Engineering Economics 6

Objective Questions and Answers of Civil Engineering: Engineering Economics 6

Subject: Engineering Economics 6

Part 6: Objective questions and answers of Engineering Economics

 

Q1. 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) Design depreciation

c) Physical depreciation

d) Demand depreciation

 

Q2. What refers to a document that shows proof of legal ownership of a financial security?

a) Bond

b) Bank note

c) Coupon

d) Check

 

Q3. 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) Sinking fund method

c) Sum-of-year digit method

d) Declining balance method

 

Q4. What bond whose security is a mortgage on certain specified assets of the corporation?

a) Registered bond

b) Collateral trust bond

c) Mortgage bond

d) Debenture bond

 

Q5. What is the feature of some bonds whereby the issuer can redeem it before it matures?

a) Return clause

b) Callability

c) Recall clause

d) Call class

 

Q6. 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) Preferred bond

b) Registered bond

c) Incorporators bond

d) Callable bond

 

Q7. What type of bond whose guaranty is in lien on railroad equipment, such as freight and passenger cars, locomotives, etc.?

a) Railroad bond

b) Equipment obligation bond

c) Equipment bond

d) Equipment trust bond

 

Q8. 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) Straight line method

b) Sinking fund method

c) Sum-of-year digit method

d) Declining balance method

 

Q9. What type of depreciation is due to the reduction of the physical ability of an equipment or asset to produce results?

a) Functional depreciation

b) Design depreciation

c) Physical depreciation

d) Demand depreciation

 

Q10. 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) Inflation

c) Depreciation

d) Deflation

 

Q11. Under the depletion allowance method in computing depreciation, the depletion charge is equal to either ______ whichever is smaller.

a) 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) 50% of the fixed percentage of gross income or the net taxable income

 

Q12. 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 times number of units sold during the year

d) Initial cost of property divided by the total units in property

 

Q13. A mathematical expression also known as the present value of annuity of one is called ______.

a) Load factor

b) Demand factor

c) Sinking fund factor

d) Present worth factor

 

Q14. 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) Book value

b) Market value

c) Fair value

d) Franchise value

 

Q15. 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) Material cost

b) Fixed cost

c) First cost

d) In-place value

 

Q16. The process of determining the value or worth of a physical property for specific reason is called ______.

a) Investment

b) Valuation

c) Economy

d) Depletion

 

Q17. What refers to the present worth of cost associated with an asset for an infinite period of time?

a) Annual cost

b) Increment cost

c) Capitalized cost

d) Operating cost

 

Q18. What is normally used to compare alternatives that accomplish the same purpose but have unequal lives?

a) Capitalized cost method

b) Present worth method

c) Annual cost method

d) MARR

 

Q19. What refers to an imaginary cost representing what will not be received if a particular strategy is rejected?

a) Opportunity cost

b) Ghost cost

c) Horizon cost

d) Null cost

 

Q20. What is the factor name of the formula (1+i)^-n?

a) Uniform gradient future worth

b) Capital recovery

c) Single payment present worth

d) Single payment compound amount

 

Part 6: Objective questions and answers of Engineering Economics

 

Q1. Answer a

 

Q2. Answer c

 

Q3. Answer a

 

Q4. Answer c

 

Q5. Answer b

 

Q6. Answer b

 

Q7. Answer b

 

Q8. Answer d

 

Q9. Answer c

 

Q10. Answer a

 

Q11. Answer b

 

Q12. Answer a

 

Q13. Answer d

 

Q14. Answer c

 

Q15. Answer d

 

Q16. Answer b

 

Q17. Answer c

 

Q18. Answer c

 

Q19. Answer a

 

Q20. Answer c