A: Authorized stock

Option B: Preferred stock

Option C: Incorporator’s stock

Option D: Presidential stock

Correct Answer: Preferred stock ✔

Option A: Authorized capital stock

Option B: Preferred stock

Option C: Incorporator stock

Option D: Common stock

Correct Answer: Common stock ✔

Option A: Partnership

Option B: Investors

Option C: Corporation

Option D: Stockholders

Correct Answer: Corporation ✔

Option A: Entrepreneurship

Option B: Partnership

Option C: Proprietorship

Option D: Corporation

Correct Answer: Partnership ✔

Option A: It is worse type of business organization.

Option B: The minimum number of incorporators to start a corporation is three.

Option C: Its life is dependent on the lives of the incorporators.

Option D: The stock holders of the corporation are only liable to the extent of their investments.

Correct Answer: The stock holders of the corporation are only liable to the extent of their investments. ✔

Option A: It has a perpetual life

Option B: It will be dissolved if one of the partners ceases to be connected with the partnership

Option C: It can be handed down from one generation of partners to another

Option D: Its capitalization must be equal for each partner

Correct Answer: It can be handed down from one generation of partners to another ✔

Option A: The partners are not liable for the liabilities of the partnership

Option B: The partnership assets (excluding the partners personal assets) only will be used to pay the liabilities

Option C: The partners personal assets are attached to the debt of the partnership

Option D: The partners nay sell stock to generate additional capital

Correct Answer: The partnership assets (excluding the partners personal assets) only will be used to pay the liabilities ✔

Option A: Sole proprietorship

Option B: Partnership

Option C: Corporation

Option D: Enterprise

Correct Answer: Corporation ✔

Option A: Sole proprietorship

Option B: Partnership

Option C: Enterprise

Option D: Corporation

Correct Answer: Sole proprietorship ✔

Option A: Corporation

Option B: Property

Option C: Partnership

Option D: Organization

Correct Answer: ✔

Option A: Sole proprietorship

Option B: Entrepreneurship

Option C: Partnership

Option D: Corporation

Correct Answer: Sole proprietorship ✔

Option A: Uniform series sinking fund

Option B: Capital recovery

Option C: Single payment present worth

Option D: Uniform gradient future worth

Correct Answer: Capital recovery ✔

Option A: Uniform gradient future worth

Option B: Capital recovery

Option C: Single payment present worth

Option D: Single payment compound amount

Correct Answer: Single payment present worth ✔

Option A: Unstable economy

Option B: Rate of interest cannot be exactly determined

Option C: The initial deprecation is high

Option D: The initial depreciation is low

Correct Answer: The initial depreciation is low ✔

Option A: Opportunity cost

Option B: Ghost cost

Option C: Horizon cost

Option D: Null cost

Correct Answer: Opportunity cost ✔

Option A: Annual cost method

Option B: Benefit-cost ratio

Option C: Rate of return method

Option D: EUAC

Correct Answer: Benefit-cost ratio ✔

Option A: Capitalized cost method

Option B: Present worth method

Option C: Annual cost method

Option D: MARR

Correct Answer: Annual cost method ✔

Option A: Infinite cost

Option B: Life cycle cost

Option C: Life cost

Option D: Project cost

Correct Answer: Life cycle cost ✔

Option A: Annual cost

Option B: Increment cost

Option C: Capitalized cost

Option D: Operating cost

Correct Answer: Capitalized cost ✔

Option A: Sunk cost

Option B: Economic life

Option C: In-place value

Option D: Annuity

Correct Answer: Sunk cost ✔

Option A: Investment

Option B: Valuation

Option C: Economy

Option D: Depletion

Correct Answer: Valuation ✔

Option A: The original purchase price and freight charges

Option B: Installation expenses

Option C: Initial taxes and permit fees

Option D: All of the above

Correct Answer: All of the above ✔

Option A: Material cost

Option B: Fixed cost

Option C: First cost

Option D: In-place value

Correct Answer: In-place value ✔

Option A: Company value

Option B: Going value

Option C: Goodwill value

Option D: Franchise value

Correct Answer: Franchise value ✔

Option A: Book value

Option B: Market value

Option C: Fair value

Option D: Franchise value

Correct Answer: Fair value ✔

Option A: Scrap value

Option B: Going value

Option C: Junk value

Option D: Second-hand value

Correct Answer: Second-hand value ✔

Option A: Fair value

Option B: Market value

Option C: Good will value

Option D: Book value

Correct Answer: Market value ✔

Option A: Load factor

Option B: Demand factor

Option C: Sinking fund factor

Option D: Present worth factor

Correct Answer: Present worth factor ✔

Option A: Asset recovery

Option B: Depreciation recovery

Option C: Period recovery

Option D: After-tax recovery

Correct Answer: Depreciation recovery ✔

Option A: Initial cost of property times number of unit sold during the year divided by the total units in property

Option B: Initial cost of property divided by the number of units sold during the year

Option C: Initial cost of property times number of units sold during the year

Option D: Initial cost of property divided by the total units in property

Correct Answer: Initial cost of property times number of unit sold during the year divided by the total units in property ✔

Option A: Initial cost method

Option B: Percentage method

Option C: Factor method

Option D: Sinking fund method

Correct Answer: Factor method ✔

Option A: Unit method

Option B: Percentage method

Option C: Factor method

Option D: Sinking fund method

Correct Answer: Percentage method ✔

Option A: Fixed percentage of gross income or the net taxable income

Option B: Fixed percentage of gross income or 50% of the net taxable income

Option C: 50% of the fixed percentage of gross income or 50% of the net taxable income

Option D: 50% of the fixed percentage of gross income or the net taxable income

Correct Answer: Fixed percentage of gross income or 50% of the net taxable income ✔

Option A: Rational method and irrational method

Option B: Conservative method and conventional method

Option C: Unit method and percentage method

Option D: Discrete method and depletion allowance method

Correct Answer: Unit method and percentage method ✔

Option A: Depletion

Option B: Inflation

Option C: Depreciation

Option D: Deflation

Correct Answer: Depletion ✔

Option A: Demand depreciation

Option B: Adolescence

Option C: Life depreciation

Option D: Failure depreciation

Correct Answer: Adolescence ✔

Option A: Functional depreciation

Option B: Design depreciation

Option C: Physical depreciation

Option D: Demand depreciation

Correct Answer: Physical depreciation ✔

Option A: Functional depreciation

Option B: Design depreciation

Option C: Physical depreciation

Option D: Demand depreciation

Correct Answer: Functional depreciation ✔

Option A: Double percentage method

Option B: Constant percentage method

Option C: Modified sinking fund method

Option D: Modified SYD method

Correct Answer: Constant percentage method ✔

Option A: Straight line method

Option B: Sinking fund method

Option C: Sum-of-year digit method

Option D: Declining balance method

Correct Answer: Declining balance method ✔

Option A: Straight line method

Option B: Sinking fund method

Option C: Sum-of-year digit method

Option D: Declining balance method

Correct Answer: Sinking fund method ✔

Option A: Straight line method

Option B: Sinking fund method

Option C: Sum-of-year digit method

Option D: Declining balance method

Correct Answer: Straight line method ✔

Option A: Depletion

Option B: Inflation

Option C: Depreciation

Option D: Deflation

Correct Answer: Depreciation ✔

Option A: Par value

Option B: Call value

Option C: Face value

Option D: Redemption value

Correct Answer: Call value ✔

Option A: Return clause

Option B: Callability

Option C: Recall clause

Option D: Call class

Correct Answer: Callability ✔

Option A: Preferred bond

Option B: Registered bond

Option C: Incorporators bond

Option D: Callable bond

Correct Answer: Callable bond ✔

Option A: Preferred bond

Option B: Registered bond

Option C: Incorporators bond

Option D: Callable bond

Correct Answer: Registered bond ✔

Option A: Mortgage bond

Option B: Joint bond

Option C: Security bond

Option D: Collateral trust bond

Correct Answer: Collateral trust bond ✔

Option A: Joint bond

Option B: Debenture bond

Option C: Trust bond

Option D: Common bond

Correct Answer: Debenture bond ✔

Option A: Registered bond

Option B: Collateral trust bond

Option C: Mortgage bond

Option D: Debenture bond

Correct Answer: Mortgage bond ✔

Option A: Registered bond

Option B: Coupon bond

Option C: Mortgage bond

Option D: Collateral trust bond

Correct Answer: Coupon bond ✔

Option A: Railroad bond

Option B: Equipment obligation bond

Option C: Equipment bond

Option D: Equipment trust bond

Correct Answer: Equipment obligation bond ✔

Option A: Mortgage bond

Option B: Joint bond

Option C: Tie-up bond

Option D: Trust bond

Correct Answer: Joint bond ✔

Option A: Bond

Option B: Bank note

Option C: Coupon

Option D: Check

Correct Answer: Coupon ✔

Option A: 2.590

Option B: 2,632

Option C: 2,712

Option D: 2,890

Correct Answer: 2,632 ✔