Engineering Economics MCQ Questions & Answers

1

The CRF (ep) is also known as: [CRF(EP) - 8% - 7], where

A) 8% is the rate of interest per year B) Money is borrowed for n = 7 years C) Both (A) and (B) D) Neither (A) nor (B)

Discuss

Answer & Solution

Answer: Option C

Solution:

CRF(ep) stands for Capital Recovery Factor (equal payment).
CRF(EP) - 8% - 7 means that we are trying to find a factor to convert a present value into a series of equal payments.
8% is the interest rate used for the calculation. So, Option A is correct.
7 is the number of years (or periods) over which the payments will be made. So, Option B is also correct.
Since both Option A and Option B are correct, the answer is Both (A) and (B).

2

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

Discuss

Answer & Solution

Answer: Option A

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3

A man loans P 187,400 from a bank with interest at 5% compounded annually. He agrees to pay his obligations by paying 8 equal annual payments, the first being due at the end of 10 years. Find the annual payments.

A) P 43,600.10 B) P 43,489.47 C) P 43,263.91 D) P 43,763.20

Discuss

Answer & Solution

Answer: Option D

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4

Keeping in view, the feasibility order of magnitude, the preliminary, conceptual or budget estimates, are prepared by:

A) Architect/engineer B) Construction manager C) Owner himself/herself D) None of the above

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Answer & Solution

Answer: Option C

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5

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

A) Capital expenditure B) Capital loss C) Loss D) Deficit

Discuss

Answer & Solution

Answer: Option B

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6

What is the increase in the money value of a capital asset is called?

A) Profit B) Capital gain C) Capital expenditure D) Capital stock

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Answer & Solution

Answer: Option B

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7

A construction estimate is used

A) To judge tentatively or approximate value of the project B) To produce a statement of the approximate cost C) To decide an approximation of the value of the project and not the exact cost D) None of these

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Answer & Solution

Answer: Option C

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8

If P is principal amount, $$I$$ is the rate of interest per annum and n is the number of periods in years, the compound amount factor (CAF) is:

A) $${\left( {1 + I} \right)^{\text{n}}}$$ B) $${\left( {1 + I} \right)^{\frac{1}{{2{\text{n}}}}}}$$ C) $$\sqrt {{\text{n}} + I} $$ D) None of these

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Answer & Solution

Answer: Option A

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9

If interest is paid more than once in a year, ‘i’ is the rate of interest per year, ‘n’ is the number of periods in years and ‘m’ is a number of periods per years, compound amount factor (CAF) is:

A) $${\left( {1 + \frac{{\text{i}}}{{\text{m}}}} \right)^{\text{n}}}$$ B) $${\left( {1 + \frac{{\text{i}}}{{\text{n}}}} \right)^{\text{m}}}$$ C) $${\left( {1 + \frac{{\text{i}}}{{\text{n}}}} \right)^{\frac{1}{{\text{m}}}}}$$ D) $${\left( {1 + \frac{{\text{i}}}{{\text{m}}}} \right)^{\frac{1}{{\text{n}}}}}$$

Discuss

Answer & Solution

Answer: Option A

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10

What is the term for an annuity with a fixed time span?

A) Ordinary annuity B) Perpetuity C) Annuity certain D) Annuity due

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Answer & Solution

Answer: Option C

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Engineering Economics MCQ Questions & Answers | Civil Engineering