Practice Engineering Economy Multiple Choice Questions with Answers Quiz-3

Q.1.

Which one of the following is included in financial ratios of the firm ?

Profitability ratio
Liquidity ratio
Turnover ratio
Ratio of overall performances
All of these

Q.2.

The project contractor relies on the cost of the estimate :

for submission of a competitive bid for a lumpsum contract
for a unit price contract
for preparation of a definitive estimate to help negotiate contract.
All of these

Q.3.

Pick up the correct statement from the following:

An annuity is a series of equal payments occurring at equal period of time.
Annuity is called an equal payment or uniform payment series.
An annuity may have periods of time of any length but should always be of equal length.
All the above.

Q.4.

The sunk costs include :

a past expenditure
an unrecovered balance
an invested capital that cannot be retreived
All of these

Q.5.

Ratio analysis of a construction firm is used for analysis by :

share holders
firm's management
Banks of the firm
financial analysts
All of these.

Q.6.

Pick up the correct statement from the following:

The financial ratio summarises some aspect of the firm's financial condition at the time of preparing a balance sheet.
Both the numerator and denominator of financial ratios come directly from the balance sheet.
Income statement ratios compare one 'flow' item from the income statement to another flow item from the income statement.
Income statement ratios compare a flow item from the income statement to another flow item form the income statement
All of these

Q.7.

Which one of the following questions is relevant to the construction estimates :

Did the estimators precisely evaluate site conditions ?
Did the estimators use short cut methods which may be un realistic in their situation ?
How much money will the contractor's risk, loosing if he Were to submit bid on the raw estimate of cost.
All of these

Q.8.

The wages of supervisors and material handlers are charged as :

Over head
direct labour cost
indirect labour cost
None of these

Q.9.

The construction estimate of a project is used by :

the owner of the facility
the consulting architect/engineer
the contractor of the project
All of these

Q.10.

Current assests less inventories divided by current liabilities is known as

Liquidity ratio
Current ratio
Acid-Test (or Quick) ratio
Debts ratio

Q.11.

The ratio obtained by dividing 'quick assests' by current liabilities is called

Turnover ratio
Acid test ratio
Solvency ratio
None of these.

Q.12.

The CRF (ep) is also known as: [CRF(EP) -- 7], where

8% is the rate of interest per year
money is borrowed for n = 7 years
both (a) and (b)
Neither (a) nor (b)

Q.13.

Both architect and engineer make use of the cost estimate of the project:

for site selection
for designing of the project
for choosing alternatives
All of these

Q.14.

Probabilistic estimating of a construction project includes:

Labour
Productivity
wage scale
All of these

Q.15.

Pick up the correct statement from the following:

The capital required to get a project started is the first cost.
The first cost is a single cash flow or a series of cash flows that are made in the beginning of the activity's life span
The first cost of purchasing a car is the sum of the down payment, taxes and dealers charges.
All of these

Q.16.

Which one of the following definitions, is correct ?

The ratio of total debt to share holder's equity is called 'debt ratio'.
The ratio debt-to-total assests is called Debt-to-total assest ratio.
The ratio of earnings before interest and taxes for a particular reporting period to the amount of interest charges for the period, is called interest coverage ratio.
All of these

Q.17.

Annuities involve:

a series of payments
all payments of equal amount
payment at equal time intervals
payments at the end of periods.
All of these

Q.18.

If a seller recovers his capital along with accumulated compensating interest not in one single lumpsum payment but in periodical equal payments, over time :

Capital Recovery Annuity fs availed
Present work Annuity is availed
Sinking Fund Annuity is availed
Sinking Fund Annuity is availed

Q.19.

If a is the base amount expenditure, b is the increase in the operation cost each year over a period of n years, the total cost of maintenance is :

a + (n + 1) b
a + (n - 1) b
a x (n - 1) b
a - (n - 1) b

Q.20.

The alternatives which are standalone solutions for given situations in engineering involve :

a purchase cost (first cost)
the anticipated life of the assest
the yearly costs of maintaining the assest (annual maintenance and operating cost)
the anticipated resaleable value (salvage value) and the interest return (rate of return)
All of these

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