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.Management Sciences
Category: Engineering Economy
What is defined as the investment of loan or principal which is based not only on the original amount of the loan or principal but the amount of loaned or principal plus the previous accumulated interest ?
A. Effective rate of interest
B. Nominal rate of interest
C. Compound interest
D. Simple interest
In what method of computing depreciation where it assumes that the loss in value is directly proportional to the age of the equipment or asset ?
A. Straight line method
B. Sinking fund method
C. Sum-of-year digit method
D. Declining balance method
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
What type of depreciation is due to the reduction in the demand for the function that the equipment or asset was designed to render ?
A. Functional depreciation
B. Design depreciation
C. Physical depreciation
D. Demand depreciation
What refers to the exchange mechanism that brings together the sellers and the buyers of a product, factor of production or financial security ?
A. Mall
B. Market
C. Store
D. Office
What refers to the value of an intangible item which arises from the exclusive right of a company to provide a specified product and service in a certain region of the country ?
A. Company value
B. Going value
C. Goodwill value
D. Franchise value
What is the simplest form of business organization ?
A. Sole proprietorship
B. Partnership
C. Enterprise
D. Corporation
Which of the following is an example of intangible asset ?
A. Cash
B. Investment in subsidiary companies
C. Furnitures
D. Patents
What is defined as the reduction of the value of certain natural resources such as mines, oil, timber, quarries, etc. due to the gradual extraction of its contents ?
A. Depletion
B. Inflation
C. Depreciation
D. Deflation
What is the basic accounting equation ?
A. Assets = liability + owner’s equity
B. Liability = assets + owners’ equity
C. Owner’s equity = assets + liability
D. Owner’s equity = liability – assets
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