Exit Exam 1 (pt2) 51-100

Question 1

The gasoline cost P17.50 per liter. The inflation rate is predicted to be 13%. How many years to reach the cost of P50 per liter?
A. 50 = 17.50 (1+0.13 )^n
B. 50 = 17.50 (1+0.13 (n))
C. 50 = 17.50 (1-0.13 )^n
D. Insufficient information

Answer 1

A. 50 = 17.50 (1+0.13 )^n

Question 2

A machine has a first cost of P600,000 and a salvage value of P50,000 at the end of its life after 10 years. The annual savings for the use of the machine amounts to P124,900.97. If the annual maintenance cost of a machine is P4,000 and the sinking fund to recover depreciation earns 6%, compute the rate of return of investment.
A. 8%
B. 7%
C.6%
D.9%

Answer 2

C.6%

Question 3

A machine cost P7,350 has a life of 8 years and has a salvage value of P350 at the end of 8 years. Determine its book value at the end of 1 year using Declining Balance Method.
A. P2,534.13
B. P4,332.42
C. P5,023.54
D. P2,533.86

Answer 3

C. P5,023.54

Question 4

The change in the amount of money over a given time period is called the __; it is the most important concept in engineering economy.
A. Income tax
B. Time value of money
C. Interest income
D. None of the above

Answer 4

B. Time value of money

Question 5

Two alternatives, A and B, are being considered. Initial cost of A is P600,000 while that of B is P900,00. A has a high operating cost of P12,000 annually and a short life of 4 years. While B has lower operating cost of P9,000 annually but can be kept for 8 years. Both salvage value is negligible. Rate of return is 6%. Determine which alternative is better using AWC method.
A. Alternative A
B. Alternative B
C. Both alternatives
D. None of the above

Answer 5

B. Alternative B

Question 6

If you want to receive a 7% inflation-free return on your investment and you expect inflation to be 9% per year, what actual interest rate must you earn?
A. 16%
B. -2%
C. 1%
D. 9%

Answer 6

A. 16%

Question 7

A machine has an initial cost of P50,000 and a salvage value of P10,000 after 10 years. What is the book value after five years using straight line depreciation method?
A. P35,000
B. P25,000
C. P15,000
D. P30,000

Answer 7

D. P30,000

Question 8

A business loaned P100,000 for 5 years. What is the ideal payment plan if interest is 12% compounded monthly?
A. P2,424
B. P2,688
C. P2,224
D. P2,808

Answer 8

C. P2,224

Question 9

Engr. Sison borrows P100,000 at 10& effective annual interest. He must pay back the loan over 30 years with uniform monthly payments due on the first day of each month. What does Engr. Sison pay each month?
A. 879
B. 897
C. 978
D. 789

Answer 9

A. 879

Question 10

A machine shop installs a new lathe machine that costs P1,800,000. The machine shop expects annual gross revenue to increase P500,000 while it incurs an annual expense of P50,000 for the machine operations and maintenance. When is the payback period?
A. 4 yrs
B. 3 yrs
C. 5 yrs
D. 2 yrs

Answer 10

A. 4 years

Question 11

Compute for the number of blocks that an ice plant must be able to sell per month to break-even based on the following data:

A. 1,228
B. 1,140
C. 986
D. 1,420

Answer 11

A. 1,228

Question 12

A machine cost P20,000 today. If inflation is 6% per year and interest rate is 10% per year, what will be the appropriate future value of the machine adjusted for inflation in 5 years?
A. P36,300
B. P42,000
C. P38,500
D. P43,100

Answer 12

D. P43,100

Question 13

When will be an amount be tripled with an interest rate of 11.56%
A. 12 yrs
B. 11 yrs
C. 10 yrs
D. 9 yrs

Answer 13

C. 10 years

Question 14

A businessman invests in a medium scale business which cost him P57,000. The net annual return is estimated at P14,000 for each of the next 8 years. Compute for the benefit-cost ration if the annual rate of interest is 18%.
A. 1.00
B. 0.99
C. 1.12
D. 0.92

Answer 14

A. 1.00

Question 15

What is the present worth of a 3-year annuity paying P3,000 at the end of each year with interest at 8% compounded annually?
A. P7,731.29
B. P9,731.79
C. P7,371.29
D. P9,371.79

Answer 15

A. P7,731.29

Question 16

An equipment which cot P200,000 has a useful life of 8 years with a salvage value of P25,000 at the end of its useful life. If the depreciation at the first year is P21,875, what method is used in calculation of depreciation?
A. Straight line method
B. Sinking fund method
C. Declining balance method
D. Sum of the years digit method

Answer 16

A. Straight line method

Question 17

In the cash flow series:
A. Uniform gradient signifies that an income or disbursement changes by the same amount in each interest period
B. Either an increase or decrease in the amount of a cash flow is called he gradient.
C. The gradient in the cash flow may be positive or negative.
D. All of the above

Answer 17

D. All of the above

Question 18

If interest is paid more than once in a year, “i” is the rate of interest per years, compound amount factor (CAF) is:
A. (1+i/m)^n
B. (1+i/n)^m
C. (1+i/n)^1/m
D. (1+i/m)^1/n

Answer 18

A. (1+i/m)^n

Question 19

The interest rate at which the present worth cash flow of a project is zero, or the interest earned by an investment.
A. Rate of return
B. Effective rate
C. Nominal rate
D. Yield

Answer 19

A. Rate of return

Question 20

The depreciation charge in this method is assumed to vary directly to the number of years and inversely to the sum of the year’s digit.
A. Straight line depreciation
B. Sinking fund method
C. Sum of the year’s digit method
D. Declining balance method

Answer 20

C. Sum of the year’s digit method

Question 21

It is the amount of a willing buyer will pay to a willing seller for a property where each has equal advantage and is under no compulsion to buy or sell.
A. Fair value
B. Use value
C. Market value
D. Book value

Answer 21

C. Market value

Question 22

The profit derived from a project or business enterprise without consideration on obligations to financial contributions and claims of others based on profit is known as:
A. Yield
B. Earning value
C. Economic return
D. Expected yield

Answer 22

C. Economic return

Question 23

As applied to capitalized asset, the distribution of the initial cost by periodic changes to operation as in depreciation or the reduction of the depth by either periodic or irrefular prearraged program is called:
A. Ammortization
B. Annuity
C. Depreciation
D. Capital recovery

Answer 23

A. Ammortization

Question 24

What must two investments with the same present worth and unequal lives have?
A. Identical salvage value
B. Different salvage value
C. Identical equivalent unifrom annual cash flows
D. Different equivalent annual cash flows

Answer 24

C. Identical equivalent unifrom annual cash flows

Question 25

When using net present worth calculation to compare two projects, which of the following could invalidate the calculations?
A. Mutually exclusive projects
B. Evalutaion over different periods
C. Non-conventional cash flows
D. Different in the magnitude of the projects

Answer 25

D. Different in the magnitude of the projects

Question 26

For the Q 76-78. The cholesterol content of large chicken eggs is normally distributed with a mean of 200 mg and sd of 15 mg.

What proportion of these eggs have cholesterol above 205 mg?
A. 0.2004
B. .6293
C. 0.7250
D. 0.3707

Answer 26

D. 0.3707

Question 27

For the Q 76-78. The cholesterol content of large chicken eggs is normally distributed with a mean of 200 mg and sd of 15 mg.

What is the probability that the mean cholesterol content of a random sample of 25 of these eggs is less than 205 mg?
A. 0.6293
B. 0.9525
C. 0.5793
D. 1.67

Answer 27

B. 0.9525

Question 28

For the Q 76-78. The cholesterol content of large chicken eggs is normally distributed with a mean of 200 mg and sd of 15 mg.

In the sixty-seven percent of the eggs, the cholesterol content is less than a certain value of “C”. Find the value of “C”.
A. 0.33
B. 206.6
C. 210
D. 193.4

Answer 28

B. 206.6

Question 29

Assume the cholesterol levels in a certain population have mean m=200 and standard deviation of o=24. The cholesterol levels for random sample of n=9 individuals are measured, and the sample mean x is determined. What is the z-score for a sample mean of x=180?
A. -2.75
B.-2.50
C. -0.83
D. 2.50

Answer 29

B. -2.50

Question 30

The vitamin C content of a particular brand of vitamin supplement pills is normally distrbuted with mean of 490 mg and sd of 12 mg. What is the probability that a randomly selected pill contains at least 500 mg of Vitamin C?
A. 0.7967
B. 0.8333
C. 0.0525
D. 0.2033

Answer 30

D. 0.2033

Question 31

To compare the average amount of time that Canadians and Americans spend commuting, a researcher collects a sample of 50 Canadians and 60 Americans. The Canadians spend an average of 4.6 hours a week commuting with standard deviation of 2.9 hours. The man and standard deviation for the sample of Americans is 5.2 hours and 1.3 hours, respectively. The standard error of the difference of sample means is:
a. 2.314
b. 1.023
C. 0.443
d. Cannot be computed as the sample sizes are different.

Answer 31

C. 0.443

Question 32

For Questions 82 to 88. A fisheries researcher wishes to test for a difference in mean weights of a single species of fish caught by fishermen in three different lakes in Nova Scotia.
The significance level for the test will be 0.05. Comple the following partial ANOVA table.

The null hypothesis for this analysis is:
a. Not all the fish populations have the same mean.
b. At least one of the fish populations has a different mean.
C. H1 = H2 = H3
d. M1=H2 = M3= 0

Answer 32

C. H1 = H2 = H3

Question 33

What is the value of sum of squares within (SSW)? a. 11.19
b. 12.19
с. 13.19
d. 14.19

Answer 33

D. 14.19

Question 34

What is the MS Between?
a. 6.52
b. 7.52
с. 8.52
d. 9.52

Answer 34

с. 8.52

Question 35

What is the MS Within?
a. 1.58
b. 2.58
c. 3.58
d. 4.58

Answer 35

a. 1.58

Question 36

The value of F-critical value for this test is:
a. 3.5874
b. 3.8625
c. 3.9824
d. 4.2565

Answer 36

d. 4.2565

Question 37

The value of F-critical value for this test is:
a. 3.5874
b. 3.8625
c. 3.9824
d. 4.2565

Answer 37

d. 4.2565

Question 38

What is the f-calculated value?
a. 4.392
b. 5.392
c. 6.392
d. 7.392

Answer 38

b. 5.392

Question 39

What is the appropriate interpretation of this test?
a. Reiect Ho: All three fish populations have different mean weights.
b. Reject Ho: Exactly two of the three fish populations have the same means.
c. Reject Ho: At least one of the fish populations differs from the others in terms of their mean weight.
d. Fail to reject Ho: There is insufficient evidence for differences in mean weights of the fish from these three populations.

Answer 39

a. Reiect Ho: All three fish populations have different mean weights.

Question 40

A survey found that the average hotel room rate in New Orleans is $88.42 and the average room rate in Phoenix is $80.61. Assume that the data were obtained from two samples of 50 hotels each and that the standard deviation of the populations are $5.62 and $4.83, respectively. At an a = 0.05, can it be concluded that there is a significant difference in the rates?

a. Yes, there is enough evidence to support the claim that the means are not equal. Hence, there is a significant difference in the rates.
b. No, there is not enough evidence to support the claim that the means are not equal. Hence, there is no significant difference in the rates.
c. Data is insufficient to provide conclusion.
d. None of the above.

Answer 40

a. Yes, there is enough evidence to support the claim that the means are not equal. Hence, there is a significant difference in the rates.

Question 41

In a sample of 200 workers, 45% said that they missed work because of personal illness.
Ten years ago, in a sample of 200 workers, 35% said that they missed work because of
personal illness. At an a = 0.01, is there a difference in the proportion?

a. With z-calc of 2.40, there is not enough evidence to support the claim that there is a difference in proportions.
b. With z-calc of 2.04, there is not enough evidence to support the claim that there is a difference in proportions.
c. With z-calc of 2.54, there is enough evidence to support the claim that there is a difference in proportions.
d. With z-cale of 2.74, there is enough evidence to support the claim that there is a difference in proportions.

Answer 41

c. With z-calc of 2.54, there is enough evidence to support the claim that there is a difference in proportions.

Question 42

If correlation coefficient is 0.8, the percentage of variation in the response variable explained by the variation in the explanatory variable is:
a. 0.80%
b. 80%
c. 0.64%
d. 64%

Answer 42

d. 64%

Question 43

Correlation with # 0.05 coefficients mean:
a. Weak relationship
b. Strong relationship
c. Moderate relationship
d. No relationship

Answer 43

c. Moderate relationship

Question 44

There are 1,200 people in the sample - 70% of them are literate. 40% of the mean are literate while 80% of the women are literate. Find the population of men.
a. 200
b. 300
c. 400
d. 500

Answer 44

c. 400

Question 45

The p-value in hypothesis testing represents which of the following. Select the best answer of those provided below.
a. The probability of failing to reject the null hypothesis, given the observed results.
b. The probability that the null hypothesis is true, given the observed results.
c. The probability that the observed results are statistically significant, given that the null hypothesis is true.
d. The probability of observing results as extreme or more extreme than currently observed, given that the null hypothesis is true.

Answer 45

d. The probability of observing results as extreme or more extreme than currently observed, given that the null hypothesis is true.

Question 46

Green Sea turtles have a normally distributed weights, measured in kilograms, with a mean of 134.5 and a variance of 49.0. A particular green sea turtle’s weight has a z-score of
-2.4. What is the weight of this green sea turtle? Round to the nearest whole number.
a. 17 kgs.
b. 151 kgs.
c. 118 kgs.
d. 252 kgs.

Answer 46

c. 118 kgs.

Question 47

Five students take AP Calculus AB one year and AP Calculus BC next year. Their overall course grades (%) are listed below for both courses. Which of the following statistical procedures would be most appropriate to test the claim that student overall course grades are the same in both courses? Assume that any necessary normality requirements hold.

a. Two-tailed two-sample paired/dependent t-test of means.
b. Two-tailed two-sample independent t-test of means.
c. Two-tailed two-sample independent z-test of means.
d. One-tailed two-sample z-test of proportions.

Answer 47

a. Two-tailed two-sample paired/dependent t-test of means.

Question 48

A simple random sample of 5k race times for 32 competitive male runners aged 15-24 years old resulted in a mean 5k race of 16.79 minutes. The simple linear regression equation that fit the sample data was obtained and found to be ý = 21.506 - 0.276x where x represents the age of the runner in years and y represents the 5k race time for a competitive male runner in minutes. When testing the claim that there is a linear correlation between age and 5k race times of competitive male runners, an observed test statistics of (t = -7.87) resulted in an approximate p-value of 0.0001. The proportion of variation in 5k race times that can be explained by the variation in the age of competitive male runners was approximately 0.663. What is the value of the sample linear correlation coefficient? Round 3 decimal places.
a. 0.663
b. 0.814
C. -0.814
d. 0.440

Answer 48

C. -0.814

Question 49

In reference to Question 97, is it reasonable to predict the 5k race time (minutes) of a competitive male runner 73 years of age?
a. Yes - linear correlation between age and 5k race times is statistically significant.
b. Yes - both the sample linear regression equation and an age in years is provided.
c. No - linear correlation between age and 5k race times is not statistically significant.
d. No - the age provided is beyond the scope of our available sample data.

Answer 49

d. No - the age provided is beyond the scope of our available sample data.

Question 50

Which of the following exam scores is better, relative to other students enrolled in the course?
• A psychology exam grade of 86; the mean grade for the psychology exam is 92 with a standard deviation of 3.5
• An economics exam grade of 67; the mean grade for the economics exam is 79 with a standard deviation of 8
• A chemistry exam grade of 62; the mean grade for the chemistry exam is 62 with a standard deviation of 5
a. The psychology exam score is relatively better.
b. The economics exam score is relatively better.
c. The chemistry exam score is relatively better.
d. All of the exam scores are relatively equivalent.

Answer 50

c. The chemistry exam score is relatively better.

Question 51

All of the following increase the width of a confidence interval, except:
a. Increased confidence level
b. Increased variability
c. Increased sample size
d. Decreased sample size

Answer 51

c. Increased sample size