Engineering Economymcq
Engineering Economymcq
Engineering Economymcq
D. 13 months
5. Engr. Trinidad loans from a loan firm an
amount of P100,000 with a rate of simple
interest of 20% but the interest was deducted
from the loan at the time the money was
borrowed. If at the end of one year, she has to
pay the full amount of P100,000, what is the
at 5.2%?
A. P39.01
B. P39.82
C. P39.45
D. P39.99
16. A loan for P50,000 is to be paid in 3 years at
the amount of P65,000. What is the effective rate
of money?
A. 9.01 %
B. 9.14 %
C. 9.31 %
D. 9.41 %
17. What is the effective rate corresponding to
18% compounded daily? Take 1 year is equal to
360 days.
A. 16.02 %
B. 16.28 %
C. 16.32 %
D. 16.47 %
C. 14.2 years
D. 15.3 years
22. By the condition of a will, the sum of P20,000
is left to a girl to be held in trust fund by her
guardian until it amounts to P50,000. When will
the girl receive the money if fund invested at 8%
compounded quarterly?
A. 11.23 years
B. 11.46 years
C. 11.57 years
D. 11.87 years
23. A sum of P1,000 is invested now and left for
eight years, at which time the principal is
withdrawn. The interest has accrued is left for
another eight years. If the effective annual
interest rate is 5%, what will be the withdrawal
amount at the end of the 16th year?
A. 19.61 %
A. P693.12
B. 19.44 %
B. P700.12
C. 19.31 %
C. P702.15
D. 19.72 %
18. What rate of interest compounded annually
is the same as the rate of interest of 8%
compounded quarterly?
D. P705.42
24. Mandarin Bank advertises 9.5% account that
yields 9.84% annually. Find how often the
interest is compounded.
A. 8.07 %
A. Monthly
B. 8.12 %
B. Bimonthly
C. 8.16 %
C. Quarterly
D. 8.24 %
19. Which of these gives the lowest effective rate
of interest?
A. 12.35 % compounded annually
B. 11.90 % compounded annually
C. 12.20 % compounded annually
D. 11.60 % compounded annually
20. An amount of P1,000 becomes P1,608.44
D. Annually
25. A student plans to deposit P1,500 in the bank
now and another P3,000 for the next 2 years. If
he plans to withdraw P5,000 three years from
after his last deposit for the purpose of buying
shoes, what will be the amount of money left in
the bank after one year of his withdrawal?
Effective annual interest rate is 10%.
A. P1,549.64
C. 3.95 %
D. 3.98 %
15. What is the ordinary interest on P1,500.50
for 182 days
C. P54.66
D. P37.56
27. What is the present worth of two P 100
payments at the end of the third year and fourth
year? The annual interest rate is 8%.
A. P 150.56
B. P 152.88
C. P 153.89
D. P 151.09
28. A firm borrows P2,000 for 6 years at 8%. At
the end of 6 years, it renews the loan for the
amount due plus P2,000 more for 2 years at 8%.
What is the lump sum due?
A. P 3,260.34
B. P 3,280.34
C. P 3,270.34
D. P 3,250.34
29. In year zero, you invest P 10,000.00 in a 15%
security for 5 years. During that time, the
average annual inflation is 6%. How much in
terms of year zero pesos will be in the account at
maturity?
A. P 15,030.03
B. P 20,113.57
C. P 18,289.05
D. P 16,892.34
30. The institute of Electronics and
Communications Engineers of the Philippines
(IECEP) is planning to put up its own building.
Two proposals being considered are:
A. The construction of the building now to cost P
400,000
B. The construction of a smaller building now to
cost P300,000 and at the end of 5 years, an
extension to be added to cost P 200,000.
By how much is proposal B more economical than
proposal A if interest rate is 20% and
depreciation to be neglected?
B. P1,459.64
A. P 19,122.15
C. P1,345.98
B. P 19,423.69
D. P1,945.64
26. You borrow P3,500.00 for one year from a
friend at an interest rate of 1.5% per month
instead of taking a loan from a bank at a rate of
18% per year. How much lesser you will pay by
borrowing the money from the bank?
A. P 62.44
B. P44.55
37. A young engineer borrowed P 10,000 at 12%
interest and paid P 2,000 per annum for the last
4 years. What does he have to pay at the end of
the fifth year in order to pay off his loan?
A. P 6,999.39
B. P 6,292.93
C. P 6,222.39
D. P 6,922.93
38. Miss Calledo deposited P 1,000, P 1,500 and
P 2,000 at the end of the 2nd year, 3rd year and
4th year, respectively in a savings account which
earned 10% per annum. How much is in the
account at the end of the 4th year?
A. P 4,880.00
B. P 4,820.00
C. P 4,860.00
D. P 4,840.00
39. A P 1,000,000 issue of 3%, 15-year bond was
sold at 95%. What is the rate of interest of this
investment?
A. 3.0%
B. 3.4%
C. 3.7%
D. 4.0%
40. A P 1, 000, 6% bond pays dividend
semiannually and will be redeemed at 110% on
June 21, 204. It is bought on June 21, 2001 to
yield 4% interest. Find the price of the bond.
A. P 1,122.70
B. P 1,144.81
C. P 1,133.78
C. P 19,518.03
D. P 19,624.49
31. What is the present worth of a P500 annuity
starting at the end of the third year and
continuing to the end of the fourth year, if the
annual interest rate is 10 %?
A. P 727.17
B. P 717.17
B. P 2,100.00
C. P 2,200.00
D. P 2,300.00
43. ABC Corporation makes it a policy that for
any new equipment purchased, the annual
depreciation cost should not exceed 20% of the
first cost at any time with no salvage value.
Determine the length of service life necessary if
the depreciation used is the SYD method.
A. 7 eyars
B. 8 years
C. 9 years
D. 10 years
44. An asset is purchased for P 9,000.00. Its
estimated economic life is 10 years after which it
will be sold for P 1,000.00. Find the depreciation
in the first three years using sum-of-years digit
method
A. P 3,279.27
B. P 3,927.27
C. P 3,729.27
D. P 3,792.72
45. Shell Philippines, a multinational company,
has a total gross income for a particular year of P
50,000,000. The taxable income after taking all
deductions except for depletion is P 18,500,000.
What is the allowable depletion allowance for
that particular year? Take percentage of gross
income for oil as 22%.
A. P 9,358.41
B. P 9,228.45
A. P 43,600.10
B. P 43,489.47
C. P 43,263.91
D. P 43,763.20
36. A person buys a piece of lot for P 100,000
downpayment and 10 deferred semi-annual
payments of P 8,000 each, starting three years
from now. What is the present value of the
investment if the rate of interest is 12%
compounded semi-annually?
A. P 142,999.08
B. P 143,104.89
C. P 142,189.67
D. P 143,999.08
the item has a unit price of P 600, how many
units must be manufactured each month for the
manufacturer to break even if the monthly
overhead is P428,000
A. 1,033
B. 1,037
C. 1,043
D. 1,053
48. A manufacturing firm maintains one product
assembly line to produce signal generators.
Weekly demand for the generators is 35 units.
The line operates for 7 hours per day, 5 days per
week. What is the maximum production time per
unit in hours required of the line to meet the
demand?
A. 1.0 hour per unit
D. P 1,155.06
41. A VOM has a selling price of P 400. If its
selling price is expected to decline at a rate of
10% per annum due to obsolescence, what will
be its selling price after 5 years?
A. P 222.67
B. P 212.90
C. P 236.20
D. P 231.56
42. A machine costs of P 8,000 and an estimated
life of 10 years with a salvage value of P 500.
What is its book value after 8 years using
straight line method?
A. P 2,000.00
engineering applications, designs and projects?
A. Economic Analysis
B. Engineering cost analysis
C. Engineering economy
D. Design cost analysis
52. What is considered as the standard unit
which forms the basis of a countrys domestic
money supply?
A. Monetary unit
B. Currency
C. Foreign exchange
D. Cash or check
53. What is defined as any tangible economic
product that contributes directly or indirectly to
the satisfaction of human want?
A. Services
B. Goods
C. Commodities
D. Goods or commodities
54. What is defined as any tangible economic
activity that contributes directly or indirectly to
the satisfaction of human want?
A. Services
B. Goods
C. Commodities
D. Goods or commodities
C. P 9,250.00
D. P 9,308.45
46. The Saudi Arabian Oil Refinery developed an
oil well which is estimated to contain 5,000,000
barrels of oil at an initial cost of $ 50,000,000.
What is the depletion charge during the year
where it produces half million barrels of oil? Use
Unit or Factor method in computing depletion.
A. $ 5,000,000.00
B. $ 5,010,000.00
C. $ 5,025,000.00
D. $ 5,050,000.00
47. A manufacturer produces certain items at a
labor cost of P 115 each, material cost of P 76
each and variable cost of P 2.32 each. If
satisfied?
A. Producer products
B. Consumer products
C. Luxury
D. Necessity
58. 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
59. What is considered as the basic consuming or
demanding unit of a commodity?
A. Seller
B. Manufacturer
C. Producer
D. Buyer or consumer
60. What is defined as an entity which makes
product, good or services available to buyer or
consumer in exchange of monetary
consideration?
A. Seller
B. Manufacturer
A. 1,000 feet
B. 1,040 feet
C. 1,100 feet
D. 1,120 feet
50. A leading shoe manufacturer produces a pair
of Lebron James signature shoes at a labor cost
of P 900.00 a pair and a material cost of P 800.00
a pair. The fixed charges on the business are P
5,000,000 a month and the variable costs are P
400.00 a pair. Royalty to Lebron James is P 1,000
per pair of shoes sold. If the shoes sell at P 5,000
a pair, how many pairs must be produced each
month for the manufacturer to break-even?
A. 2.590
A. Monopsony
A. Atomistic competition
B. Monopoly
B. No-limit competition
C. Bilateral monopsony
C. Free-for-all competition
C. Oligopsony
D. Monopoly
65. If there is only one seller and many buyers,
the market situation is ________ .
A. Duopsony
B. Oligopoly
C. Oligopsony
D. Monopoly
66. If there are many sellers and few buyers, the
market situation is _________ .
A. Duopsony
C. Oligopoly
D. Oligopsony
62. What market situation exists where there are
few sellers and few buyers?
B. Oligopsony
B. Oligopoly
B. Monopoly
D. Necessity
57. What refers to the goods and services that
A. Perfect competition
A. Monopsony
A. Oligopoly
C. 2,712
D. Bilateral monopoly
64. What is the market situation exist when
there are many buyers and many sellers?
D. Buyer or consumer
61. What is a market situation whereby there is
only one buyer of an item for which there is no
goods substitute?
C. Luxury
B. 2,632
D. 2,890
51. What is defines as the analysis and
evaluation of the monetary consequences by
using the theories and principles of economics to
only one seller?
C. Producer
D. Heterogeneous market
71. What refers to the market situation in which
any given product is supplied by a very large
number of vendors and there is no restriction
against additional vendors from entering the
market?
A. Perfect competition
B. Oligopoly
C. Oligopsony
D. Monopoly
72. Aside from many sellers and many buyers,
which one is a characteristic of perfect
competition?
A. Homogeneous product
B. Free market entry and exit
C. Perfect information and absence of all
economic friction
C. Bilateral oligopoly
D. Bilateral Oligopsony
63. What market situation exists where there is
only one buyer and
B. Bilateral monopoly
C. Natural monopoly
D. Ordinary monopoly
76. When one of the factors of production is
fixed in quantity or is difficult to increase,
increasing the other factors of production will
result in a less than proportionate increase in
output. This statement is known as the:
A. Law of diminishing return
B. Law of supply
C. Law of demand
D. Law of supply and demand
77. What refers to the need, want or desire for a
product backed by the money to purchase it?
A. Supply
B. Demand
C. Product
D. Good
78. What refers to the amount of a product made
available for sale?
A. Supply
B. Demand
B. Oligopoly
C. Oligopsony
D. Monopoly
67. Oligopoly exists when there is/are:
A. Few sellers and few buyers
B. Few sellers and many buyers
C. Many sellers and few buyers
D. One seller and few buyers
68. Duopsony is a market situation where there
is/are:
A. Few sellers and few buyers
B. Few sellers and many buyers
C. Many sellers and few buyers
D. One seller and few buyers
69. Duopoly is a market situation where there
is/are:
A. Few sellers and few buyers
B. Few sellers and many buyers
C. Many sellers and few buyers
A. Effective rate of interest
B. Nominal rate of interest
A. 300
B. 360
C. 365
D. 366
83. One bankers year is equivalent to ______
days.
A. 300
B. 360
C. 365
D. 366
84. What refers to the cumulative effect of
elapsed time on the money value of an event,
based on the earning power of equivalent
D. Good
79. Under conditions of perfect competition, the
price at which any given product will be supplied
and purchased is the price that will result in the
supply and the demand being equal. This
statement is known as the:
A. Law of diminishing return
B. Law of supply
C. Law of demand
A. Utility
B. Necessity
C. Compound interest
D. Simple interest
82. Under ordinary simple interest, how many
days in one year?
C. Product
C. Simple interest
D. Principal
88. What refers to 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. Return of investment
B. Interest rate
C. Yield
D. Rate of return
89. 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?
C. Commodity
D. Stock
81. What is defined as the interest on a load or
principal that is based only on the original
amount of the loan or principal?
C. Annuity due
D. Deferred annuity
94. What is the type of annuity where the
payments are made at the beginning of the each
period starting from the first period?
A. Ordinary annuity
B. Perpetuity
C. Annuity due
D. Deferred annuity
95. What is the type of annuity that does not
have a fixed time span but continues indefinitely
or forever?
A. Ordinary annuity
B. Perpetuity
C. Annuity due
D. Deferred annuity
96. What is the type of annuity where the first
payment does not begin until some later date in
the cash flow?
A. Ordinary annuity
B. Perpetuity
C. Compound interest
C. Annuity due
D. Simple interest
90. What refers to the cost of borrowing money
or the amount earned by a unit principal per unit
time?
A. Yield rate
B. Rate of return
C. Rate of interest
D. Economic return
91. A uniform series of payment occurring at
equal interval of time is called ______.
A. Annuity
B. Amortization
C. Depreciation
D. Bond
92. What is the term for an annuity with a fixed
time span?
A. Ordinary annuity
B. Perpetuity
C. Annuity certain
D. Annuity due
93. What is the type of annuity where the
payments are made at the end of each period
starting from the first period?
D. Deferred annuity
97. Which is NOT an essential element of an
ordinary annuity?
A. The amounts of all payments are equal.
B. The payments are made at equal interval of
time.
C. The first payment is made at the beginning
of the first period.
D. Compound interest is paid on all amounts
in the annuity.
98. What is defined as a financial security note
issued by business or corporation and by the
government as a means of borrowing long-term
fund?
A. T-bills
B. Securities
C. Bond
D. Bank notes
99. What refers to the present worth of all the
amount the bondholder will receive through his
possession of the bond?
A. Par value of bond
B. Face value of bond
A. Ordinary annuity
B. Perpetuity
C. Mortgage bond
D. Debenture bond
106. A bond without any security behind them
except a promise to pay by the issuing
corporation is called ______.
A. Joint bond
B. Debenture bond
C. Trust bond
D. Common bond
107. A type of bond where the corporation
pledges securities which it owns such as the
D. Redemption value
112. What is defined as the reduction or fall of
the value of an asset due to constant use and
passage of time?
A. Depletion
B. Inflation
C. Depreciation
D. Deflation
113. 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?
or more corporations?
A. Mortgage bond
A. Mortgage bond
B. Joint bond
B. Joint bond
C. Tie-up bond
C. Security bond
D. Trust bond
103. What type of bond whose guaranty is in lien
on railroad equipment, such as freight and
passenger cars, locomotives, etc.?
A. Railroad bond
B. Equipment obligation bond
C. Equipment bond
D. Equipment trust bond
104. A type of bond to which are attached
coupons indicating the interest due and the date
when such interest is to be paid is called ______.
A. Registered bond
A. Preferred bond
B. Coupon bond
B. Registered bond
C. Mortgage bond
C. Incorporators bond
D. Callable bond
110. What is the feature of some bonds whereby
the issuer can redeem it before it matures?
A. Registered bond
A. Return clause
B. Callability
C. Recall clause
D. Call class
111. The price at which the callable bond will be
redeemed from the bondholder is called ______.
A. Par value
B. Call value
C. Face value
income
B. Fixed percentage of gross income or 50%
of the net taxable income
C. 50% of the fixed percentage of gross
income or 50% of the net taxable income
D. 50% of the fixed percentage of gross
income or the net taxable income
124. The depletion allowance method of
D. Demand depreciation
120. The functional depreciation is sometimes
called ______.
A. Demand depreciation
B. Percentage method
B. Adolescence
C. Factor method
C. Life depreciation
D. Failure depreciation
121. 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
122. What are the common methods of
computing depletion charge?
A. Rational method and irrational method
B. Conservative method and conventional
method
C. Unit method and percentage method
D. Discrete method and depletion allowance
method
123. Under the depletion allowance method in
computing depreciation, the depletion charge is
equal to either ______ whichever is smaller.
A. Fixed percentage of gross income or the
net taxable
following represents the first cost?
A. The original purchase price and freight
charges
B. Installation expenses
C. Initial taxes and permit fees
D. All of the above
135. The process of determining the value or
worth of a physical property for specific reason is
called ______.
A. Investment
B. Valuation
A. Book value
B. Market value
units in property
C. Fair value
D. Franchise value
132. 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
133. The first cost to be incurred if the piece of
equipment now in place had been bought for a
second hand dealer or some other business is
called ______.
A. Material cost
B. Fixed cost
C. First cost
D. In-place value
134. In computing depreciation of an equipment,
which of the
C. Partnership
D. Organization
147. What is the simplest form of business
organization?
C. Economy
D. Depletion
136. The unrecovered depreciation which results
due to poor estimates as to the life of the
equipment is called ______.
A. Sunk cost
B. Economic life
C. In-place value
D. Annuity
137. What refers to the present worth of cost
associated with an asset for an infinite period of
time?
A. Annual cost
B. Increment cost
C. Capitalized cost
D. Operating cost
138. Capitalized cost of a project is also known
as ______.
A. Infinite cost
B. Life cycle cost
C. Life cost
D. Project cost
139. What is normally used to compare
alternatives that accomplish the same purpose
but have unequal lives?
A. Capitalized cost method
B. Present worth method
C. Annual cost method
D. MARR
140. What method is often used in municipal
project evaluations where benefits and costs
accrue to different segments of the community?
A. Annual cost method
152. Aggregation of individuals formed for the
purpose of conducting a business and recognized
by law as a fictitious person is called ______.
A. Partnership
B. Investors
C. Corporation
A. Sole proprietorship
B. Partnership
C. Enterprise
D. Corporation
148. Double taxation is a disadvantage of which
business organization?
A. Sole proprietorship
B. Partnership
C. Corporation
D. Enterprise
149. In case of bankruptcy of a partnership,
A. The partners are not liable for the
liabilities of the partnership
B. The partnership assets (excluding the
partners personal assets) only will be used to
B. Capital recovery
D. Stockholders
153. An association of two or more persons for
the purpose of engaging into a business for
profit is called ______.
A. Entrepreneurship
B. Partnership
C. Proprietorship
D. Corporation
154. What represents the ownership of
stockholders who have a residual claim on the
assets of the corporation after all other claims
have been settled?
A. Authorized capital stock
B. Preferred stock
C. Incorporator stock
D. Common stock
155. What stock represents ownership and
enjoys certain preferences than ordinary stock?
A. Authorized stock
B. Preferred stock
C. Incorporators stock
D. Presidential stock
156. The amount of companys profit that the
board of directors of the corporation decides to
distribute to ordinary shareholders is called
______.
A. Dividend
B. Return
C. Share of stock
D. Equity
157. What refers to the residual value of a
companys assets after all outside liabilities
(shareholders excluded) have been allowed for?
A. Dividend
B. Equity
C. Return
C. Worksheet
D. Trial balance
171. The original record of a business
transaction is recorded in this book.
B. Property
D. Par value
158. What refers to the claim of anyone to
ownership?
A. Proprietorship
B. Assets
C. Fixed asset
C. Equity
D. Liability
159. Cash money and credit necessary to
establish and operate an enterprise are
generally called ______.
D. Intangible asset
165. What refers to the interest rate at which the
present work of the cash flow on a project is zero
of the interest earned by an investment?
A. Economic return
A. Capital
B. Yield
B. Funds
C. Rate of return
C. Assets
D. Liabilities
160. What represents the share of participation
in business organizations?
A. Franchise
B. Partnership
C. Stock
D. Corporation
161. The profit derived from a project or
business enterprise without consideration of
obligations to financial contributors and claims
of others based on profit is known as ______.
A. Yield
B. Economic return
C. Earning value
D. Gain
162. ______ is the element of value which a
business has earned through the favorable
consideration and patronage of its costumers
arising from its well known and well conducted
policies and operations.
D. Return of investment
166. What is another term for current assets?
A. Fixed assets
B. Non-liquid assets
C. Liquid assets
D. Ccash
167. What is an accounting term that represents
an inventory account adjustment?
A. Cost of goods sold
B. Cost accounting
C. Standard cost
D. Overhead cost
168. What is the change in cost per unit variable
change called?
A. Variable cost
B. Incremental cost
C. Fixed cost
D. Supplemental cost
169. What is used to record historical financial
transactions?
A. Status company
A. Bookkeeping system
B. Big income
B. Ledger system
C. Known owners
C. Balance check
D. Goodwill
163. Which of the following is an example of
intangible asset?
A. Work book
A. Cash
B. Journal
C. Ledger
C. Furnitures
D. Account book
172. All the proceeds which are received by the
business as a result of the sale of goods is called
______.
A. Net income
B. Gross income
C. Net revenue
D. Total sales
173. All are classified under direct labor
expenses EXCEPT one. Which one?
A. Inspection cost
B. Testing cost
C. Assembly cost
D. Supervision cost
174. What is a measure of the average speed
with which accounts receivable are collected?
A. Current ratio
B. Quick ratio
C. Acid test ratio
D. Receivable turnover
175. The ratio of the net income before taxes to
net sales is called ______.
A. Current ratio
B. Inventory turnover
C. Profit margin ratio
D. Price-earnings ratio
176. What do you call a one-time credit against
taxes?
D. Patents
the invested money is needed?
A. Rule of 48
B. Rule of 36
C. Rule of 24
D. Rule of 72
178. 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
179. What is the reduction in the money value of
capital asset is called?
A. Capital expenditure
B. Capital loss
C. Loss
D. Deficit
180. What refers to the negotiable claim issued
by a bank in lien of a term deposit?
A. Time deposit
B. Bond
C. Capital gain certificate
D. Certificate of deposit
181. What denotes in the fall in the exchange
rate of one currency in terms of the others? This
term is usually applies to the floating exchange
rate.
is called?
A. Balanced sheet
B. Ledger
not available for consumption rather than
consumer really want to save?
A. Compulsory saving
B. Consumer saving
C. Forced saving
D. All of the above
184. The flow back of profit plus depreciation
form a given project is called ______.
A. Capital recovery
B. Cash flow
C. Economic return
D. Earning value
185. As applied to capitalized asset, the
distribution of the initial cost by a periodic
changes to operation as in depreciation or the
reduction of a debt by either periodic or irregular
prearranged programs is called ______.
A. Annuity
B. Amortization
C. Capital recovery
D. Annuity factor
186. Capitalized cost of any structure or property
is computed by which formula?
A. First cost + interest of first cost
B. Annual cost interest of first cost
C. First cost + cost of perpetual maintenance
D. First cost + salvage value
187. The true value of interest rate computed by
equations for compound interest for a 1 year
period is known as ______.
A. Due credit
A. Currency appreciation
B. Tax credit
B. Currency depreciation
A. Expected return
C. Credible credit
C. Currency devaluation
B. Nominal interest
D. Revenue credit
177. What is used when a quick estimate of the
doubling time for
A. Net sale
D. Currency float
182. The deliberate lowering of the price of a
nations currency in terms of the accepted
standard (Gold, American dollar or the British
pound) is known as ______.
C. Effective interest
D. Economic return
188. Return on investment ratio is the ratio of
the:
B. Owners equity
A. Currency appreciation
C. Inventory turnover
B. Currency depreciation
C. Currency devaluation
share
D. Currency float
D. Quick assets
190. What is another term for acid-test ratio?
A. Current ratio
B. Quick ratio
C. Profit margin ratio
D. Price-earnings ratio
191. What is a government bond which has an
indefinite life rather than a specific maturity?
A. Coupon
B. T-bill
C. Debenture
D. Consol
192. A form of business firm which is owned and
run by a group of individuals for their mutual
benefit is called ______.
inventory at hand
D. Net credit sales to average net receivable
189. Gross margin is the ratio of the gross profit
to ______.
deducted from the principal amount upon release
of money to a borrower. Let us therefore assume
that you applied for a loan with the bank and the
P80000 was approved at an interest rate of 14%
of which P11200 was deducted and you were
given ac check of P68800. Since you have to pay
the amount of P80000 one year after, what then
will be the effective interest rate?
A. 16.28%
A. Liquidity
B. 17.30%
A. Cooperative
B. Solvency
C. 38.51%
B. Corporation
C. Relative risk
C. Enterprise
D. Partnership
193. What is a stock of a product which is held
by a trade body or government as a means of
regulating the price of that product?
A. Stock pile
B. Hoard stock
C. Buffer stock
D. Withheld stock
194. The ability to meet debts as they become
due is known as ______.
A. Solvency
B. Leverage
C. Insolvency
D. Liquidity
195. The ability to convert assets to cash quickly
is known as ______.
A. Solvency
B. Liquidity
D. 39.31%
253. Mr. J. Dela Cruz borrowed money from the
bank. He received from the bank P1,340.00 and
promised to pay P1,500.00 at the end of 9
months. Determine the simple interest rate and
the corresponding discount rate or often referred
to as the Bankers Discount.
A. 15.92% ; 13.73%
B. 12.95% ; 17.33%
C.18.28% ; 13.12%
D. 19.25% ; 13.33%
254. A man borrowed from the bank under a
promissory note that he signed in the amount of
P25000.00 for a period of 1year. He received only
the amount of P21,915.00 after the bank
collected the advance interest and an additional
amount of P85.00 for notarial and inspection
fees. What was the rate of interest that the bank
collected in advance?
B. Price-earnings ratio
A. 13.64%
B. 16.43%
D. Quick ratio
251. A price tag of P1200 is specified if paid
C.18.37%
D. 10.32%
A. P4186.43
B. P4133.33
C. P5124.54
D. P5625.43
257. Mr. Bautista made a money market
placement of P1,000,000 for 30 days at 7.5% per
year. If withholding tax is 20%, what is the net
interest that Mr. Bautista will receive at the end
of the month?
A. P3,000
A. P18,800
B. P18,000
C. P19,000
B. P6,000
A. 12.25
C. P4,000
B. 12.75
D. P5,000
258. A bill for motorboat specifies the cost as
P1,200 due at the end of 100days but offers a 4%
discount for cash in 30days. What is the highest
rate, simple interest at which the buyer can
afford to borrow money in order to take
advantage of the discount?
A. 18.4%
B. 20.9%
C. 19.6%
D. 21.4%
259. In buying a computer disk, the buyer was
offered the options of paying P250 cash at the
end of 30days or P270 at the end of 120days. At
what rate is the buyer paying simple interest if
he agree to pay at the end of 120days?
C. 11.75
D. 11.95
262. If you borrowed money from your friend
with simple interest of 12%, find the present
worth of P50,000 which is due at the end of
7months.
D. P18,400
256. P4000 is borrowed for 75days at 16% per
annum simple interest. How much will be due at
the end of 75days?
D. P92.76
267. The amount of P12800 in 4years at 5%
compounded quarterly is _____.
A. P14,785.34
A. P46,200
B. P16,311.26
B. P46,729
C. P15,614.59
C. P44,893
D. P45,789
263. A man borrowed P2000 from a bank and
promise to pay the amount for 1year. He received
only the amount of P1,920 after the bank
collected an advance interest of P80. What was
the rate of discount and the rate of interest that
the bank collected in advance?
D. P15,847.33
268. A man borrows money from a bank which
uses a simple discount rate of 14%. He signs a
promissory note promising to pay P500.00 per
month at the end of 4th, 6th, and 7th month
respectively. Determine the amount of money
that he received from the bank.
A. P1403.68
A. 32%
A. 4% ; 4.17%
B. P1102.37
B. 28%
B. 4% ; 4.71%
C. P1340.38
C.40%
C. 3% ; 3.17%
D. 25%
260. On March 1, 1996 Mr. Sarmiento obtains a
loan of P1500 from Mr. Avila and signs a note
promising to pay the principal and accumulated
simple interest at the rate of 5% at the end of
120days. On May 15, 1996, Mr. Avila discounts
the note at the bank whose discount rate is 6%.
What does he receive?
A. P2,201.48
B. P1,513.56
D. 3% ; 3.71%
264. An engineer promised to pay P36,000 at the
end of 90days. He was offered a 10% discount if
he pays in 30 days. Find the rate of interest.
D. P1030.28
269. A nominal interest of 3% compounded
continuously is given on the account. What is the
accumulated amount of P10,000 after 10 years?
A. P13,610.10
A. 64.6%
B. P13,498.60
B. 66.6%
C. P13,500.10
C. 65.6%
D. 67.6%
265. A man is required to pay P200 at the end of
D. P13,439.16
270. BY the condition of a will, the sum of P2000
is left to a girl to be held in trust fund by her
guardian until it amount to P50000.00. When will
C. P1,123.29
D. P938.20
261. A deposit of P110,000 was made for 31days.
The net interest after deducting 20% withholding
tax is P890.36. Find the rate of return annually.
months.
A. P163,475.37
A. 7.98 years
B. 15.8%
B. 11.57 years
C. 19.6%
C. 10.34 years
D. 16.4%
266. Compute the discount if P2000 is
discounted for 6 months at 8% simple interest.
B. P158,270.37
A. P29.67
C. P178,362.37
B. P76.92
D. P183,327.37
273. If the nominal interest rate is 3%, how much
is P5000 worth in 10 years in a continuously
compounded account?
A. P5750
B. P7500
C. P6750
D. P6350
274. P200,000 was deposited for a period of 4
years and 6 months and bears on interest of
P85649.25. What is the rate of interest if it is
compounded quarterly?
C. P67.29
D. 10%
278. What is the equivalent rate if it is
compounded quarterly?
A. 7.03%
B. 9.03%
C. 8.03%
D. 10.03%
279. What is the effective rate if it is
compounded quarterly?
A. 7.28%
A. 8%
B. 9.28%
B. 7%
C. 8.28%
C. 6%
D. 5%
275. How many years will P100,000 earn a
compound interest of P50,000 if the interest rate
is 9% compounded quarterly?
A. 3.25 years
B. 5.86 years
C. 4.55 years
D. 2.11 years
276. A certain amount was deposited 5 years and
9 months ago at an interest of 8% compounded
quarterly. If the sum now is P315,379.85, how
much was the amount deposited?
A. P200,000
B. P240,000
C. P180,000
D. 10.28%
280. How will it take a money to double itself if
invested at 5% compounded annually?
A. 12.2 years
B. 14.2 years
C. 13.2 years
D. 15.2years
281. Compute the effective annual interest rate
which is equivalent to 5% nominal annual
interest compounded continuously.
A. 5.13%
B. 5.26%
C. 4.94%
D. 4.90%
282. Find the time required for a sum of money
to triple itself at 5% per annum compounded
D. 10.45 years
271. A man expects to receive P25,000 in 8
years. How much is that worth now considering
interest at 8% compounded quarterly?
A. P13,859.12
B. P13,675.23
C. P13,958.33
D. P13,265.83
272. P500,000 was deposited at an interest of
6% compounded quarterly. Compute the
compound interest after 4 years and 9
A. 3.92%
B. 3.80%
C. 4.10%
D. 4.09%
285. What is the nominal rate of interest
compounded continuously for 10 years if the
compound amount factor is equal to 1.34986?
A. 3%
B. 5%
C. 4%
D. 6%
286. American Express Corp. charges 1.5%
interest per month, compounded continuously on
the unpaid balance purchases made on this
credit card. Compute the effective rate of
interest.
A. 19.72%
B. 21.20%
C. 20.25%
D. 19.90%
287. If the nominal interest is 12% compounded
continuously, compute the effective annual rate
if interest.
A. 12.75%
D. P260,000
For Problems 277-279:
When compounded Bi-monthly, P15000 becomes
P22,318.30 after 5years.
277. What is the nominal rate of interest?
A. 7%
B. 9%
C. 8%
continuously for 8 years if the present worth
factor is equal to 0.6187835?
A. 4%
B. 6%
C. 5%
D. 7%
291. What is the difference of the amount 3
years from now for a 10% simple interest and
10% compound interest per year? (P5000
accumulated)
A. P155
B. same
C. P100
D. P50
292. Find the discount if P2,000 is discounted for
6 months at 8% compounded quarterly.
A. P76.92
B. P77.66
C. P80.00
D. P78.42
293. If a sum of money triples in a certain period
of time at a given rate interest, compute the
value of the single payment present worth factor.
A. 0.333
B. 0.292
C. 3.000
D. 1.962
294. If the single payment amount factor for a
period of 5 years is 1.33822. What is the nearest
value of the interest rate?
continuously.
A. 21.97 years
B. 18.23 years
C. 25.34 years
D. 23.36 years
283. A man wishes to have P40,000 in a certain
fund at the end of 8 years. How much should he
invest in a fund that will pay 6% compounded
continuously?
A. P24,751.34
B. P28,864.36
C. P36,421.44
D. P30,468.42
284. If the effective annual interest rate is 4%,
compute the equivalent nominal annual interest
compounded continuously.
C. 7%
D. 8%
296. If money is worth 8% compounded
quarterly, compute the
single payment amount factor for a period of 6
years.
A. 1.60844
B. 1.70241
C. 0.62172
D. 0.53162
297. A sum of P1,000 is invested now and left for
8 years, at which time the principal is withdrawn.
The interest has an accrued left for another 8
years. If the effective annual interest is 5%, what
will be the withdrawn amount at the end of the
16th year?
A. P507.42
B. P750.42
C. P705.42
D. P425.07
For problems 298 - 300:
Compute the interest for an amount of P200,000
for a period of 8 years.
298. If it was made at a simple interest rate of
16% .
B. 12.40%
C. 11.26%
D. 11.55%
288. Compute the difference in the future
amount of P500 compounded annually at nominal
rate of 5% and if it is compounded continuously
for 5 years at the same rate.
A. P3.87
B. P5.48
C. P4.21
D. P6.25
289. If the effective rate is 24%, what nominal
rate of interest is charged for a continuously
compounded loan?
A. 21.51%
B. 23.25%
C. 22.35%
D. 21.90%
290. What is the nominal rate of interest
compounded
A. 8%
A. P274,000
B. 5%
B. P256,000
D. 7%
C. P265,000
D. 6%
295. If the single payment present worth factor
for a period of 8 years is equal to 0.58201,
compute the nearest value of the rate of interest
for that period.
A. 6%
B. 5%
D. P247,000
299. If it was made at 16% compounded bimonthly.
A. P507,267.28
B. P407,283.01
C. P507,365.96
D. P459,923.44
300. If it was made at 16% compounded
continuously.
A. P422,462.64
B. P524,242.46
C. P507,233.24
D. P519,327.95