Engineering Economics 8

Objective Questions and Answers of Civil Engineering: Engineering Economics 8

Subject: Engineering Economics 8

Part 8: Objective questions and answers of Engineering Economics


Q1. What is the main reason why the sinking fund method of computing depreciation is seldom used in the industry?

a) Unstable economy

b) Rate of interest cannot be exactly determined

c) The initial deprecation is high

d) The initial depreciation is low


Q2. What refers to the claim of anyone to ownership?

a) Proprietorship

b) Assets

c) Equity

d) Liability


Q3. What represents the ownership of stockholders who have a residual claim on the assets of the corporation after all other claims has been settled?

a) Authorized capital stock

b) Preferred stock

c) Incorporator stock

d) Common stock


Q4. A form of business organization in which a person conducts his business alone and entirely for his own profit, being solely responsible for all its activities and liabilities

a) Sole proprietorship

b) Entrepreneurship

c) Partnership

d) Corporation


Q5. Double taxation is a disadvantage of which business organization?

a) Sole proprietorship

b) Partnership

c) Corporation

d) Enterprise


Q6. Which is true about partnership?

a) It has a perpetual life.

b) It will be dissolved if one of the partners ceases to be connected with the partnership.

c) It can be handed down from one generation of partners to another.

d) Its capitalization must be equal for each partner.


Q7. Aggregation of individuals formed for the purpose of conducting a business and recognized by law as a fictitious person is called ______.

a) Partnership

b) Investors

c) Corporation

d) Stockholders


Q8. The amount of company’s profit that the board of directors of the corporation decides to distribute to ordinary shareholders is called ______.

a) Dividend

b) Return

c) Share of stock

d) Equity


Q9. Cash money and credit necessary to establish and operate an enterprise are generally called ______.

a) Capital

b) Funds

c) Assets

d) Liabilities


Q10. The profit derived from a project or business enterprise without consideration of obligations to financial contributors and claims of others based on profit is known as ______.

a) Yield

b) Economic return

c) Earning value

d) Gain


Q11. Which of the following is an example of intangible asset?

a) Cash

b) Investment in subsidiary companies

c) Furniture’s

d) Patents


Q12. What refers to the interest rate at which the present work of the cash flow on a project is zero of the interest earned by an investment?

a) Economic return

b) Yield

c) Rate of return

d) Return of investment


Q13. What is an accounting term that represents an inventory account adjustment?

a) Cost of goods sold

b) Cost accounting

c) Standard cost

d) Overhead cost


Q14. What is used to record historical financial transactions?

a) Bookkeeping system

b) Ledger system

c) Balance check

d) General journal system


Q15. The original record of a business transaction is recorded in this book.

a) Work book

b) Journal

c) Ledger

d) Account book


Q16. All are classified under direct labor expenses EXCEPT one. Which one?

a) Inspection cost

b) Testing cost

c) Assembly cost

d) Supervision cost


Q17. The ratio of the net income before taxes to net sales is called ______.

a) Current ratio

b) Inventory turnover

c) Profit margin ratio

d) Price-earnings ratio


Q18. What is used when a quick estimate of the doubling time for the invested money is needed?

a) Rule of 48

b) Rule of 36

c) Rule of 24

d) Rule of 72


Q19. What is the reduction in the money value of capital asset is called?

a) Capital expenditure

b) Capital loss

c) Loss

d) Deficit


Q20. What denotes in the fall in the exchange rate of one currency in terms of the others? This term is usually applies to the floating exchange rate.

a) Currency appreciation

b) Currency depreciation

c) Currency devaluation

d) Currency float


Part 8: Objective questions and answers of Engineering Economics


Q1. Answer d


Q2. Answer c


Q3. Answer d


Q4. Answer a


Q5. Answer c


Q6. Answer c


Q7. Answer c


Q8. Answer a


Q9. Answer a


Q10. Answer b


Q11. Answer d


Q12. Answer c


Q13. Answer a


Q14. Answer a


Q15. Answer b


Q16. Answer d


Q17. Answer c


Q18. Answer d


Q19. Answer b


Q20. Answer b