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CORREL > ENGINEERING ECONOMY (TERMS) > Flashcards

ENGINEERING ECONOMY (TERMS) Flashcards

1
Q

A diagram drawn to help visualize and simplify problems having diverse receipts and disbursements is known as

A

Cash Flow

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2
Q

An artificial expense that spreads the purchase price of an asset or another property over a number of years.

A

Depreciation

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3
Q

It is also known as potential service life at which a property is physically able to perform functions as originally designed.

A

Physical Life

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4
Q

It is a series of uniform accounts over an infinite period of time.

A

Perpetuity

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5
Q

It is the 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

Market Value

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6
Q

It is the value which is usually determined by a disinterested third party in order to establish a price that is fair to both the seller and the buyer.

A

Fair Value

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7
Q

The reduction in the money value of a capital asset is called

A

Capital Loss

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8
Q

Which of the following depreciation methods cannot have a salvage value of zero?

A

Declining Balance Method

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9
Q

It is the period, usually in numbers years, needed to completely depreciate an asset.

A

Economic Life

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10
Q

The amount transferred to depreciation is a fixed ratio of the undepreciated balance for the item.

A

Declining Balance Depreciation

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11
Q

The true value of interest rate computed by equations for compound interest for a one-year period is known as

A

Effective Interest

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12
Q

Which of the following is not a variable cost?

A

Insurance Costs

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13
Q

The life wherein a property generates more income than the costs necessary for its operation and maintenance and produces desirable level of profit, is known as

A

Economic Life

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14
Q

Sunk costs include

A

All in the list

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15
Q

What is the length of time, usually in years, for cumulative net annual profit equal to investment?

A

Payback Period

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16
Q

What do you call the present worth of the property which is equal to the original cost less depreciation?

A

Salvage Value

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17
Q

It is the estimated value at the end of the useful life.

A

Salvage Value

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18
Q

The recorded current value of an asset is known as

A

Book Value

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19
Q

It is a method of depreciation where a fixed sum of money is regularly deposited at compound interest in a real or imaginary fund in order to accumulate an amount equal to the total depreciation of an asset at the end of the asset’s estimated life.

A

Sinking Fund Method

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20
Q

In counting the number of days when computing simple interest,

A

The First Day Is Excluded And The Last Day Is Included

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21
Q

It is a method of depreciation whereby the amount to recover is spread uniformly over the estimated life of the asset in terms of the periods or units of output.

A

Straight Line Method

22
Q

What is sometimes called second hand value?

A

Salvage Value

23
Q

It is a type of annuity where the first payment is made after several periods and not at the end of the first period.

A

Deferred Annuity

24
Q

It is the ratio of the interest payment to the principal for a given unit of time and usually expressed as a percentage of the principal.

A

Interest Rate

25
Q

The first cost of any property includes

A

All of the above

26
Q

It is an application of comprehensive techniques to predict the feasibility or economic outcome of a proposed engineering project.

A

Engineering Economy

27
Q

It is the cost of things that are neither labor nor material.

A

Expenses (Indirect cost/Fixed cost?)

28
Q

Which of the following is common to both the fixed and operating cost of an enterprise?

A

Interest

29
Q

It is a method of computing depreciation in which the annual charge is a fixed percentage of the depreciated book value at the beginning of the year to which the depreciation applies.

A

Declining Balance Method

30
Q

It is the worth of property which is equal to the original cost less depreciation.

A

Book Value

31
Q

It is an interest rate which specifies the actual rate of interest in one year.

A

Effective Rate

32
Q

It is defined as the future value minus the present value.

A

Interest

33
Q

A periodic cost that remains more or less unchanged irrespective of the output level or sales revenue, such as depreciation, insurance, interest, rent salaries, and wages.

A

Fixed Cost

34
Q

The alternatives which are standalone solutions for engineering economy problems involve

A

All in the list

35
Q

Which of the following statements is correct?

a. 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).
b. 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.
c. All of the choices
d. The number of years required to recover the initial cash investment in a project, is called
Pay Back period (PBP).

A

All of the choices

36
Q

It is the current amount of money or its equivalent paid to acquire goods and services.

A

Price

37
Q

Period over which an asset (machine, property, computer system, etc.) Is expected to be usable, with normal repairs and maintenance, for the purpose it was acquired, rented, or leased

A

Economic Life

38
Q

It refers to the income needed to cover a manufacturer’s total expenses in a given period of time.

A

Break-Even Point

39
Q

Which of the following is not a fixed cost?

A

Rent

40
Q

It is the length of time which the property may be operated at a profit.

A

Economic Life

41
Q

The efficiency of an investment is known as

A

Rate of Return

42
Q

It is a type of annuity where the payments are made at the end of each payment period starting from the first period.

A

Ordinary Annuity

43
Q

This refers to the length of time of property ownership by a specific person or entity from cradle to grave.

A

Ownership Life

44
Q

The amount deducted immediately from a loan, which is supposed to be the payment in some future time for the use of the said loan, is called

A

Discount

45
Q

The alternatives which are standalone solutions for engineering economy problems involve

A

All of these

46
Q

Aside from the straight line method of depreciation, what other method assumes a uniform annual depreciation

A

Sinking Fund Method

47
Q

It is the simplest form of a business organization.

a Sole Proprietorship
b. Partnership
c. Enterprise
d. Corporation

A

Sole Proprietorship

48
Q

The reduction in the money of a capital asset is called

a. Capital gain
b. Capital loss
c. Debit
d. Deficit

A

Capital loss

49
Q

The reduction of the value of an asset due to constant use and passage of time.

a. Scrap Value
b. Depletion
c Depreciation
d. Book Value

A

Depreciation

50
Q

When free competition exists, the price of a product will be that value where supply is equal to the demand.

a. Law of Supply
b. Law of Demand
c. Law of Diminishing Return
d Law of Supply and Demand

A

Law of Supply and Demand

51
Q

Which of the following depreciation methods cannot have a salvage value of zero?

a. Straight Line Method
b. Sinking Fund Method
c. Declining Balance Method
d. SYD Method

A

Declining Balance Method

CORREL (24 decks)

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