Engineering Economy Handout (Objectives) Flashcards
The mathematical expression (1 + i)^n is referred to
A. Compounded
B. interest factor
C. future factor
D. compound amount factor
compound amount factor
What is the factor name for the formula (1 + i)^-n?
A. Uniform gradient future worth
B. Capital recovery
C. Single payment present worth
D. Single payment compound amount
single payment present worth
When using net present worth calculations to compare two projects, which of the following
could invalidate the calculation?
A. difference in the magnitudes of the projects
B. evaluating over a different period of time
C. mutually exclusive projects
D. nonconventional cash flows
evaluating over a different period of time
Which of the following corresponds to the meaning of annuity?
A. A lump sum at the end of the year.
B. An annual repayment of the loan.
C. A series of uniform amounts over a period of time.
D. The future worth of a present amount.
A series of uniform amounts over a period of time.
What is a borrower of a particular loan almost always required to do during repayment?
A. pay exactly the same amount of interest each payment
B. repay the loan over an agreed-upon amount of time
C. pay exactly the same amount of principal each payment
D. both options (A) and (C)
repay the loan over an agreed-upon amount of time
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. dividend
C. sinking fund
D. depletion
sinking fund
What is the formula for a straight-line depreciation rate?
A. 100 percent-percent net salvage value/estimated service life
B. percent net salvage value/estimated service value
C. 100 percent net salvage value/estimated service life
D. average net salvage value/estimated service life
100 percent-percent net salvage value/estimated service life
It is an amount which a willing buyer will pay to a willing seller for the property where each has equal advantage and is under no compulsion to buy or sell.
A. Book value
B. Market value
C. Use value
D. Fair value
Market Value
What is “work in process” classified as?
A. an asset
B. a liability
C. an expense
D. a revenue
an asset
Which of the following does NOT affect owner’s equity?
A. dividends paid
B. license to start operation
C. Price-earning ratio
D. Quick ratio
license to start operation
The ability to convert assets to cash quickly is known as
A. Solvency
B. Liquidity
C. Leverage
D. Insolvency
Liquidity
What is another term for ‘acid-test ratio’?
A. Profit margin ratio
B. Current ratio
C. Price-earning ratio
D. Quick ratio
Quick Ratio
