Engineering Economics 10

Objective Questions and Answers of Civil Engineering: Engineering Economics 10

Subject: Engineering Economics 10

Part 10: Objective questions and answers of Engineering Economics


Q1. 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 appreciation

b) Currency depreciation

c) Currency devaluation

d) Currency float


Q2. The flow back of profit plus depreciation form a given project is called ______.

a) Capital recovery

b) Cash flow

c) Economic return

d) Earning value


Q3. Capitalized cost of any structure or property is computed by which formula?

a) First cost + interest of first cost

b) Annual cost – interest of first cost

c) First cost + cost of perpetual maintenance

d) First cost + salvage value


Q4. Return on investment ratio is the ratio of the:

a) Net income to owner’s equity

b) Market price per share to earnings per share

c) Cost of goods sold to average cost of inventory at hand

d) Net credit sales to average net receivable


Q5. The force polygon representing a set of forces in equilibrium is a

a) Triangle

b) Open polygon

c) Closed polygon

d) Parallelogram


Q6. What is another term for “acid-test ratio”?

a) Current ratio

b) Quick ratio

c) Profit margin ratio

d) Price-earnings ratio


Q7. A form of business firm which is owned and run by a group of individuals for their mutual benefit is called ______.

a) Cooperative

b) Corporation

c) Enterprise

d) Partnership


Q8. The ability to meet debts as they become due is known as ______.

a) Solvency

b) Leverage

c) Insolvency

d) Liquidity


Q9. What is the basic accounting equation?

a) Assets = liability + owner’s equity

b) Liability = assets + owners’ equity

c) Owner’s equity = assets + liability

d) Owner’s equity = liability – assets


Q10. What is an index of short-term paying ability?

a) Price-earnings ratio

b) Current ratio

c) Profit margin ratio

d) Gross margin


Q11. What is defined as the current assets minus inventories and prepaid expenses?

a) Profit margin ratio

b) Price-earnings ratio

c) Return of investment ratio

d) Quick ratio


Q12. What refers to the saving which takes place because goods are not available for consumption rather than consumer really want to save?

a) Compulsory saving

b) Consumer saving

c) Forced saving

d) All of the above


Q13. 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) Annuity

b) Amortization

c) Capital recovery

d) Annuity factor


Q14. The true value of interest rate computed by equations for compound interest for a 1 year period is known as ______.

a) Expected return

b) Nominal interest

c) Effective interest

d) Economic return


Q15. Gross margin is the ratio of the gross profit to ______.

a) Net sale

b) Owner’s equity

c) Inventory turnover

d) Quick assets


Q16. What is a government bond which has an indefinite life rather than a specific maturity?

a) Coupon

b) T-bill

c) Debenture

d) Consol


Q17. 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) Stock pile

b) Hoard stock

c) Buffer stock

d) Withheld stock


Q18. The ability to convert assets to cash quickly is known as ______.

a) Solvency

b) Liquidity

c) Leverage

d) Insolvency


Q19. The financial health of the company is measured in terms of:

a) Liquidity

b) Solvency

c) Relative risk

d) All of the above


Q20. The common ratio is the ratio of:

a) Net credit sales to average net receivable

b) Current assets to current liabilities

c) Gross profit to net sales

d) Net income to owner’s equity


Part 10: Objective questions and answers of Engineering Economics


Q1. Answer c


Q2. Answer b


Q3. Answer c


Q4. Answer a


Q5. Answer c


Q6. Answer b


Q7. Answer a


Q8. Answer a


Q9. Answer a


Q10. Answer b


Q11. Answer d


Q12. Answer c


Q13. Answer b


Q14. Answer c


Q15. Answer a


Q16. Answer d


Q17. Answer c


Q18. Answer b


Q19. Answer d


Q20. Answer b