# MCQs in Engineering Economics Part XVIII

Compiled MCQs in Engineering Economics Part 18 of the series as one topic in General Engineering and Applied Sciences (GEAS) in the ECE Board Exam.

This is the Multiples Choice Questions Part 18 of the Series in Engineering Economics as one of the General Engineering and Applied Sciences (GEAS) topic. In Preparation for the ECE Board Exam make sure to expose yourself and familiarize in each and every questions compiled here taken from various sources including past Board Questions in General Engineering and Applied Sciences (GEAS), Engineering Economy Books, Journals and other Engineering Economy References.

### Online Questions and Answers in Engineering Economics Series

Following is the list of multiple choice questions in this brand new series:

Engineering Economics MCQs
PART 1: MCQs from Number 1 – 50                        Answer key: PART I
PART 2: MCQs from Number 51 – 100                   Answer key: PART II
PART 3: MCQs from Number 101 – 150                 Answer key: PART III
PART 4: MCQs from Number 151 – 200                 Answer key: PART IV
PART 5: MCQs from Number 201 – 250                 Answer key: PART V
PART 6: MCQs from Number 251 – 300                 Answer key: PART VI
PART 7: MCQs from Number 301 – 350                 Answer key: PART VII
PART 8: MCQs from Number 351 – 400                 Answer key: PART VIII
PART 9: MCQs from Number 401 – 450                 Answer key: PART IX
PART 18: MCQs from Number 851 – 900                 Answer key: PART XVIII

### Continue Practice Exam Test Questions Part XVIII of the Series

Choose the letter of the best answer in each questions.

851. The method of depreciation where fixed sum of money is regularly deposited at compound interest in a real or imaginary fund in order to accumulate an amount equal to the total depreciation of an asset at the end of the asset’s estimated life is known as;

• A. straight line method
• B. SYD method
• C. Declining balance method
• D. Sinking fund method

852. The term used to express the series of uniform payments occurring at equal interval of time is;

• A. compound interest
• B. annuity
• C. perpetuity
• D. depreciation

853. 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. earning value
• C. economic return
• D. expected yield

854. As applied to capitalized asset, the distribution of the initial cost by periodic changes to operation as in depreciation or the reduction of the depth by either periodic or irregular prearranged program is called

• A. amortization
• B. annuity
• C. depreciation
• D. capital recovery

855. Those funds that are required to make the enterprise or project going on.

• A. banking
• B. accumulated amount
• C. working capital
• D. principal or present worth

856. These are product or services that are desired by humans and will be purchased if money is available after the required necessities have been obtained

• A. utilities
• B. necessities
• C. luxuries
• D. producer good and services

857. These are product or services that are required to support human life and activities, that will be purchased in somewhat the same quantity even though the price varies considerably.

• A. utilities
• B. necessities
• C. luxuries
• D. producers goods and services

858. A condition where only a few individuals produce a certain product and that any action of one will lead to almost the same action of the others.

• A. oligopoly
• B. semi-monopoly
• C. monopoly
• D. perfect competition

859. This occurs in a situation where a commodity or service is supplied by a number of vendors and there is nothing to prevent additional vendors entering the market.

• A. perfect competition
• B. monopoly
• C. oligopoly
• D. elastic demand

860. It is the amount that a willing buyer will pay to a willing seller for a property where each has equal advantage and is under no compulsion to buy or sell.

• A. fair value
• B. use value
• C. market value
• D. book value

861. It is defined to be the capacity of a commodity to satisfy human want.

• A. discount’
• B. luxuries
• C. utility
• D. necessity

862. A form a summary of assets, liabilities and net worth;

• A. balance method
• B. break-even point
• C. balance sheet
• D. production

863. The worth of a property, which is equal to the original cost less depreciation, is known as;

• A. earning value
• B. scrap value
• C. book value
• D. face value

864. When using net present worth calculation to compare two projects, which of the following could invalidated the calculations?

• A. mutually exclusive projects
• B. evaluation over different periods
• C. non-conventional cash flows
• D. difference in the magnitude of the projects

865. Which of the following is a form of business/company ownership?

• A. partnership
• B. corporation
• C. single proprietorship
• D. all of these

866. What must two investments with the same present worth and unequal lives have?

• A. identical salvage value
• B. different salvage value
• C. identical equivalent uniform annual cash flows
• D. different equivalent annual cash flows

867. What is the formula for a straight-line depreciation rate?

• A. (100% - %net salvage value)/Estimated service life
• B. %net salvage value/Estimated service life
• C. 100%net salvage value/estimated service life
• D. average net salvage value/estimated service life

868. The amount received from the sale of an additional unit of a product is termed as:

• A. marginal cost
• B. marginal utility
• C. marginal unit
• D. marginal revenue

869. An accounting book where the original record of all transaction is ordinarily recorded.

• A. journal
• B. credit entry
• C. debit entry
• D. transaction record

870. An interest-earning fund in which equal deposits are made at equal intervals of time for the purpose of gradually accumulating a specific sum of money required at some future date.

• A. amortization
• B. sinking fund
• C. annuity
• D. capitalized cost

871. What is work-in-process classified as?

• A. an asset
• B. liability
• C. an expense
• D. owner's equity

872. Which is a form of business/company ownership?

• A. partnership
• B. corporation
• C. single proprietorship
• D. all of the list

873. The decrease in value of a physical property due to the passage of time;

• A. inflation
• B. depletion
• C. recession
• D. depreciation

874. We may classify an interest rate, which specifies the actual rate an interest on the principal for one year as:

• A. Nominal rate
• B. Rate of return
• C. Exact interest rate
• D. Effective rate

875. This law states that “When the use of one of the factors of production is limited, either in increasing cost or by absolute quantity, a point will be reached beyond which an increase in the variable factors will result in less than proportionate increase in output.”

• A. Law of Supply and Demand
• B. Law of Diminishing Return
• C. Law of Gravity
• D. Law of diminishing Utility

876. The difference between the present worth and the worth at some future time is:

• A. Discount
• B. Profit
• C. Credit
• D. Debit

877. The act of charging two or more buyers or sellers different prices for the same product where the elasticities of supply or demand at each price level differ among market is known as:

• A. Price optimization
• B. Price discrimination
• C. Price manipulation
• D. Price war

878. A formal organization of producers within an industry forming a perfect collision purposely formed to increase profit and block newcomers from the industry, is termed as;

• A. Oligopoly
• B. Monopoly
• C. Corporation
• D. Cartel

879. A situation in which rival firms drive prices down through attempts to undercut each other’s price is called;

• A. Price war
• B. Price discrimination price
• D. Oligopolistic monopoly

880. The price that the quantity per unit time that the buyers want to buy is just equal to the quantity the sellers want to sell is called;

• A. Break-even price
• B. Equilibrium price
• C. Minimum price
• D. Maximum price

881. The length of time during which a property is capable of performing the function for which it was designed and manufactured is termed as;

• A. economic life
• B. Life span
• C. Eternal life
• D. Physical life

882. It is a distinct legal entity, separate from individuals who own it and which can engage in practically any business transaction which real person can do.

• A. Partnership
• B. Single proprietorship
• C. Eternal Life
• D. Physical life

883. A market whereby there is only one buyer of an item for which there are no goods substitute.

• A. Monopoly
• B. Oligopoly
• C. Oligopsony
• D. Monopsony

884. This form of business ownership is a legal entity possessing many of the legal powers of individuals. It can hold title to property, sue and be sued in its own name. It is called:

• A. corporation
• B. company
• C. general partnership
• D. individual proprietorship

885. The balance sheet is a statement showing the financial status of the company at any given time. Which of the statements is not a part of the balance sheet.

• A. liabilities
• B. assets
• C. cost of goods sold
• D. net worth

886. Refers to cost of merchandise which excludes freight and insurance cost;

• A. freight-on-board
• B. sunk cost
• C. debentures
• D. book value

887. A fund into which annual deposits of A are made in order to accumulate fund F at n years in the future.

• A. Amortization
• B. Annuity
• C. Depreciation
• D. Sinking fund

888. Cash money credit necessary to establish and operate an enterprise.

• A. funds
• B. capital
• C. liabilities
• D. assets

889. The worth of property which is equal to the original cost less depreciation;

• A. scrap value
• B. earning value
• C. book value
• D. face value

890. Intangible assets of a corporation or company

• A. dacion-en-pago
• B. investment
• C. patents
• D. equity

891. Additional information to prospective bidders on contract documents issued to bidding date;

• A. escalatory clause
• B. delicts
• C. technological assessments
• D. bid bulletin

892. A civil wrong committed by one person causing damage to another person or his property or reputation;

• A. tort
• B. negligence
• C. material breach
• D. fraud

893. What is an annuity?

• A. A series of equal payments at equal time periods.
• B. The cost of manufacturing a product
• C. An investment that yields an equal amount of interest each year
• D. The overhead cost per unit of production

894. Consist of the actual counting or determination of the actual quantity of the materials on hands as of a given date;

• A. Physical inventory
• B. Technological assessment
• C. Material update
• D. Material count

895. An artificial expense that spreads the purchase price of an assets or other property over a number of years

• A. Depreciation amnesty
• B. Sinking fund
• C. Bond
• D. None of the above

896. Estimated value at the end of the useful life;

• A. salvage value
• B. economic life
• C. balance sheet
• D. compounded annually

897. The recorded current value of an asset is known as:

• A. scrap value
• B. book value
• C. salvage value
• D. present worth

898. The ratio of the interest payment to the principal for a given unit of time and is usually expressed as percentage of the principal is known as:

• A. investment
• B. nominal interest
• C. interest
• D. interest rate

899. A method of depreciation whereby the amount to recover is spread over the estimated life of the asset in terms of the periods or units of output is called

• A. SOYD method
• B. Declining balance method
• C. Straight line method
• D. Sinking fund method

900. The interest rate at which the present worth of cash flow of project is zero, or the interest earned by an investment.

• A. Rate of return
• B. Effective rate
• C. Nominal rate
• D. Yield

### Complete List of MCQs in General Engineering and Applied Science per topic

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