Practice Engineering Economy Multiple Choice Questions with Answers Quiz-1

Q.1.

The owner of the construction company makes use of the estimate :

to determine the capital investment costs.
to assist in financial arrangements
to determine economic feasibility of the project.
to determine the tax, insurance and evaluation purpose.
All of these

Q.2.

Liquidity ratios are used :

to measure a firms ability to meet short-cut obligations.
to compare short term obligations to short-term resources available to meet these obligations.
to obtain much insight into the present cash solvency of the firm and the firm's ability to remain solvent in the event of adversity.
All of these

Q.3.

A project construction cost estimate includes:

the labour and material cost
the equipment and over head cost
the profit of the contractor
All of these

Q.4.

Which one of the following is not a construction estimate ?

Initial feasibility estimate
Conceptual preliminary budget
Definite estimate
None of these

Q.5.

Earning per share is the most important ratio for

share holders
banks
company's management
All of these

Q.6.

Pick up the correct statement from the following:

The difference between sales revenue and cost of goods sold, is known as 'Gross Profit.'
The gross profit percentage is the average profit margin obtained on goods sold.
The relationship of contribution to sales is known as contribution ratio
The difference between sales and variable cost of sales, is called contribution.
All of these

Q.7.

Pick up the correct statement from the following:

The receipts and disbursements in a given time interval are referred to as cash flow.
The assumptions that all cash flows occur at the end of the interest period, is known as the end of period convention.
A cash flow diagram is a graphical representation of cash flows drawn on a time scale.
The cash flow diagram represents the statement of the problem and also includes what is given and what is to be found.
All of the above.

Q.8.

Pick up the method used for project evaluation and selection in capital budgetting from the following:

pay back period
Internal ratio of return
Net present worth
Profitability index
All the above

Q.9.

Pick up the main purpose of project cost control from the following :

To signal immediate warning of uneconomic operations
To provide a feed back to the estimator
To promote cost consciousness
All of these

Q.10.

The person desires to pay off the amount inequal annual instalments. The amount of each instalment is :

Rs 5638
Rs 6638
Rs 7738
None of these

Q.11.

Pick up the correct statement from the following:

The ratio of current assests, loans and advances, and the current liquidity is called current ratio.
Larger the current ratio, larger is the margin of safety.
The operating profit is the difference between gross profit and operating expenses.
All of these

Q.12.

Renu Bala deposits Rsnow, Rstwo years from now and Rsfive years from now. If the savings bank's rate of interest in 5%, she will receive an amount of Rs Xyears from now, where X is

Rs 3415
Rs 4225
Rs 4413
Rs 4826

Q.13.

Each financial ratio is generally compared by

a past ratio calculated from the past financial standard of the firm.
a ratio developed by using the projected financial statement of the firm.
a ratio of some selected firms most progressive and successful at the point of consideration.
All of these

Q.14.

Renu Bala deposits Rsnow, Rstwo years from now and Rsfive years from now. If the savings bank's rate of interest in 5%, she will receive an amount of Rs Xyears from now, where X is

Rs 3415
Rs 4225
Rs 4413
Rs 4826

Q.15.

Pick up the correct statement from the following:

The capital required to get a project started, is called first cost.
The costs associated with a new or existing project that remain unaffected by the changes in activity level over the normal range of operation of the project, are called fixed costs.
The group of costs that vary proportionately to the changes in the activity level of a new or existing project are called variable costs.
All of these

Q.16.

The key to profitable operation for project cost control, is :

To keep the project cost equal to original cost estimate.
To keep the project cost equal to subsequent construction budget.
To keep the project cost within the cost budget and knowing when and where job costs are deviating.
None of these

Q.17.

Pick up the correct statement from the following:

The ratio of current assests, loans and advances, and the current liquidity is called current ratio.
Larger the current ratio, larger is the margin of safety.
The operating profit is the difference between gross profit and operating expenses.
All of these

Q.18.

Present worth Annuity (PWA) is generally known as

Premium annuities
Income annuities
Future annuities
All of these

Q.19.

In a cash flow series :

uniform gradient signifies that an income or disbursement changes by the same amount in each interest period.
Either an increase or a decrease in the amount of a cash flow is called the gradient.
The gradient in the cash flow may be positive or negative.
All of these

Q.20.

Which one of the following statements is correct?

The number of years required to recover the initial cash investment in a project, is called Pay Back period (PBP).
The discount rate that equates the present value of the expected Net Cash Flows (CFs) with the Initial Cash Outflow (ICO) is known as internal rate of return.
The present value of the proposal's net cash flows, less the proposal's initial cash outflow is known as the Net Present Value (NPV)
All of these

Support mcqgeeks.com by disabling your adblocker.