Engineering Economics 2023

1. First Benchmark Publishing’s gross margin is 50% of sales.
The operating costs of the publishing are estimated at 15%

of sales. If the company is within the 40% tax bracket, determine the percent of sales is their profit after taxes?
2. A farmer selling eggs at 50 pesos a dozen gains 20%. If he sells the eggs at the same price after the costs of the eggs
rises by 12.5%, how much will be his new gain in percent?
3. A feasibility study shows that a fixed capital investment of P10,000,000 is required for a proposed construction firm
and an estimated working capital of P2,000,000. Annual depreciation is estimated to be10% of the fixed capital
investment. Determine the rate of return on the total investment if the annual profit is P3,500,000.
4. The monthly demand for ice cans being manufactured by Mr. Camus is 3200 pieces. With a manual operated
guillotine, the unit cutting cost is P25.00. An electrically operated hydraulic guillotine was offered to Mr. Camus at a
price of P275,000.00 and which cuts by 30% the unit cutting cost. Disregarding the cost of money, how many months will
Mr. Camus be able to recover the cost of the machine if he decides to buy now?
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 actual rate of interest?
6. A loan of P5,000 is made for a period of 15 months, at a simple interest rate of 15%, what future amount is due at the
end of the loan period?
7. Mr. Bacani borrowed money from the bank. He received from the bank P1,842 and promised to repay P2,000 at the
end of 10 months. Determine the rate of simple interest.
8. A college freshman borrowed P2,000 from a bank for his tuition fee and promised to pay the amount for one year. He
received only the amount of P1,920 after the bank collected the advance interest of P80.00. What was the rate of
discount?
9. It is the practice of almost all banks in the Philippines that when they grant a loan, the interest for one year is
automatically deducted from the principal amount upon release of money to a borrower. Let us therefore assume that
you applied for a loan with a bank and the P80,000 was approved at an interest rate of 14% of which P11,200 was
deducted and you were given a check of P68,800. Since you have to pay the amount of P80,000 one year after, what
then will be the effective interest rate?
10. A man invested P110,000 for 31 days. The net interest after deducting 20% withholding tax is P890.36. Find the rate
of return annually.
11. A investor wishes to earn 7% on his capital after payment of taxes. If the income from an available investment will be
taxed at an average rate of 42%, what minimum rate of return, before payment of taxes, must the investment offer to
be justified?
12. Mr. Jun Ramos was granted a loan of P20,000 by his employer Excel First Review and Training Center, Inc. with an
interest of 6% for 180 days on the principal collected in advance. The corporation would accept a promissory note for
P20,000 non-interest for 180 days. If discounted at once, find the proceeds of the note.
13. Miss Evilla borrowed money from a bank. She receives from the bank P1,340.00 and promised to pay P1,500.00 at
the end of 9 months. Determine the corresponding discount rate or often referred to as the “banker’s discount”.
14. The exact simple interest of P5,000 invested from June 21, 1995 to December 25, 1995 is P100. What is the rate of
interest?
15. What is the ordinary interest on P1,500.50 for 182 days at 5.2%?
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?
17. What is the effective rate corresponding to 18% compounded daily? Take 1 year is equal to 360 days.
18. What rate of interest compounded annually is the same as the rate of interest of 8% compounded quarterly?
19. Which of these gives the lowest effective rate of interest?
20. An amount of P1,000 becomes P1,608.44 after 4 years compounded bimonthly. Find the nominal interest.
21. How long will it take money to double itself if invested at 5% compounded annually?
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?
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?
24. Mandarin Bank advertises 9.5% account that yields 9.84% annually. Find how often the interest is compounded.
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%.
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?
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%.
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?
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?
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?
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 %?
32. What annuity is required over 12 years to equate with a future amount of P 20,000? Assume i= 6% annually.
33. A factory operator bought a diesel generator set for P 10,000.00 and agreed to pay the dealer uniform sum at the
end of each year for 5 years at 8% interest compounded annually, that the final payment will cancel the debt for
principal and interest. What is the annual payment?
34. What is the present worth of a year annuity paying P 3,000.00 at the end of each year, with interest at 8%
compounded annually?
35. 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.
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?
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?
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?
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?
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.
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?
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?
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.
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
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%.
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.
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 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
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?
49. A telephone switchboard 100 pair cable can be made up with either enameled wire or tinned wire. There will be 400
soldered connections. The cost of soldering a connection on the enameled wire will be P 1.65 on the tinned wire, it will
be P 1.15. A 100- pair cable made up with enameled wire cost P 0.55 per linear foot and those made up of tinned wire
cost P 0.75 per linear foot. Determine the length of cable run in feet so that the cost of each installation would be the
same.
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?
51. What is defines as the analysis and evaluation of the monetary consequences by using the theories and principles of
economics to engineering applications, designs and projects?
52. What is considered as the standard unit which forms the basis of a country’s domestic money supply?
53. What is defined as any tangible economic product that contributes directly or indirectly to the satisfaction of human
want?
54. What is defined as any tangible economic activity that contributes directly or indirectly to the satisfaction of human
want?
55. What are the two classifications of goods and services?
56. What refers to the goods and services that are required to support human life, needs and activities?
57. What refers to the goods and services that are desired by human and will be acquired only after all the needs have
been satisfied?
58. What refers to the exchange mechanism that brings together the sellers and the buyers of a product, factor of
production or financial security?
59. What is considered as the basic consuming or demanding unit of a commodity?
60. What is defined as an entity which makes product, good or services available to buyer or consumer in exchange of
monetary consideration?
61. What is a market situation whereby there is only one buyer of an item for which there is no goods substitute?
62. What market situation exists where there are few sellers and few buyers?
63. What market situation exists where there is only one buyer and only one seller?
64. What is the market situation exist when there are many buyers and many sellers?
65. If there is only one seller and many buyers, the market situation is ________ .
66. If there are many sellers and few buyers, the market situation is _________ .
67. Oligopoly exists when there is/are:
68. Duopsony is a market situation where there is/are:
69. Duopoly is a market situation where there is/are:
70. What is another term for “perfect competition”?
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?
72. Aside from many sellers and many buyers, which one is a characteristic of perfect competition?
73. What is the opposite of perfect competition?
74. Perfect monopoly exists only if:
75. A ______ is a market situation where economies of scale are so significant that cost are only minimized when the
entire output of an industry is supplied by a single producer so that the supply costs are lower under monopoly that
under perfect competition.
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:
77. What refers to the need, want or desire for a product backed by the money to purchase it?
78. What refers to the amount of a product made available for sale?
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:
80. What do you call any particular raw material or primary product such as cloth, wool, flour, coffee, etc.?
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?
82. Under ordinary simple interest, how many days in one year?
83. One banker’s year is equivalent to ______ days.
84. What refers to the cumulative effect of elapsed time on the money value of an event, based on the earning power of
equivalent invested funds capital should or will earn?
85. The difference between the present and future worth of money at some time in the future is called ______.
86. What refers to the present worth of the probable future net earnings?
87. What refers to the amount of money paid for the use of borrowed capital?
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?
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?
90. What refers to the cost of borrowing money or the amount earned by a unit principal per unit time?
91. A uniform series of payment occurring at equal interval of time is called ______.
92. What is the term for an annuity with a fixed time span?
93. What is the type of annuity where the payments are made at the end of each period starting from the first period?
94. What is the type of annuity where the payments are made at the beginning of the each period starting from the first
period?
95. What is the type of annuity that does not have a fixed time span but continues indefinitely or forever?
96. What is the type of annuity where the first payment does not begin until some later date in the cash flow?
97. Which is NOT an essential element of an ordinary 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?
99. What refers to the present worth of all the amount the bondholder will receive through his possession of the bond?
100. What is defined as the certificate of indebtedness of corporation usually for a period not less than 10 years and
guaranteed by a mortgage on certain assets of a corporation?
101. What refers to a document that shows proof of legal ownership of a financial security?
102. What type of bond is issued jointly by two or more corporations?
103. What type of bond whose guaranty is in lien on railroad equipment, such as freight and passenger cars,
locomotives, etc.?
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 ______.
105. What bond whose security is a mortgage on certain specified assets of the corporation?
106. A bond without any security behind them except a promise to pay by the issuing corporation is called ______.
107. A type of bond where the corporation pledges securities which it owns such as the stock or bonds of one of its
subsidiaries.
108. What type of bond where the corporation’s owner name are recorded and the interest is paid periodically to the
owners with their asking for it?
109. What type of bond which can be redeemed before maturity date?
110. What is the feature of some bonds whereby the issuer can redeem it before it matures?
111. The price at which the callable bond will be redeemed from the bondholder is called ______.
112. What is defined as the reduction or fall of the value of an asset due to constant use and passage of time?
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?
114. In what method of computing depreciation where it assumes that a sinking fund is established in which funds will
accumulate for replacement purposes?
115. In what method of computing depreciation where it assumes that the annual cost of depreciation is a fixed
percentage of the book value at the beginning of the year?
116. In SYD method of computing depreciation, which of the following is the formula in finding the sum of years’ digits?
117. The declining balance method is also known as ______.
118. What type of depreciation is due to the reduction in the demand for the function that the equipment or asset was
designed to render?
119. What type of depreciation is due to the reduction of the physical ability of an equipment or asset to produce
results?
120. The functional depreciation is sometimes called ______.
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?
122. What are the common methods of computing depletion charge?
123. Under the depletion allowance method in computing depreciation, the depletion charge is equal to either ______
whichever is smaller.
124. The depletion allowance method of computing depletion is commonly known as ______.
125. What is another term for “unit method” for computing depletion?
126. Using factor method, the depletion at any given year is equal to:
127. What do you call the after-tax present worth of all depreciation effects over the depreciation period of the asset?
128. A mathematical expression also known as the present value of annuity of one is called ______.
129. The amount of property in which a willing buyer to a willing seller for the property when neither one is under the
compulsion to buy nor to sell is called ______.
130. Salvage value is sometimes known as ______.
131. What refers to the value of an asset which a disinterested third party, different from the buyer and seller, will
determine in order to establish a price acceptable to both parties?
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?
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 ______.
134. In computing depreciation of an equipment, which of the following represents the first cost?
135. The process of determining the value or worth of a physical property for specific reason is called ______.
136. The unrecovered depreciation which results due to poor estimates as to the life of the equipment is called ______.
137. What refers to the present worth of cost associated with an asset for an infinite period of time?
138. Capitalized cost of a project is also known as ______.
139. What is normally used to compare alternatives that accomplish the same purpose but have unequal lives?
140. What method is often used in municipal project evaluations where benefits and costs accrue to different segments
of the community?
141. What refers to an imaginary cost representing what will not be received if a particular strategy is rejected?
142. What is the main reason why the sinking fund method of computing depreciation is seldom used in the industry?
143. What is the factor name of the formula (1+i)^-n?
144. What is the factor name of the formula [i(1+i)^n]/[((1+i)^n)-1]?
145. A form of business organization in which a person conducts his business alone and entirely for his own profit, being
solely responsible for all its activities and liabilities.
146. Is an artificial being created by operation of law, having the right of succession and the process, attributes and
properties expressly authorized by the law or incident to its existence.
147. What is the simplest form of business organization?
148. Double taxation is a disadvantage of which business organization?
149. In case of bankruptcy of a partnership,
150. Which is true about partnership?
151. Which is true about corporation?
152. Aggregation of individuals formed for the purpose of conducting a business and recognized by law as a fictitious
person is called ______.
153. An association of two or more persons for the purpose of engaging into a business for profit is called ______.
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?
155. What stock represents ownership and enjoys certain preferences than ordinary stock?
156. The amount of company’s profit that the board of directors of the corporation decides to distribute to ordinary
shareholders is called ______.
157. What refers to the residual value of a company’s assets after all outside liabilities (shareholders excluded) have
been allowed for?
158. What refers to the claim of anyone to ownership?
159. Cash money and credit necessary to establish and operate an enterprise are generally called ______.
160. What represents the share of participation in business organizations?
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 ______.
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.
163. Which of the following is an example of intangible asset?
164. Lands, buildings, plants and machineries are example of what type of 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?
166. What is another term for “current assets”?
167. What is an accounting term that represents an inventory account adjustment?
168. What is the change in cost per unit variable change called?
169. What is used to record historical financial transactions?
170. What is a secondary book of accounts, the information of which is obtained from the journal is called?
171. The original record of a business transaction is recorded in this book.
172. All the proceeds which are received by the business as a result of the sale of goods is called ______.
173. All are classified under direct labor expenses EXCEPT one. Which one?
174. What is a measure of the average speed with which accounts receivable are collected?
175. The ratio of the net income before taxes to net sales is called ______.
176. What do you call a one-time credit against taxes?
177. What is used when a quick estimate of the doubling time for the invested money is needed?
178. What is the increase in the money value of a capital asset is called?
179. What is the reduction in the money value of capital asset is called?
180. What refers to the negotiable claim issued by a bank in lien of a term 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.
182. The deliberate lowering of the price of a nation’s currency in terms of the accepted standard (Gold, American dollar
or the British pound) is known as ______.
183. What refers to the saving which takes place because goods are not available for consumption rather than consumer
really want to save?
184. The flow back of profit plus depreciation form a given project is called ______.
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 ______.
186. Capitalized cost of any structure or property is computed by which formula?
187. The true value of interest rate computed by equations for compound interest for a 1 year period is known as
______.
188. Return on investment ratio is the ratio of the:
189. Gross margin is the ratio of the gross profit to ______.
190. What is another term for “acid-test ratio”?
191. What is a government bond which has an indefinite life rather than a specific maturity?
192. A form of business firm which is owned and run by a group of individuals for their mutual benefit is called ______.
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?
194. The ability to meet debts as they become due is known as ______.
195. The ability to convert assets to cash quickly is known as ______.
196. What is the basic accounting equation?
198. What is an index of short-term paying ability?
199. The common ratio is the ratio of:
200. What is defined as the current assets minus inventories and prepaid expenses?
201. What is the ratio of the quick assets to current liabilities?
202. What is a measure of the average speed with which accounts receivable are collected?
203. Receivable turnover is the ratio of:
204. What is the ratio of the net income to owner’s equity?
205. What is the ratio of the market price per share to earnings per share called?
206. What is the profit margin ratio?
207. What is a gross margin?

208. Which of the following is a book value share of common stock?
209. What is an inventory turnover?
210. The average age of receivables is computed using which formula?
211. What is a method of determining when the value of one alternative becomes equal to the value of another?
212. The days supply of inventory on hand is calculated using which formula?
213. What is defined as the length of time usually in years, for cumulative net annual profit to equal the initial
investment?
214. What is defined as ratio of its return to its cost?
215. Which of the following is an accelerated depreciation method?
216. What is an accelerated depreciation method?
217. What refers to the reduction in the level of a national income and output usually accompanied by a fall in the
general price level?
218. A formal organization of producers within an industry forming a perfect collusion purposely formed to increase
profit and block new comers form the industry is called ______.
219. The paper currency issued by the central bank which forms part of the country’s money supply is called ______.
220. “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”.
221. What is the ratio of the market price per share to the earnings per share?
222. What is the ratio of the net income to owner’s equity?
223. What refers to the ration of the net income before taxes to net sales?
224. What refers to the buying or selling of goods between two or more markers in order to take profitable advantage of
any differences in the prices quoted in these markets?
225. The suspension of repayment of debt or interest for a specified period of time is called ______.
226. The discount of one unit of principal for one unit of time.
227. An annuity whereby the payment is postponed for a certain period of time is?
228. The actual interest earned by a given principal is known as?
229. A bond where the security behind it are the equipment of the issuing corporation.
230. Characterized by a few supplies of a product/services that the action by one will almost inevitably result in the
similar action by the other.
231. It is the worth of a property as shown on the accounting records.
232. The decrease in the value of a property due to gradual extraction of its contents.
233. It is usually determined by a disinterested third party to establish a price good enough to both the seller and the
buyer.
234. The exclusive right of a company to provide a specific product or services in a given region of the country.
235. It is the sum of the first cost and the present worth of all costs or replacement, operation and maintenance.
236. A certificate of indebtedness of a corporation usually for a period not less than 10 years and guaranteed by a
mortgage on certain assets of the corporation or its subsidiaries.
237. What the property is worth to the owner as an operating unit.
238. Occurs when a commodity or service is supplied by a number of vendors and there is nothing to prevent additional
vendors entering the market.
239. In making economy studies a minimum required profit on the invested capital is included as a cost. A method called
as __________.
240. Annuity is required over 10 years to equate to a future amount of P 15, 000 with i=5%
241. A debt of P 1000 is to be paid off in 5 equal yearly payments, each combining an amortization installment and
interest at 4% on the previously unpaid balance of the debt. What should be the amount of each payment?
242. P 1000 is deposited in a bank at 7% interest. What is the value of the money after 25 years, assuming that nothing
was deposited after the initial deposit?
243. What is the interest due on a P 1500 note for 4 years and 3 month, if it bears 12% ordinary simple interest?
244. A P 1000-bond which will mature in 10 years and with a bond rate of 10% payable annually is to be redeemed at P
1040 at the end of this period. If it is sold now at P 1,120. Determine the yield at this price.
245. A company sets aside P 300,000 each year as a fund for expansion. If the fund earns 9% compounded annually,
determine how long will it take before a building costing P 3, 000, 000 can be built?
247. An amortization of a debt is in a form of a gradient series of P5,000 on the first year, P4,500 on the second year,
P4,000 on the third year, P3,500 on the fourth year. What is the equivalent uniform periodic payment if interest is 5%?
248. 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.
249. Which of the following depreciation methods cannot have a salvage value of zero?
250. 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.
251. A price tag of P1200 is specified if paid within 60 days but offers a 3% discount for cash in 30 days. Find the rate of
interest.
252. It is the practice of almost all bank in the Philippines that when they grant a loan, the interest for 1 year is
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
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 “Banker’s Discount”.
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?
255. Karen was granted a loan of P20,000 by her employer CPM Industrial Fabricator and Construction Corporation with
an interest at 6% for 180days on the principal collected in advance. The corporation would accept a promissory note for
P20,000 non-interest for 180days. If discounted at once, find the proceeds in the note.
256. P4000 is borrowed for 75 days at 16% per annum simple interest. How much will be due at the end of 75 days?
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?
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?
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?
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?
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.
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.
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?
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.
265. A man is required to pay P200 at the end of 160 days or P190 at the end of 40 days. Determine the rate of interest.
266. Compute the discount if P2000 is discounted for 6 months at 8% simple interest.
267. The amount of P12800 in 4years at 5% compounded quarterly is _____.

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.
269. A nominal interest of 3% compounded continuously is given on the account. What is the accumulated amount of
P10,000 after 10 years?
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 the girl receive the money of the fund is invested at 8% compounded quarterly?
271. A man expects to receive P25,000 in 8 years. How much is that worth now considering interest at 8% compounded
quarterly?
272. P500,000 was deposited at an interest of 6% compounded quarterly. Compute the compound interest after 4 years
and 9 months.
273. If the nominal interest rate is 3%, how much is P5000 worth in 10 years in a continuously compounded account?
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?
275. How many years will P100,000 earn a compound interest of P50,000 if the interest rate is 9% compounded
quarterly?
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?
For Problems 277-279:
When compounded Bi-monthly, P15000 becomes P22,318.30 after 5years.
277. What is the nominal rate of interest?
278. What is the equivalent rate if it is compounded quarterly?
279. What is the effective rate if it is compounded quarterly?
280. How will it take a money to double itself if invested at 5% compounded annually?
281. Compute the effective annual interest rate which is equivalent to 5% nominal annual interest compounded
continuously.
282. Find the time required for a sum of money to triple itself at 5% per annum compounded continuously.
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?
284. If the effective annual interest rate is 4%, compute the equivalent nominal annual interest compounded
continuously.
285. What is the nominal rate of interest compounded continuously for 10 years if the compound amount factor is equal
to 1.34986?
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.
287. If the nominal interest is 12% compounded continuously, compute the effective annual rate if interest.
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.
289. If the effective rate is 24%, what nominal rate of interest is charged for a continuously compounded loan?
290. What is the nominal rate of interest compounded continuously for 8 years if the present worth factor is equal to
0.6187835?
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)
292. Find the discount if P2,000 is discounted for 6 months at 8% compounded quarterly.
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.
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?
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.
296. If money is worth 8% compounded quarterly, compute the single payment amount factor for a period of 6 years.
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?
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% .
299. If it was made at 16% compounded bi-monthly.
300. If it was made at 16% compounded continuously.
301. Find the value of x, (F/P, x, 6) if F/P compounded quarterly is equal to 1.612226.
302. Find the value of y, (P/F, 6%, y) if P/F compounded bi-monthly is equal to 0.787566.
303. Find the rate of interest if compound amount factor compounded bi-monthly for 5 years is equal to 1.487887.
304. Compute the nominal rate for a period of 6 years for an effective rate of 8.33% if it is compounded continuously.
305. Compute the equivalent compound amount factor if it is compounded continuously.
306. Compute the equivalent present worth factor if it is compounded continuously.

307. A man loan P2000 from the bank. How long would it take in years for the amount of the loan and interest to equal
P3280 if it was made at 8% simple interest.
308. A man loan P2000 from the bank. How long would it take in years if it was made at 8% compounded quarterly.
309. A man loan P2000 from the bank. How long would it take in years if it was made at 8% compounded continuously.
310. An amount of P1000 becomes P1608.44 after 4 years compounded bi-monthly. Find the nominal rate of interest,
the effective rate of interest, and the equivalent rate of interest if it is compounded quarterly.
311. How long would it take your money to double itself if it is invested at 6% simple interest, compounded semi-
quarterly, and compounded continuously?
For problems 312 – 314:
An amount of P50,000 was invested for 3 years.
312. Compute its interest at the end of 3 years if it is invested at 10% simple interest.
313. Compute for its compound interest if it is invested at 10% compounded annually.
314. Compute its interest if it is invested at 10% compounded continuously.
For Problems 315 – 317:
P200,000 was deposited for a period of 4 yrs. And 6 months and bears on interest of P85,659.25.
315. What is the nominal rate of interest if it is compounded quarterly?
316. What is the actual rate of interest?
317. What is the equivalent nominal rate if it is compounded semi-quarterly?
318. What is the value of (F/P, 8%, 6) if it is compounded semi-quarterly.
319. What is the value of (P/F, 6%, 4) if it is compounded bi-monthly.
320. What is the single payment compound amount factor for 8% compounded bi-monthly for 5 years.
If money is invested at a nominal rate of interest of 8% for a period of 4 years.
321.) What is the effective rate if it is compounded continuously?
322.) What is the value of the compound amount factor if it is compounded continuously?
323. What is the value of the present worth factor if it is compounded continuously?
324. If the single payment amount factor for a period of 5 years is 1.33822, what is the nominal rate of interest?
325. What is the effective rate of interest if it is compounded semi-annually of problem no. 324?
326. What is the equivalent nominal rate if it is compounded quarterly of problem no. 324?
327. Money was invested at x% compounded quarterly. If it takes money to quadruple in 17.5 years, find the value of x.
328.) What is the actual interest rate of problem no. 327?
329.) What is the equivalent rate if problem no. 327 is compounded daily?
For Problems 330 – 332:
A businessman loaned P500,000 from a local bank that charges an interest rate of 12%.
330. How much is he going to pay at the end of 5 years if it was made at 12% simple interest?
331. How much is he going to pay at the end of 5 years if it was made at 12% compound semi-quarterly?
332. How much is he going to pay at the end of 5 years if it was made at 12% compound continuously?
333. P60,000 was deposited at 6% compounded quarterly, tax free for 9 years and 3 months. How much interest was
earned at the end of the period?
334. P100,000 was placed in a time deposit which earned 9% compounded quarterly tax free. After how many years
would it be able to earn a total interest of P50,000?
335. P200,000 was placed in a time deposit at x% compounded quarterly and was free of taxes. After exactly 5 years, the
total interest earned was P120,000. What is the value of x?
337. It takes 20.15 years to quadruple your money if it is invested at x% compounded semi-annually. Find the value of x.
338. It takes 13.87 years to treble the money at the rate of x% compounded quarterly. Compute the value of x.
339. Money was invested at x% compounded quarterly. If it takes the money into quadruple in 17.5 years, find the value
of x.
340. Fifteen years ago P1,000.00 was deposited in a bank account, and today it is worth P2.370.00. The bank pays
interest semi-annually. What was the interest rate paid on this account?
a bank at a rate of 18% per year. Compare how much money you will save or lose on the transaction.
342. Find the present worth of a future payment of P1000,000 to be made in 10 years with an interest of 12%
compounded quarterly.
343. An initial savings deposit of P80,000 in a certain bank earns 6% interest per annum compounded monthly. If the
earnings from the deposit are subject to a 20% tax, what would the net value of the deposit be after three quarters?
344. The effective rate of interest of 14% compounded semi-annually is:
345. The amount of P50,000 was deposited in a bank earning an interest of 7.5% per annum. Determine the total
amount at the end of 5 years, if the principal and interest were not withdrawn during the period.
347. If P1,000 becomes P1,126.49 after 4 years when invested at a certain nominal rate of interest compounded semi-
annually, determine the nominal rate and the corresponding effective rate.
348. Convert 12% semi-annually to compounded quarterly.
349. What is the corresponding effective interest rate of 18% compounded semi-quarterly?
350.) If P5000 shall accumulate for 10 years at 8% compounded quarterly, find the compounded interest at the end of
10 years.
351. A couple borrowed P4,000 from a lending company for 6 years at 12%. At the end of 6 years, it renews the loan for
the amount due plus P4,000 more for 3 years at 12%. What is the lump sum due?
352. How long (in years) will it take the money to quadruple if it earns 7% compounded semi-annually?
353. P200,000 was deposited on Jan. 1,1988 at an interest rate of 24% compounded semi-annually. How much would
the sum be on Jan. 1, 1993?
354. If P500,000 is deposited at a rate of 11.25% compounded monthly, determine the compounded interest after 7
years and 9 months.
355. P200,000 was deposited at an interest rate of 24% compounded semi-annually. After how many years will the sum
be P621,170?
356. A bank is advertising 9.5% accounts that yields 9.84% annually. How often is the interest compounded?
357. A marketing company established a program to replace the cars of its sales representatives at the end of every 5
years. If the present price of the approved type of car is P520,000.00 with a resale value at the end of 5 years of 60% its
present value, how much money must the company accumulate for 5 years if inflation annually is 10%. Release value will
also appreciate at 10% yearly.
358. In year zero, you invest P10,000.00 in a 15% security for 5 years. During that time, the average annual inflation is
6%. How much, in terms of year zero will be in the account at maturity?
359. A machine has been purchased and installed at a total cost of P18,000.00. The machine will be retired at the end of
5 years, at which time it is expected to have a scrap value of P2,000.00 based on current prices. The machine will then
be replaced with an exact duplicate. The company plans to establish a reserve fund to accumulate the capital needed to
replace the machine. If an average annual rate of inflation of 3% is anticipated, how much capital must be accumulated?
360. If the inflation rate is 6%, cost of money is 10%, what interest rate will take care of inflation and the cost of money?
361. A man bought a government bond which cost P1000 and will pay P50 interest each year for 20 years. The bond will
mature at the end of 20 years and he will receive the original P1000. If there is 2% annual inflation during this period,
what rate of return will the investor receive after considering the effect of inflation?
362.) The inflated present worth of P2000 in two years is equal to P1471.07. What is the rate of inflation if the interest
rate is equal to 10%?
363. 12% rate of interest can take care of the cost of money and inflation. If the nominal rate of interest is 6%, what is
the rate of inflation?
364. An engineer bought an equipment for P500,000. Other expenses including installations amounted to P30,000. At
the end of its estimated useful life of 10 years, the salvage value will be 10% of the first cost. Using straight line method
of depreciation, what is the book value after 5 years?
365. A small machine costing P80,000 has a salvage value of x at the end of its life of 5 years. The book value at the end
of the 4th year is P22,400. What is the value of x using the straight line method depreciation?
366. A machine has a salvage value of P12,000 at the end of its useful life of 6 years. The book value at the end of 5 years
is P30,833.33. Using a straight line method of depreciation, what is the first cost of the machine?
367. A manufacturing plant was built at a cost of P5M and is estimated to have a life of 20 years with a salvage value of
P1M. A certain equipment worth P570,000 was installed at a cost of P80,000 is expected to operate economically for 15
years with a salvage value of P50,000. Determine the book value of the plant and equipment after 10 years, use straight
line depreciation method.
368. A printing equipment costs P73,500 has a life expectancy of 8 years and has a salvage value of P3,500 at the end of
its life. The book value at the end of x years is equal to P38,500. Using straight line method of depreciation, solve for the
value of x.
369. The cost of the printing equipment is P500,000 and the cost of handling and installation is P30,000. If the book
value of the equipment at the end of the 3rd year is P242,000 and the life of the equipment is assumed to be 5 years,
determine the salvage value of this equipment at the end of 5 years.
370. An engineer bought an equipment for P500,000. He spent an additional amount of P30,000 for installation and
other expenses. The salvage value is 10% of the first cost. If the book value at the end of 5 years will be P291,500 using
straight line method of depreciation, compute the useful life of the equipment in years.
371. The cost of equipment is P500,000 and the cost of installation is P30,000. If the salvage value is 10% of the cost of
equipment at the end of 5 years, determine the book value at the end of the fourth year. Use straight line method.
The first cost of a machine is P1,800,000 with a salvage value of P300,000 at the end of its life of 5 years. Determine the
total depreciation after 3 years.
372. Using Straight Line Method
373. Using Sum of Years Digit Method
374. Using Constant Percentage Method
375. An asset is purchased for P9,000.00. Its estimated economic life is 10 years after which it will be sold for P1,000.00.
Find the depreciation in the first three years using straight line method.
376. The purchase of a motor for P6000 and a generator for P4000 will allow the company to produce its own energy.
The configuration can be assembled for P500. The service will operate for 1600 hours per year for 10 years. The
maintenance cost is P300 per year, and cost to operate is P0.85 per hour for fuel and related cost. Using straight line
depreciation, what is the annual cost for the operation? There is a P400 salvage value for the system at the end of 10
year.
377. A machine has an initial cost of P50,00.00 and a salvage value of P10,000.00 after 10 years. What is the straight line
method depreciation rate as a percentage of the initial cost?
378. A machine has an initial cost of P50,00.00 and a salvage value of P10,000.00 after 10 years. What is the book value
after 5 years using straight line method depreciation rate?
379. A machine has a first of P80,000 and a salvage of P2,000 at the end of its life of 10 years. Find the book value at the
end of the 6th year using straight line method of depreciation.
380. An asset is purchased for P90,000.00. Its estimated life is 10 years after which it will be sold for P1,000.00. Find the
book value during the first year if Sum of the Years Digits(SYD) depreciation is used.
381. A telephone company purchased a microwave radio equipment for P6M. Freight and installation charges amounted
to 3% of the purchased price. If the equipment shall be depreciated over a period of 8 years with a salvage value of 5%,
determine the depreciation charge during the 5th year using the Sum of Year Digit Method.
382. A consortium of international communications companies contracted for the purchase and installation of a fiber
optic cable linking two major Asian cities at a total cost of P960M. This amount includes freight and installation charges
at 10% of the above total contract price. If the cable depreciated over a period of 15 years with zero salvage value, what
is the depreciation charge during the 8th year using the sum of year digits method?
383. 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 4 years using sum years digit method.
384. A certain equipment costs P7,000 has an economic life of n years and a salvage value P350 at the end of n years. If
the book value at the end of 4 years is equal to P2197.22, compute for the economic life of the equipment using the sum
of years digit method.
385. A company purchased an asset for P10000 and plans to keep it for 20 years. If the salvage value is zero at the end of
the 20th year, what is the depreciation in the third year? Use sum of years digit method.
386. An equipment costs P7000 and has a life of 8 years and salvage value of x after 8 years. If the book value of the
equipment at the 4th year is equal to P2197.22, compute the salvage value x using the sum of years digit method.
387. ABC Corporation makes it policy that for every new equipment purchased, the annual depreciation should not
exceed 20% of the first cost at any time without salvage value. Determine the length of service if the depreciation used
is the SYD Method.
388. A machine having a certain first cost has a life of 10 years and a salvage value of 6.633% of the first cost at the end
of 10 years. If it has a book value of P58,914 at the end of the 6thyear, how much is the first cost of the machine if the
constant percentage of declining value is used in the computation for its depreciation. (Matheson’s Method)
389. A machine costing P720,000 is estimated to have a life of 10 years. If the annual rate of depreciation is 25%,
determine the total depreciation using a constant percentage of the declining balance method.
390. An earth moving equipment that cost P90,000 will have an estimated salvage value of P18,000 at the end of 8
years. Using double-declining balance method, compute the book value and the total depreciation at the end of the 5th
year.
A. P21,357.42 ; P68,642.58
B. P24,362.48 ; P65,637.52
C. P15,830.34 ; P74,169.66
D. P19,442.78 ; P70,557.22
View Answer:
391. A certain office equipment has a first cost of P20,000 and has a salvage value of P1,000 at the end of 10 years.
Determine the depreciation at the end of the 6th year using Sinking fund method at 3% interest.
A. P10,720
B. P11,680
C. P12,420
D. P9,840
View Answer:
392. An equipment which cost 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 the calculation of depreciation?
A. Straight Line
B. Declining Balance
C. Sinking Fund
D. Sum of Years Digit

View Answer:
393. An equipment costs P8,000 has an economic life of 8 years and salvage value of P400 at the end of 8 years. The first
year depreciation amounts to P1,688.89. What method is used in the calculation of the depreciation?
A. Straight Line
C. Sinking Fund
View Answer:
394. The original cost of a certain machine is P150,000 and has an economic life of 8 years with a salvage value of P9,000
at that time. If the depreciation of the first year is equal to P44,475, what method is used in the calculation of the
depreciation?
A. Straight Line
C. Sinking Fund
View Answer:
395. A machine has a first cost of P140,000 and a life of 8 years with a salvage value of P10,000 at the end of its useful
life. If the depreciation at the first year amounts to P35,000, what method is used in the calculation of depreciation?
A. Double Declining Balance
B. Straight Line
C. Declining Balance
View Answer:
396. A hydraulic machine cost P180,000 and has a salvage value of P15,000 at the end of its useful life which is 12 years.
If the depreciation at the first year is P9,780.71, what method is used in computing the depreciation. Assume money is
worth 6% annually.
A. Straight Line
C. Sinking Fund
View Answer:
397. An equipment costs P480,000 and has a salvage value of 10% of its cost at the end of its economic life of 35,000
operating hours. In the first year, it was used for 4,000 hours. Determine its book value at the end of the first year.
A. P430,629.00
B. P418,360.00
C. P380,420.00
D. P376,420.00
View Answer:
operating hours in a period of 5 years. In the first year of service, it was used for 12,000 hours. If at the end of the 2nd
year it was used for 15,000 hours, find the depreciation at the second year.
A. P180,000
B. P190,000
C. P160,000
D. P150,000
View Answer:
399. A certain machine cost P40,000 and has a life of 4 years and a salvage value of P5000. The production output of this
machine in units per year is 1000 units for the first year, 2000 units for the second year, 3000 units for the third year,
and 4000 units for the fourth year. If the units produced are in uniform quality, what is the depreciation charge at the
end of the fourth year.
A. P14,000
B. P15,000
C. P13,000
D. P16,000
View Answer:
400. A lathe machine costs P300,000 brand new with a salvage value of x pesos. The machine is expected to last for
28500 hours in a period of 5 years. In the first year of service it was used for 8000 hours. If the book value at the end of
the first year is P220,000, compute for the salvage value x in pesos.
A. P15,000
B. P12,000
C. P18,000
D. P20,000
401. It is defined to be the capacity of a commodity to satisfy human want
A. Necessity
B. Utility
C. Luxuries
D. Discount
View Answer:
402. It is the stock that has prior to dividends. It usually does not bring voting right to the owners and the dividend is
fixed and cannot be higher than the specified amount.
A. Common stock
B. Voting stock
C. Pretend stock
D. Non par value stock
View Answer:
403. 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
View Answer:
404. ____ is the loss of value of the equipment with use over a period of time. It could mean a difference in value
between a new asset and the use asset currently in a service.
A. Loss
B. Depreciation
C. Extracted
D. Gain
View Answer:
405. An economic condition in which there are so few suppliers of a particular product that one supplier’s actions
significantly affect prices and supply.
A. Oligopoly
B. Monopsony
C. Monopoly
D. Perfect competition
View Answer:
406. A market whereby there is only one buyer of an item for when there are no goods substitute.
A. Monopsony
B. Monopoly
C. Oligopoly
D. Oligopsony
View Answer:
407. It is the worth of a property as recorded in the book of an enterprise.
A. Salvage value
B. Price
C. Book value
D. Scrap value
View Answer:
408. Reduction in the level of nation income and output usually accompanied by a fall in the general price level.
A. Devaluation
B. Deflation
C. Inflation
D. Depreciation
View Answer:
409. A formal organization of producers within industry forming a perfect collusion purposely formed to increase profit
and block new comers from the industry.
A. Cartel
B. Monopoly
C. Corporation
D. Competitors
View Answer:
410. A market situation where there is only one seller with many buyer.
A. Monopoly
B. Monophony
C. Oligopoly
View Answer:
411. A market situation where there is one seller and buyer.
A. Bilateral monopoly
B. Monopoly
C. Oligopoly
D. Bilateral Monopoly
View Answer:
412. Reduction in the level of national income and output usually accompanied by a fall in the general price level.
A. Deflation
B. Inflation
C. Devaluation
D. Depreciation
View Answer:
413. A series of equal payments made at equal interval of time.
A. Annuity
B. Amortization
C. Depreciation
D. Bonds
View Answer:
414. The money paid for the use of borrowed capital.
A. Interest
B. Amortization
C. Annuity
D. Bonds
View Answer:
415. The place where buyers and sellers come together.
A. Maker
B. Store
C. Bargain center
D. Port
View Answer:
416. The value of the stock as stated on the stocks certificate
A. Stock value
B. Par value
C. Interest
D. Maturity value
View Answer:
417. A market situation in which two competing buyers exert controlling influence over many sellers.
A. Bilateral monopoly
B. Oligopoly
C. Duopsony
D. Duopoly
View Answer:
418. A market situation in which two powerful groups or organizations dominate commerce in one business market or
commodity.
A. Oligopoly
B. Duopoly
C. Duopsony
D. duopoly
View Answer:
419. The type of annuity where the first payment is made after several periods, after the beginning of the payment.
A. Perpetuity
B. Ordinary annuity
C. Annuity due
D. Deferred annuity
View Answer:
420. The condition in which the total income equals the total operating expenses.
A. Tally
B. Par value
C. Check and balance
D. Break even
View Answer:
421. The amount which has been spent or capital invested which for some reasons cannot be retrieved.
A. Sunk cost
B. Fixed costs
C. Depletion cost
D. Construction cost
View Answer:
422. An obligation with no condition attach is called
A. Personal
B. Gratuitous
C. Concealed
D. Private
View Answer:
423. The sum of all the costs necessary to prepare a construction project for operation.
A. Operation costs
B. Construction cost
C. Depletion cost
D. Production cost
View Answer:
424. The amount received from the sale of an addition unit of a product.
A. Marginal cost
B. Marginal revenue
C. Extra profit
D. Prime cost
View Answer:
425. The amount that the property would give if sold for junk.
A. Junk value
B. Salvage value
C. Scrap value
D. Book value
View Answer:
426. The worth of the property which is equal to the original cost less the amount which has been charged to
depreciation.
A. Scrap value
B. Salvage value
C. Book value
D. Market value
View Answer:
427. The sum of the direct labor cost incurred in the factory and the direct material cost of all materials that go into
production is called
A. Net cost
B. Maintenance cost
C. Prime cost
D. Operating cost
View Answer:
428. The difference between the present value and the worth of money at some time in the future is called
A. Market value
B. Net value
C. Discount
D. Interest
View Answer:
429. The addition cost of producing one more unit is
A. Prime cost
B. Marginal cost
C. Differential cost
D. Sunk cost
View Answer:
430. A written contract by a debtor to pay final redemption value on an indicated date or maturity date and pay a
certain sum periodically.
A. Annuity
B. Bond
C. Amortization
D. Collateral
View Answer:
431. Estimated value of the property at the useful life.
A. Market value
B. Fair value
C. Salvage value
D. Book value
View Answer:
432. Determination of the actual quantity of the materials on hand as of a given date.
A. Physical inventory
B. Counting principle
C. Stock assessment
D. Periodic material update
View Answer:
433. This consists of a cash and account receivable during the next period or any other material which will be sold.
A. Fixed assets
B. Deferred charges
C. Current asset
D. Liability
View Answer:
434. A wrong act that causes injury to a person or property and for which allows a claim by the injured party to recover
damages.
A. Fraud
B. Tort
C. Libel
D. Scam
View Answer:
435. A series of uniform payment over an infinite period of time
A. Depletion
B. Capitalized cost
C. Perpetuity
D. Inflation
View Answer:
436. These are products or services that are required to support human life and activities that will be purchased in
somewhat the same quantity event though the price varies considerably.
A. Commodities
B. Necessities
C. Demands
D. Luxury
View Answer:
437. The quantity of a certain commodity that is offered for sale at a certain price at a given place and time.
A. Utility
B. Supply
C. Stocks
D. Goods
View Answer:
438. It is sometimes called the second hand value
A. Scrap value
B. Salvage value
C. Book value
D. Par value
View Answer:
439. Decreases in the value of a physical property due to the passage of time.
A. Deflation
B. Depletion
C. Declination
D. Depreciation
View Answer:
440. An association of two or more individuals for the purpose of engaging business for profit.
A. Single proprietorship
B. Party
C. Corporation
D. Partnership
View Answer:
441. The simplest form of business organization where in the business is own entirely by one person.
A. Partnership
B. Proprietorship
C. Corporation
D. Joint venture
View Answer:
442. Parties whose consent or signature in a contract is not considered intelligent.
A. Dummy person
B. Minors
C. Demented persons
D. Convict
View Answer:
443. It is defined as the capacity of a commodity to satisfy human want.
A. Satisfaction
B. Luxury
C. Necessity
D. Utility
View Answer:
444. This occurs in a situation where a commodity or service is supplied by a number of vendors and there is nothing to
prevent additional vendors entering the market.
A. Perfect competition
B. Monophony
C. Monopoly
D. Cartel
View Answer:
445. These are products or services that are desired by human and will be purchased if money is available after the
required necessities have been obtained.
A. Commodities
B. Necessities
C. Luxuries
D. Supplies
View Answer:
446. Grand total of the assets and operational capability of a corporation.
A. Authorized capital
B. Paid off capital
C. Subscribed capital
D. Investment
View Answer:
447. It is where the original record of a business transaction is recorded.
A. Ledger
B. Spreadsheet
C. Journal
D. Logbook
View Answer:
448. The length of time which the property may be operated at a profit.
A. Life span
B. Economic life
C. Operating life
D. Profitable life
View Answer:
449. The right and privilege granted to an individual or corporation to do business in a certain region.
A. Permit
B. Royalty
C. License
D. Franchise
View Answer:
450. The worth of an asset as shown in the accounting records of an enterprise.

A. Fair value
B. Par value
C. Market value
D. Book value
451. A bookstore purchased a best-selling book at P200.00 per copy. At what price should this book be sold so that by
giving a 20% discount, the profit is 30%.
A. P200.00
B. P300.00
C. P400.00
D. P500.00
View Answer:
452. A businessman wishes to earn 7% on his capital after payment of taxes. If the income from an available investment
will be taxed at an average of 42%, what minimum rate of return, before payment of taxes, must the investment offer to
be justified?
A. 13.02%
B. 12.07%
C. 10.89%
D. 11.08%
View Answer:
A. 1 hour
B. 1 hour and 10 minutes
C. 1 hour and 15 minutes
D. 1 hour and 30 minutes
View Answer:
454. Froyd Corporation’s gross margin is 45% of sales. Operating expenses such as sales and administration are 15% of
sales. Froyd Corporation is in 40% tax bracket. What percent of sales is their profit after taxes?
A. 21%
B. 20%
C. 19%
D. 18%
View Answer:
455. In determining the cost involved in fabricating sub-assembly B within a company, the following data have been
gathered:
Direct material – P0.30 per unit
Direct labor – P0.50 per unit
Testing set-up – P300.00 per set-up
It is decided to subcontract the manufacturing of assembly B to an outside company. For an order of 100 units, what is
the cost per unit that is acceptable to the company?
A. P3.80
B. P4.00
C. P4.10
D. P4.20
View Answer:
456. By selling balut at P5 per dozen, a vendor gains 20%. The cost of the eggs rises by 12.5%. If he sells at the same
price as before, find his new gain in %.
A. 6.89%
B. 6.67%
C. 6.58%
D. 6.12%
View Answer:
457. An equipment installation job in the completion stage can be completed in 50 days of 8 hour/day work, with 50
men working. With the contract expiring in 40 days, the mechanical engineer contractor decided to add 15 men on the
job, overtime not being permitted.
If the liquidated damages is P5,000 per day of delay, and the men are paid P150 per day, how much money would he
save with the additional workers?
A. P43,450
B. P43,750
C. P44,250
D. P44,750
View Answer:
458. In a certain department store, the monthly salary of a saleslady is partly constant and partly varies as the value of
her sales for the month. When the value of her sales for the month is P10,000.00, her salary for the month is P900.00.
When her monthly sales go up to P12,000.00, her monthly salary goes up to P1,000.00. What must be the value of her
sales so that her salary for the month will be P2,000.00?
A. P30,000
B. P31,000
C. P32,000
D. P33,000
View Answer:
459. Jojo bought a second-hand Betamax VCR and then sold it to Rudy at a profit of 40%. Rudy then sold the VCR to Noel
at a profit of 20%. If Noel paid P2,856 more than it costs Jojo, how much did Jojo pay for the unit?
A. P4,100
B. P3,900
C. P4,000
D. P4,200
View Answer:
460. The selling price of a TV set is double that of its net cost. If the TV set is sold to a customer at a profit of 25% of the
net cost, how much discount was given to the customer?
A. 37.5%
B. 37.9%
C. 38.2%
D. 38.5%
View Answer:
461. A Mechanical Engineer who was awarded a P450,000 contract to install the machineries of an oil mill failed to finish
the work on time. As provided for in the contract, he has to pay a daily penalty equivalent to one fourth of one per cent
per day for the first 10 days and 0.5% per day for the next 10 days and one per cent per day for everyday thereafter. If
the total penalty was P60,750.00, how many days was the completion of the contract delayed?
A. 26 days
B. 27 days
C. 28 days
D. 29 days
View Answer:
462. The quarrying cost of marble and granite blocks plus delivery cost to the processing plant each is P2,400.00 per
cubic meter. Processing cost of marble into tile is P200.00 per square meter and that of the granite into tiles also is
P600.00 per square meter.
If marble has a net yield of 40 square meters of tile per cubic meter of block and sells P400 per square meter, and
granite gives a net yield of 50 square meters of tiles per cubic meter of block and sells at P1000 per square meter.
Considering all other costs to be the same, the granite is more profitable than the marble by how much?
A. P12,000 per cubic meter
B. P13,000 per cubic meter
C. P14,000 per cubic meter
D. P15,000 per cubic meter
View Answer:
463. A man would like to invest P50,000 in government bonds and stocks that will give an overall annual return of about
5%. The money to be invested in government bonds will give an annual return of 4.5% and the stocks of about 6%. The
investments are in units of P100.00 each. If he desires to keep his stock investment to minimum in order to reduce his
risk, determine how many stocks should be purchased.
A. 165
B. 166
C. 167
D. 168
View Answer:
464. A 220 V 2 hp motor has an efficiency of 80%. If power costs P3.00 per kw-hr for the first 50 kw-hr, 2.90 per kw-hr
for the second 50 kw-hr, P2.80 for the third kw-hr and so on until a minimum of P2.50 per kw-hr is reached. How much
does it cost to run this motor continuously for 7 days?
A. P800
B. P820
C. P840
D. P860
View Answer:
465. An 8-meter concrete road pavement 500 meters long is desired to be constructed over a well-compacted gravel
road, together with the necessary concrete curbs and gutters on both sides. In order to put the subgrade on an even
level grade, a 500 cubic meters of sand filling is necessary, over which the 10 inch concrete pavement will be placed?
Assume the following data:
A. Sand fill, including rolling and watering = P100 per cubic meter
B. Concrete pavement, 10 in thick (labor and materials) including curing = P220 per sq. Meter
C. Curbs and gutters = P12 per linear meter
How much will the project cost allowing 15% for contingency?
A. P1,207,000
B. P1,207,500
C. P1,208,000
D. P1,208,500
View Answer:
466. An electric utility purchases 2,300,000 kw-hr per month of electric energy from National Power Corporation at
P2.00 per kw-hr and sells all this to consumers after deducting distribution losses of 20%. At what average rate per kw-hr
should this energy be sold to break even if the following are other monthly expenses in its operation:
Taxes 2.5 % of gross revenue
Salaries P750,000
Depreciation P2,250,000
InterestP700,000
Maintenance P300,000
Miscellaneous P200,000
A. P4.90
B. P5.20
C. P5.90
D. P6.30
View Answer:
467. An engineer bidding on the asphalting of 7 km stretch of road is confronted with a problem of choosing between
two possible sites on which to set-up the asphalt-mixing machine.
Site A Site B
Average hauling distance 2.5 km 2.75 km
Monthly rental P35,000 P6,500
Installing and dismantling of machine P20,000 P10,000
At Site A, it would be necessary to hire 2 flagmen at P150 per working day. The job can be completed in 32 weeks
working 6 days a week. The project requires 16,670 cubic meter of asphalt mix per kilometre of road. If the asphalt mix
is to be hauled by a contractor at P42 per cubic meter per km of haul. How much is site B more expensive than site A?
468. A fixed capital investment of P10,000,000 is required for a proposed manufacturing plant and an estimated working
capital of P2,000,000. Annual depreciation is estimated to be 10% of the fixed capital investment. Determine the rate of
return on the total investment if the annual profit is P2,500,000.
469. A call to bid was advertised in the Philippine Daily Inquirer for the construction of a transmission line from a mini-
hydroelectric power plant to the substation which is 5.035 kilometers away. The tanalised timber electrical posts must
be placed at an interval of 50 m. The electrical posts must be 30 feet long, 8 inches in diameter at the tip and 12 inches
in diameter at the butt. The power house is 15 m from the first electric post and the substation is 20 m from the last
electric post. Compute the estimated cost for the project using the following data:
Cost of one tanalised timber post 30 feet long is P5,000 including delivery to the site. Labourer at P180 per day and 5
laborers can dig and erect 3 posts per day. Electrician at P250 per day and 4 electricians can strung wires complete 150
meters per day. Electric wire cost P4.00 per meter. Use only 5 laborers and 4 electricians for the project and is
supervised by a foreman which is paid at P400 per day. Contingency is 10% and profit is 25%.
470. Upon the retirement after 44 years in government service, Mrs. Salud Araoarao was able to get a retirement lump
sum of P2,300,000. As a hedge against inflation, she decided to use a part of it invested in real state at Pagadian City and
the remainder were invested as follows:
If her annual earnings from the T-bills, money market and stock is P50,000, How much did she invests in real estate?
471. The monthly demand for ice cans being manufactured by Mr. Alarde is 3200 pieces. With a manual operated
guillotine, the unit cuffing cost is P25.00. An electrically operated hydraulic guillotine was offered to Mr. Alarde at a price
of P275,000.00 and which cuts by 30% the unit cuffing cost. Disregarding the cost of money, how many months will Mr.
Alarde be able to recover the cost of the machine if he decides to buy now?
472. In a new gold mining area in Southern Leyte the ore contains on the average of ten ounces of gold per ton.
Different methods of processing are tabulated as follows:
Processing Method Cost per ton % Recovery
A P5,500 90
B P2,500 80
C P400 70
If gold can be sold at P4,000 per ounce, which method of processing yield the biggest return?
473. JRT Motors Inc. has been shipping its Suzuki engines in containers to avoid the necessary crating of the engines. JRT
Motors Inc. will pay freight on container load of 40 tons, regardless of whether or not the container is completely filled
with engines. Record shows that due to engine size, JRT Motors Inc. has shipped only 30 tons per container. Freight of
container cost P3.00 per kilograms.
If the engines are crated so that they can be shipped at the rate of P3.50 per hundred kilograms with the freight bill
computed only on the actual weight shipped. The cost of crating would be P50 per engine and would increase the
shipping weight from 1500 kg to 1520 kg per engine. How much more economical shipping the engine in crates than in
containers?
474. A paint manufacturing company uses a sand mill for fine grinding of paint with an output of 100 liters per hour
using glass beads as grinding media. Media load in the mill is 25 kg costing P200.00 per kg and is fully replenished in 2
months time at 8 hours per day operation, 25 days a month. A ceramic grinding media is offered to this paint company,
costing P400 per kg and needs 30 kg load in the sand mill, but guarantees an output of 120 liters per hour and full
replenishment of media in 3 months. If profit on paint reduction is P15 per liter how much is a difference in profit
between the two media?
475. If P1000 accumulates to P1500 when invested at a simple interest for three years, what is the rate of interest?
476. You loan 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, you have to pay the full amount
of P100,000, what is the actual rate of interest?
477. A loan of P5,000 is made for a period of 15 months, at a simple interest rate of 15%, what future amount is due at
the end of the loan period?
478. If you borrowed money from your friend with simple interest at 12%, find the present worth of P50,000, which is
due at the end of 7 months.
479. Mr. J. Reyes borrowed money from the bank. He received from the bank P1,842 and promised to repay P2,000 at
the end of 10 months. Determine the rate of simple interest.
480. If you borrowed P10,000 from a bank with 18% interest per annum, what is the total amount to be repaid at the
end of one year?
481. A price tag of P1,200 is payable in 60 days but if paid within 30 days it will have a 3% discount. Find the rate of
interest.
482. A man borrowed P2,000 from a bank and promised to pay the amount for one year. He received only the amount of
P1,920 after the bank collected an advance interest of P80.00. What was the rate of discount?
483. A man borrowed P2,000 from a bank and promised to pay the amount for one year. He received only the amount of
P1,920 after the bank collected an advance interest of P80.00. What was the rate of interest that the bank collected in
advance?
484. What will be the future worth of money after 12 months if the sum of P25,000 is invested today at simple interest
rate of 1% per year?
485. What will be the future worth of money after 12 months if the sum of P25,000 is invested today at simple interest
rate of 1% per month?
486. 480 It is the practice of almost all banks in the Philippines that when they grant a loan, the interest for one year is
you applied for a loan with a bank and the P80,000 was approved at an interest rate of 14% of which P11,200 was
487. A deposit of P110,000 was made for 31 days. The net interest after deducting 20% withholding tax is P890.36. Find
488. P5,000 is borrowed for 75 days at 16% per annum simple interest. How much will be due at the end of 75 days?
489. A businessman wishes to earn 7% on his capital after payment of taxes. If the income from an available investment
will be taxed at an average rate of 42%, what minimum rate of return, before payment of taxes, must the investment
offer to be justified?
490. A man borrowed P20,000 from a local commercial bank which has a simple interest of 16% but the interest is to be
deducted from the loan at the time that the money was borrowed and the loan is payable at the end of one year. How
much is the actual rate of interest?
492. Agnes Abanilla was granted a loan of P20,000 by her employer CPM Industrial Fabricator and Construction
Corporation with an interest rate of 6% for 180 days on the principal collected in advance. The corporation would accept
a promissory note for P20,000 non-interest for 180 days. If discounted at once, find the proceeds of the note.
493. If you borrow money from your friend with simple interest of 12%, find the present worth of P20,000 which is due
at the end of nine months.
494. A man borrowed from a bank under a promissory note that he signed in the amount of P25,000.00 for a period of
one year. He receives only the amount of P21,915.00 after the bank collected the advance interest and an additional of
P85.00 for notarial and inspection fees. What was the rate of interest that the bank collected in advance?
495. Mr. Danilo Conde borrowed money from a bank. He received from the bank P1,340.00 and promised to pay
P1,500.00 at the end of 9 months. Determine rate of simple interest.
496. Mr. J. Dela Cruz borrowed money from a bank. He receives from the bank P1,340.00 and promised to pay P1,500.00
at the end of 9 months. Determine the corresponding discount rate or often referred to as the “banker’s discount.”
497. Annie buys a television set from a merchant who ask P1,250.00 at the end of 60 days. Annie wishes to pay
immediately and the merchant offers to compute the cash price on the assumption that money is worth 8% simple
interest. What is the cash price?
498. A man borrowed money from a loan shark. He receives from the loan shark and amount of P1,342.00 and promised
to repay P1,500.00 at the end of 3 quarters. What is the simple interest rate?
499. Determine the exact simple interest on P5,000 invested for the period from January 15,1996 to October 12,1996, if
the rate interest is 18%.
500. The exact simple interest of P5,000 invested from June 21,1995 to December 25,1995 is P100. What is the rate of
interest?
501. On her recent birthday, April 22, 2001, Nicole was given by her mother a certain sum of money as birthday present.
She decided to invest the said amount on 20% exact simple interest. If the account will mature on Christmas day at an
amount of P10,000.00, how much did Nicole receive from her mother on her birthday?
502. What is the ordinary interest on P1,500.50 for 182 days at 5.2%?
503. Nicole has P20,400 in cash. She invested it at 7% from March 1, 2006 to November 1, 2006 at 7% interest. How
much is the interest using the Banker’s Rule?
amount at the end of 7 years if the principal and interest were not withdrawn during this period?
505. 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?
506. The amount of P50,000 was deposited in the bank earning an interest of 7.5% per annum. Determine the total
507. Find the present worth of a future payment of P80,000 to be made in six years with an interest of 12%
compounded annually.
509. What nominal rate, compounded semi-annually, yields the same amount as 16% compounded quarterly?
510. What rate of interest compounded annually is the same as the rate of interest of 8% compounded quarterly?
511. Find the nominal rate, which if converted quarterly could be used instead of 12% compounded semi-annually.
512. Which of these gives the lowest effective rate of interest
A. 12.35% compounded annually

B. 11.90% compounded semi-annually
C. 12.20% compounded quarterly
D. 11.60% compounded monthly
513. Find the compound amount if P2,500 is invested at 8% compounded quarterly for 5 years and 6 months.
514. An amount of P1,000 becomes P1,608.44 after 4 years compounded bimonthly. Find the nominal interest.
515. If P5,000 shall accumulate for 10 years at 8% compounded quarterly, then what is the compound interest at the
end of 10 years?
516. What is the corresponding effective rate of 18% compounded semi-quarterly?
518. In how many years is required for P2,000 to increase by P3,000 if interest at 12% compounded semi-annually?
519. The amount of P150,000 was deposited in the bank earning an interest of 7.5% per annum. Determine the total
520. How long will it take money to double itself if invested at 5% compounded annually?
521. What is the corresponding effective interest rate of 18% compounded semi-monthly?
522. What is the effective rate of 14% compounded semi-annually?
523. At an interest rate of 10% compounded annually, how much will a deposit of P1,500 be in 15 years?
524. A man expects to receive P25,000 in 8 years. How much is that money worth now considering interest at 8%
compounded quarterly?
525. About how many years will P100,000 earn a compound interest of P50,000 if the interest rate is 9% compounded
quarterly?
526. Compute the equivalent rate of 6% compounded semi-annually to a rate compounded quarterly.
527. What is the amount of P12,800 in 4 years at 5% compounded quarterly?
to P50,000. When will the girl receive the money if the fund is invested at 8% compounded quarterly?
529. If P50,000 shall accumulate for 10 years at 4% compounded quarterly, find the compounded interest at the end of
10 years.
the end of the 16th year.
531. P1,500.00 was deposited in a bank account, 20 years ago. Today, it is worth P3,000.00. Interest is paid semi-
annually. Determine the interest rate paid on this account.
532. A merchant puts in his P2,000.00 to a small business for a period of six years. With a given interest rate on the
investment of 15% per year, compounded annually, how much will he collect at the end of the sixth year?
533. A man borrowed P100,000 at the interest rate of 12% per annum, compounded quarterly. What is the effective
rate?
535. When will an amount be tripled with an interest of 11.56%?
536. A student plans to deposit P1,500.00 in the bank now and another P3,000.00 for the next 2 years. If he plans to
withdraw P5,000.00 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%.
537. How much must be invested on January 1, 1998 in order to accumulate P2,000 on January 1, 2003? Money is worth
6%.
539. A mechanical engineer wishes to accumulate a total of P10,000 in a savings account at the end of 10 years. If the
bank pays only 4% compounded quarterly, what should be the initial deposit?
540. Funds are deposited in a savings account at an interest of 8% per annum. What is the initial amount that must be
deposited to yield a total of P10,000 in 10 years?
years and 9 months.
542. An interest rate is quoted as being 7.5% compounded quarterly. What is the effective annual interest rate?
a bank at a rate of 18% per year. How much lesser you will pay by borrowing the money from the bank?
544. A deposit of P1,000 is made in a bank account that pays 8% interest compounded annually. Approximately how
much money will be in the account after 10 years?
545. Fifteen years ago P1,000.00 was deposited in a bank account, and today it is worth P2,370.00. The bank pays
interest semi-annually. What was the interest rate paid in this account?
546. P200,000 was deposited on January 1, 1988 at an interest rate of 24% compounded semi-annually. How much
would the sum be on January 1, 1993?
547. What is the present worth of two P100 payments at the end of the third year and fourth year? The annual interest
rate is 8%.
548. Consider a deposit of P600.00 to be paid back in one year by P700.00. What is the rate of interest, i% per year
compounded annually such that the net present worth of the investment is positive? Assume i ≥ 0.
549. 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
550. A machine has been purchased and installed at a total cost of P18,000.00. The machine will retire at the end of 5
years, at which time it is expected to have a scrap value of P2,000.00 based on current prices. The machine will then be
replaced with an exact duplicate. The company plans to establish a reserve funds to accumulate the capital needed to
551. What is the effective rate corresponding to 16% compounding daily? Take 1 year = 360 days.
552. By the condition of a will, the sum of P25,000 is left to a girl to be held in a trust fund by her guardian until it
amounts to P45,000. When will the girl receive the money if the fund is invested at 8% compounded quarterly?
be P621,170?
6%. How much, in terms of year zero pesos will be in the account at maturity?
555. A company invests P10,000 today to be repaid in 5 years in one lump sum at 12% compounded annually. How much
profit in present day pesos is realized?
556. How long (in nearest years) will it take money to quadruple if it earns 7% compounded semi-annually?
557. How much should you put into a 10% savings account in order to have P10,000.00 in five years?
559. P500,000 was deposited 20.15 years ago at an interest rate of 7% compounded semi-annually. How much is the
sum now?
560. A bank pays one percent interest on savings accounts four times a year. What is the effective annual interest rate?
561. Alexander Michael owes P25,000.00 due in 1 year and P75,000 due in 4 years. He agrees to pay P50,000.00 today
and the balance in 2 years. How much must he pay at the end of two years if money is worth 5% compounded semi-
annually?
562. Find the difference between simple interest and compound interest on a savings deposit of P50,000 at 10% per
annum for 3 years.
563. If money is worth 5% compounded quarterly, find the equated time for paying a loan of P150,000 due in 1 year and
P280,000 due in 2 years.
564. For a loan acquired six years ago, a man paid out the amount of P75,000.00. The interest was computed at 18%
compounded annually. How much was the borrowed amount?
565. A couple decided that for every child that will be born to them they will place a deposit in the bank so that on the
child’s 18th birthday, the child will receive the amount of P300,000.00. If the bank will pay an interest of 18%
compounded yearly, how much deposit will the couple have to make on the birth of a child to them?
566. On his 6th birthday a boy is left an inheritance. The inheritance will be paid in a lump sum of P10,000 on his 21st
birthday. What is the present value of the inheritance as of the boy’s 6th birthday, if the interest is compounded
annually? Assume i = 4%.
567. A man who won P300,000 in a lottery decided to place 50% of his winning in a trust fund for the college education
of his son. If the money will earn 14% per year compounded quarterly, how much will the man have at the end of 10
years when his son will be starting his college education?
568. If the sum of P15,000 is deposited in an account earning 4% per annum compounded quarterly, what will be the
deposited amount at the end of 5 years?
569. The Philippine Society of Mechanical Engineers is planning to put up its own building. Two proposals being
considered are:
a. The construction of the building now to cost P400,000.
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 P200,000.
By how much is proposal B more economical than proposal A if interest rate is 20% and depreciation is to be neglected?
570. A credit plan charges interest rate of 36% compounded monthly. Find its effective rate.
571. A master card compounds monthly and charges an interest of 1.5% per month. What is the effective interest rate
per year?
572. A man expects to receive P20,000 in 10 years. If interest is computed at 6% compounded quarterly, how much is it
worth today?
573. Microsoft CEO, billionaire Bill Gates willed that a sum of $25 million be given to a child but will be held in trust by
the child’s mother until it amounts to $45 million. If the amount is invested and earns 8% compounded quarterly, when
will the child receive the money?
574. Find the present value of installment payments of P1,000 now, P2,000 at the end of the first year, P3,000 at the end
of the second year, P4,000 at the end of the third year and P5,000 at the end of the fourth year, if money is worth 10%
compounded annually.
575. How long will it take money to triple itself if invested at 8% compounded annually?
576. Two hundred years ago, your great, great, great grandfather deposited P1 in a savings account. Today, the bank
notified you that you are the sole heir to this account. How much is the account today if it earns 8% per annum?
577. What is the present worth of a future payment of P200,000 to be made in 10 years with an interest of 10%
578. A deposit of P1,000.00 is made in a bank account that pays 8% interest compounded annually. How much money
will be in the account after 10 years?
579. What nominal rate compounded annually would quadruple the principal in 4 years?
580. Five years ago, you paid P34,000 for a residential lot. Today you sell it at P50,000. What is your annual rate of
appreciation?
581. Suppose that P100,000 is invested at a certain rate of interest compounded annually for 2 years. If the accumulated
interest at the end of 2 years is P21,000. Find the rate of interest.
582. An investment of P20,000 will be required at the end of the year. The project would terminate at the end of the 5th
year and the assets are estimated to have a salvage value of P25,000 at that time. What is the rate of interest for this
project to break even?
583. Robin Padilla possesses a promissory note, due in 2 years hence, whose maturity value is P3,200. What is the
discount value of this note, based on an interest rate of 7%?
584. JM borrowed a certain amount on June 1990 from DJ. Two years later, JM borrowed again from DJ an amount of
P5,000. JM paid P1,000 on June 1993 and discharged his balance by paying P7,500 on June 1995. What was the amount
borrowed by JM on June 1990 if the interest is 8% compounded annually?
585. Dr. Gary Sy invests P50,000 in a time deposit that yields 10% for his retirement 30 years from now. If the inflation
rate is 5%, what will be the value of the account at maturity in terms of today’s peso.
586. First Benchmark Publisher Inc. invests P100,000 today to be repaid in five years in one lump sum at 12%
compounded annually. If the rate of inflation is 4% compounded annually, how much profit, in today’s pesos, is realized
over the five-year period?
587. A manufacturing firm contemplates retiring an existing machine at the end of 2002. The new machine to replace
the existing one will have an estimated cost of P400,000. This expense will be partially defrayed by the sale of the old
machine as scrap for P30,000. To accumulate the balance of the required capital, the firm will deposit the following sum
in an account earning interest at 5% compounded quarterly:
P60,000 at the end of 1999
What cash disbursement will be necessary at the end of 2002 to purchase the new machine?
588. On June 1, 1998, Ms. Brenda Marcial purchased stock of San Miguel Corporation at a total cost of P144,000. She
then received the following semiannual dividends:
P4,200 on December 1, 1998
P4,400 on June 1, 1999
P4,400 on December 1, 1999
P4,000 on June 1, 2000
After receiving the last dividend, Ms. Marcial sold her stock, receiving P152,000 after deduction of brokerage fees. What
semiannual rate did this dividend realize on her investment?
589. Engr. Narito has P13,760 in cash and he would like to invest it in business. His estimates of the year-by-year receipts
and disbursements for all purposes are shown in the tabulation below:
Year Receipts Disbursements

0 0 – P13,760
4 P5,000 + P1,000
5 P6,200 + P1,200
6 P7,500 + P1,500
7 P8,800 + P1,800
He estimates that his equipment will have a salvage value of P2,000 at the end of useful life. Find the rate of return of
the prospective equipment.
590. What interest rate, compounded monthly, is equivalent to a 10% effective rate?
591. Froyd Wess Network Inc. plans to purchase a piece of land and to build a school building on this land. However,
since the school building is not an immediate requirement, the institute is considering whether it should purchase this
land and build the building now or defer this action for 3 years. The current costs are as follows:
Land: P800,000 Building: P12,000,000
The purchase price of the land and the cost of the school building are expected to appreciate at the rate of 15% and 4%
per annum, respectively. What will be the total cost of the land and structure 3 years hence?
592.) Mr. Jimenez owes Mr. Padua the following amounts:
P40,000 due 2 years hence
Having won the lottery, Mr. Jimenez decided to liquidate the debts at the present time. If the two parties agree on a 5%
interest rate, what sum must Mr. Jimenez pay?
593. Mr. John Bongat working in the United States planned of returning to the Philippines at the end of 2001. He
established a fund starting in 1995 with the following recorded deposits and withdrawals.
January 1, 1995 Deposit of P40,000
January 1, 1997 Deposit of P80,000
July 1, 1997 Withdrawal of P12,000
July 1, 1998 Deposit of P64,000
January 1, 1999 Withdrawal of P48,000
His fund earned interest at the rate of 3.5% compounded semiannually until the end of 1997. At that date, the interest
was augmented to 4% compounded semiannually. What will be the principal in the fund at the end of 2001?
594. JRT Publishers is contemplating of installing a labor-saving printing equipment. It has a choice between two
different models. Model A will cost P1,460,000 while model B will cost P1,452,000. The anticipated repair costs for each
model are as follows:
Model A: P60,000 at the end of 5th year
P80,000 at the end of 10th year
Model B: P152,000 at the end of 9th year
The two models are alike in all other respects. If the publisher is earning a 7% return of its capital, which model should
be purchased? How much savings will be accrued if the publisher will purchase the more economical model?
595. What is the future amount of P50,000 if the single payment compound amount factor of this investment is 1.23%
596. An investment indicates a single compound amount factor of 1.32 if invested for “n” years. If the interest rate is
4.73% per annum, find the value of “n.”
597. Mr. Mondragon invests P50,000 today. Several years later, it becomes P60,000. What is the single payment present
worth factor of this investment? If the amount was invested for 5 years, what is the rate of interest?
598. Money is deposited in a certain account for which the interest is compounded continuously. If the balance doubles
in 6 years, what is the annual percentage rate?
599.) On January 1, 1999, Ms. Angel Locsin opened an account at Bank of Philippine Islands with an initial deposit of
P1,000,000.00. On March 1, 2000, she opened an additional P1,000,000.00. If the bank pays 12% interest compounded
monthly, how much will be in the account on April 1, 2000?
600. The paper currency issued by the Central Bank which forms part of the country’s money supply.
A. T-bills
B. Bank note
C. Check
D. Coupon
601. Reduction in the level of national income and output usually accompanied by the fall in the general price level.
A. Devaluation
B. Deflation
C. Inflation
D. Depreciation
View Answer:
602. It is a series of equal payments occurring at equal interval of time.
A. Annuity
B. Debt
C. Amortization
D. Deposit
View Answer:
603. The place where buyers and sellers come together.
A. Market
B. Business
C. Recreation center
D. Buy and sell section
View Answer:
604. A market whereby there is only one buyer of an item for which there are no goods substitute
A. Monopsony
B. Oligopoly
C. Monopoly
D. Oligopsony
View Answer:
605. It is a series of equal payments occurring at equal interval of time where the first payment is made after several
periods, after the beginning of the payment.
A. Perpetuity
B. Ordinary annuity
C. Annuity due
D. Deferred annuity
View Answer:
606. The total income equals the total operating cost.
A. Balanced sheet
B. In-place value
C. Check and balance

D. Break even – no gain no loss
View Answer:
607. Kind of obligation which has no condition attached.
A. Analytic
B. Pure
C. Gratuitous
D. Private
View Answer:
608. Direct labor costs incurred in the factory and direct material costs are the costs of all materials that go into
production. The sum of these two direct costs is known as:
A. GS and A expenses
B. Operating and maintenance costs
C. Prime cost
D. O and M costs
View Answer:
609. An index of short term paying ability is called:

A. Receivable turn-over
B. Profit margin ratio
C. Current ratio
D. Acid-test ratio
View Answer:
610. Artificial expenses that spread the purchase price of an asset or another property over a number of years.
A. Depreciation
B. Sinking fund
C. Amnesty
D. Bond
View Answer:
611. Estimated value at the end of the useful life.
A. Market value
B. Fair value
C. Salvage value
D. Book value
View Answer:
612. Consists of the actual counting or determination of the actual quantity of the materials on hand as of a given date.
B. Material update
C. Technological assessment
D. Material count
View Answer:
613. Additional information of prospective bidders on contract documents issued prior to bidding date.
A. Delict
B. Escalatory
C. Technological assessment
D. Bid bulletin
View Answer:
614. A series of uniform accounts over an infinite period of time.

A. Depreciation
B. Annuity
C. Perpetuity
D. Inflation
View Answer:
fourth year, if the annual interest rate is 10%?
A. P727.17
B. P717.17
C. P714.71
D. P731.17
View Answer:
616. Today, a businessman borrowed money to be paid in 10 equal payments for 10 quarters. If the interest rate is 10%
compounded quarterly and the quarterly payment is P2,000, how much did he borrow?
A. P17,304.78
B. P17,404.12
C. P17,504.13
D. P17,604.34
View Answer:
617. What annuity is required over 12 years to equate with a future amount of P20,000? Assume i = 6% annually.
A. P1,290.34
B. P1,185.54
C. P1,107.34
D. P1,205.74
View Answer:
618. Find the annual payment to extinguish a debt of P10,000 payable for 6 years at 12% interest annually.
A. P2,324.62
B. P2,234.26
C. P2,432.26
D. P2,342.26
View Answer:
619. A manufacturer desires to set aside a certain sum of money to provide funds to cover the yearly operating expenses
and the cost of replacing every year the dyes of a stamping machine used in making radio chassis as model changes for a
period of 10 years.
Operating cost per year = P500.00
Cost of dye = P1,200.00
Salvage value of dye = P600.00
The money will be deposited in a savings account which earns 6% interest. Determine the sum of money that must be
provided, including the cost of the initial dye.
A. P8,626.02
B. P8,662.02
C. P8,226.02
D. P8,666.22
View Answer:
620. A factory operator bought a diesel generator set for P10,000.00 and agreed to pay the dealer uniform sum at the
end of each year for 5 years at 8% interest compounded annually, that the final payment will cancel the debt for
principal and interest. What is the annual payment?
A. P2,500.57
B. P2,544.45
C. P2,540.56
D. P2,504.57
View Answer:
621. A man paid 10% down payment of P200,000 for a house and lot and agreed to pay the 90% balance on monthly
installment for 60 months at an interest rate of 15% compounded monthly. Compute the amount of the monthly
payment.
A. P42,821.86
B. P42,128.67
C. P42,218.57
D. P42,812.68
View Answer:
622. What is the present worth of a 3 year annuity paying P3,000.00 at the end of each year, with interest at 8%
A. P7,654.04
B. P7,731.29
C. P7,420.89
D. P7,590.12
View Answer:
623. What is the accumulated amount of five-year annuity paying P6,000 at the end of each year, with interest at 15%
A. P40,519.21
B. P40,681.29
C. P40,454.29
D. P40,329.10
View Answer:
624. A debt of P10,000 with 10% interest compounded semi-annually is to be amortized by semi-annual payment over
the next 5 years. The first due in 6 months. Determine the semi-annual payment.
A. P1,234.09
B. P1,255.90
C. P1,275.68
D. P1,295.05
View Answer:
625. A man borrowed P300,000 from a lending institution which will be paid after 10 years at an interest rate of 12%
compounded annually. If money is worth 8% per annum, how much should he deposit to a bank monthly in order to
discharge his debt 10 yrs. hence?
A. P5,174.23
B. P5,162.89
C. P5,190.12
D. P5,194.23
View Answer:
626. A man loans P187,400 from a bank with interest at 5% compounded annually. He agrees to pay his obligations by
A. P43,600.10
B. P43,489.47
C. P43,263.91
D. P43,763.20
View Answer:
627. Money borrowed today is to be paid in 6 equal payments at the end of 6 quarters. If the interest is 12%
compounded quarterly, how much was initially borrowed if quarterly payment is P2,000.00?
A. P10,834.38
B. P10,278.12
C. P10,450.00
D. P10,672.90
View Answer:
628. A person buys a piece of lot for P100,000 down payment and 10 deferred semi-annual payments of P8,000 each,
semi-annually?
A. P142,999.08
B. P143,104.89
C. P142,189.67
D. P143,999.08
View Answer:
629. How much must you invest today in order to withdraw P2,000 annually for 10 years if the interest rate is 9%?
A. P12,835.32
B. P12,992.22
C. P12,562.09
D. P12,004.59
View Answer:
630. How much must be deposited at 6% each year beginning on January 1, year 1, in order to accumulate P5,000 on the
date of the last deposit, January 1, year 6?
A. P728.99
B. P742.09
C. P716.81
D. P702.00
View Answer:
631. A piece of machinery can be bought for P10,000 cash or for P2,000 down and payments of P750 per year for 15
years. What is the annual interest rate for the time payments?
A. 4.61%
B. 4.71%
C. 4.41%
D. 4.51%
View Answer:
632. A company issued 50 bonds of P1,000.00 face value each, redeemable at par at the end of 15 years to accumulate
the funds required for redemption. The firm established a sinking fund consisting of annual deposits, the interest rate of
the fund being 4%. What was the principal in the fund at the end of the 12th year?
A. P38,120.00
B. P37,520.34
C. P37,250.34
D. P37,002.00
View Answer:
633. A house and lot can be acquired by a down payment of P500,000 and a yearly payment of P100,000 at the end of
each year for a period of 10 years, starting at the end of 5 years from the date of purchase. If money is worth 14%
compounded annually, what is the cash price of the property?
A. P806,899.33
B. P807,100.12
C. P807,778.12
D. P808,835.92
View Answer:
634. A parent on the day the child is born wishes to determine what lump sum would have to be paid into an account
bearing interest at 5% compounded annually, in order to withdraw P20,000 each on the child’s 18th, 19th, 20th and 21st
birthdays. How much is the lump sum amount?
A. P30,119.73
B. P30,941.73
C. P30,149.37
D. P30,419.73
View Answer:
635. An instructor plans to retire in exactly one year and want an account that will pay him P25,000 a year for the next
15 years. Assuming a 6% annual effective interest rate, what is the amount he would need to deposit now? (The fund
will be depleted after 15 years).
A. P242,860.22
B. P242,680.22
C. P242,608.22
D. P242,806.22
View Answer:
636. A manufacturing firm wishes to give each 80 employees a holiday bonus. How much is needed to invest monthly for
a year at 12% nominal interest rate compounded monthly, so that each employee will receive a P2,000 bonus?
A. P12,615.80
B. P12,516.80
C. P12,611.80
D. P12,510.80
View Answer:
637. A man purchased on monthly installment a P100,000 worth of land. The interest rate is 12% nominal and payable in
20 years. What is the monthly amortization?
A. P1,101.08
B. P1,202.08
C. P1,303.08
D. P1,404.08
View Answer:
638. A young engineer borrowed P10,000 at 12% interest and paid P2,000 per annum for the last 4 years. What does he
A. P6,999.39
B. P6,292.93
C. P6,222.39
D. P6,922.93
View Answer:
639. An investment of P350,000 is made today and is equivalent to payments of P200,000 each year for 3 years. What is
the annual rate of return on investment for the project?
A. 32.7%
B. 33.8%
C. 33.2%
D. 33.6%
View Answer:
640. Maintenance cost of an equipment is P200,000 for 2 years, P40,000 at the end of 4 years and P80,000 at the end of
8 years. Compute the semi-annual amount that will be set aside for this equipment. Money worth 10% compounded
annually.
A. P7,425.72
B. P7,329.67
C. P7,245.89
D. P7,178.89
View Answer:
641. Mr. Cruz plans to deposit for the education of his 5 years old son, P500 at the end of each month for 10 years at
12% annual interest compounded monthly. The amount that will be available in two years is:
A. P13,100.60
B. P13,589.50
C. P13,982.80
D. P13,486.70
View Answer:
642. A small machine has an initial cost of P20,000, a salvage value of P2,000 and a life of 10 years. If your cost of
operation per year is P3,500 and your revenues per year is P9,000, what is the approximate rate of return (ROR) on the
investment?
A. 24.2%
B. 24.8%
C. 25.1%
D. 25.4%
View Answer:
643. An employee is about to receive the sum of P300.00 at the end of each year for 5 years. One year prior to the
receipt of the first sum, he decides to discount all 5 sum. If the interest rate is 6%, what proceeds will he obtain?
A. P1,298.00
B. P1,231.09
C. P1,221.62
D. P1,263.71
View Answer:
644. The president of a growing engineering firm wishes to give each of 50 employees a holiday bonus. How much is
needed to invest monthly for a year at 12% nominal rate compounded monthly, so that each employee will receive a
P1,000.00 bonus?
A. P3,942.44
B. P3,271.22
C. P3,600.12
D. P3,080.32
View Answer:
645. Mr. Padilla plans a deposit of P500 at the end of each month for 10 years at 12% annual interest, compounded
monthly. What will be the amount that will be available in 2 years?
A. P13,941.44
B. P13,272.22
C. P13,486.73
D. P13,089.32
View Answer:
646. Mr. Ramirez borrowed P15,000 two years ago. The terms of the loan are 10% interest for 10 years with uniform
payments. He just made his second annual payment. How much principal does he still owe?
A. P13,841.34
B. P13,472.22
C. P13,286.63
D. P13,023.52
View Answer:
647. A man inherited a regular endowment of P100,000 every end of 3 months for 10 years. However, he may choose to
get a single lump sum payment at the end of 4 years. How much is this lump sum of the cost of money is 14%
A. P3,702,939.73
B. P3,607,562.16
C. P3,799,801.23
D. P3,676,590.12
View Answer:
648. A man paid 10% down payment of P200,000 for a house and lot and agreed to pay the balance on monthly
installments for “x” years at an interest rate of 15% compounded monthly. If the monthly installment was P42,821.87,
find the value of x?
A. 3
B. 4
C. 5
D. 6
View Answer:
649. You need P4,000 per year for four years to go to college. Your father invested P5,000 in 7% account for your
education when you were born. If you withdraw P4,000 at the end of your 17th, 18th, 19th and 20th birthday, how
much will be left in the account at the end of the 21st year?
A. P1,666.98
B. P1,699.86
C. P1,623.89
D. P1,645.67
View Answer:
650. Mr. Ayala 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 Mr. Ayala pay each month?
A. P839.19
B. P842.38
C. P807.16
D. P814.75
651. A machine is under consideration for investment. The cost of the machine is P25,000.00. Each year it operates, the
machine will generate a savings of P15,000.00. Given the effective annual interest rate of 18%, what is the discounted
payback period, in years, on the investment of the machine?
A. 3.15
B. 1.75
C. 2.15
D. 2.75
View Answer:
652. A machine costs P20,000.00 today and has an estimated scrap value of P2,000.00 after 8 years. Inflation is 2% per
year. The effective annual interest rate earned on money invested is 8%. How much money needs to be set aside each
year to replace the machine with an identical model 8 years from now?
A. P3,345.77
B. P3,389.32
C. P3,489.11
D. P3,573.99
View Answer:
653. Engr. Santos borrows P100,000.00 at 10% effective annual interest. He must pay back the loan over 30 years with
uniform monthly payment due on the first day of each month. What does Engr. Santos pay each month?
A. P838.86
B. P849.12
C. P850.12
D. P840.21
View Answer:
654. Instead of paying P100,000.00 in annual rent for office space at the beginning of each year for the next 10 years, an
engineering firm has decided to take out a 10-year P1,000,000.00 loan for a new building at 6% interest. The firm will
invest P100,000.00 of the rent saved and earn 18% annual interest on that amount. What will be the difference between
the firm’s annual revenue and expenses?
A. P10,200.12
B. P10,205.13
C. P10,210.67
D. P10,215.56
View Answer:
655. A service car whose cash price was P540,000 was bought with a down payment of P162,000 and monthly
installment of P10,874.29 for 5 years. What was the rate of interest if compounded 5monthly?
A. 20%
B. 24%
C. 21%
D. 23%
View Answer:
656. What uniform annual amount should be deposited each year in order to accumulate P100,000.00 at the end of the
5th annual deposit if money earns 10% interest?
A. P16,002.18
B. P15,890.12
C. P16,379.75
D. P15,980.12
View Answer:
657. In five years, P18,000 will be needed to pay for a building renovation. In order to generate this sum, a sinking fund
consisting of three annual payments is established now. For tax purposes, no further payment will be made after three
years. What payments are necessary if money worth 15% per annum?
A. P3,919.52
B. P3,871.23
C. P3,781.32
D. P3,199.52
View Answer:
658. Find the present value in pesos, of a perpetuity of P15,000 payable semi-annually if money is worth 8%
A. P371,719.52
B. P371,287.13
C. P371,670.34
D. P371,802.63
View Answer:
659. If P500.00 is invested at the end of each year for 6 years, at an annual interest rate of 7%, what is the total peso
amount available upon the deposit of the sixth payment?
A. P3,671.71
B. P3,712.87
C. P3,450.12
D. P3,576.64
View Answer:
660. How many years must you invest today in order to withdraw P1,000.00 per year for 10 years if the interest rate is
12%?
A. P5,467.12
B. P5,560.22
C. P5,650.22
D. P5,780.12
View Answer:
661. A man paid a 10% down payment of P200,000 for a house and lot and agreed to pay the balance on monthly
installments for 5 years at an interest rate of 15% compounded monthly. What was the monthly installment in pesos?
A. P42,821.87
B. P42,980.00
C. P43,102.23
D. P43,189.03
View Answer:
662. A man inherited a regular endowment of P100,000.00 every end of 3 months for x years. However, he may choose
to get a single lump sum of P3,702,939.80 at the end of 4 years. If the rate of interest was 14% compounded quarterly,
what is the value of x?
A. 10
B. 11
C. 12
D. 13
View Answer:
663. If you obtain a loan of P1M at the rate of 12% compounded annually in order to build a house, how much must you
pay monthly to amortize the loan within a period of 10 years?
A. P13,994.17
B. P14,801.12
C. P13,720.15
D. P14,078.78
View Answer:
664. Rej Averion borrowed P50,000.00 from Social Security System, in the form of calamity loan, with interest at 8%
compounded quarterly payable in equal quarterly installments for 10 years. Find the quarterly payments.
A. P1,590.83
B. P1.609.23
C. P1,778.17
D. P1,827.79
View Answer:
665. For having been loyal, trustworthy and efficient, the company has offered a supervisor a yearly gratuity pay of
P20,000.00 for 10 years with the first payment to be made one year after his retirement. The supervisor, instead,
requested that he be paid a lump sum on the date of his retirement less interact that the company would have earned if
the gratuity is to be paid on the yearly basis. If interest is 15%, what is the equivalently lump sum that he could get?
A. P100,357.37
B. P100,537.73
C. P100,375.37
D. P100,735.37
View Answer:
666. In anticipation of a much bigger volume of business after 10 years, a fabrication company purchased an adjacent lot
for its expansion program where it hopes to put up a building projected to cost P4,000,000.00 when it will be
constructed 10 years after, To provide the required capital expense, it plans to put up a sinking fund for the purpose.
How much must the company deposit each year if interest to be earned is computed at 15%?
A. P194,089.17
B. P195,780.12
C. P196,801.56
D. P197,008.25
View Answer:
667. A man purchased a car with a cash price of P350,000. He was able to negotiate with the seller to allow him to pay
only a down payment of 20% and the balance payable in equal 48 end of the month installment at 1.5% interest per
month. Once the day he paid the 20th installment, he decided to pay monthly payment. How much is his monthly
payment?
A. P8,929.29
B. P8,225.00
C. P8,552.00
D. P8,008.20
View Answer:
668. A man purchased a car with a cash price of P350,000. He was able to negotiate with the seller to allow him to pay
only a down payment of 20% and the balance payable in equal 48 end of the month installment at 1.5% interest per
month. Once the day he paid the 20th installment, he decided to pay monthly payment. What is the remaining balance
that he paid?
A. P186,927.24
B. P188,225.00
C. P187,701.26
D. P185,900.20
View Answer:
669. A company purchased for a cash price of P500,000.00 a machine which is estimated to have a salvage value of
P50,000.00 at the end of its 10 years economic life. How much yearly deposit must the company deposit in a sinking
fund that will pay 18% interest, compounded yearly, to accumulate the needed fund to purchase the new machine at
the end of the 10th year economic life of the machine it purchased if a new machine will cost 75% more by that time?
A. P34,859.78
B. P35,890.12
C. P35,074.58
D. P34,074.85
View Answer:
670. A car dealer advertises the sale of a car model for a cash price of P280,000. If purchased on installment, the regular
down payment is 15% and balance payable in 18 equal monthly installments at an interest rate of 1.5% per month. How
much will be required monthly payments?
A. P15,185.78
B. P15,289.12
C. P15,783.90
D. P15,632.11
View Answer:
671. A machinery supplier is offering a certain machinery on a 10% down payment and the balance payable in equal end
of the year payments without interest for 2 years. Under this arrangement, the price is pegged to be P250,000.
However, for cash purchase, the machine would only cost P195,000. What is the equivalent interest rate that is being
charged on the 2-year payment plan if interest is compounded quarterly?
A. 18.47%
B. 19.21%
C. 19.47%
D. 19.74%
View Answer:
672. A company has approved a car plan for its six senior officers in which the company will shoulder 25% of the cost
and the difference payable by each officer to a financing company in 48 equal end of the month installments at an
interest rate of 1.5% per month. If the cost of each car is P350,000, determine the amount each officer has to pay the
financing company per month?
A. P7,523.90
B. P7,619.22
C. P7,190.00
D. P7,710.94
View Answer:
673. If P10,000 is deposited each year for 9 years, how much annuity can a person get annually from the bank every year
for 8 years starting 1 year after the 9th deposit is made. Cost of money is 14%.
A. P34,467.21
B. P34,567.81
C. P34,675.18
D. P34,867.37
View Answer:
674. An employee is earning P12,000.00 a month and he can afford to purchase a car which will require a down payment
of P10,000.00 and a monthly amortization of not more than 30% of his monthly salary. What should be the maximum
cash value of a car he can purchase if the seller will agree to a down payment of P10,000.00 and the balance payable in
four years at 18% per year payable on monthly basis? The first payment will be due at the end of the first month?
A. P135,267.21
B. P135,507.42
C. P135,605.48
D. P135,807.30
View Answer:
675. A new company developed a program in which the employees will be allowed to purchase shares of stocks of the
company at the end of its fifth year of operation, when the company’s thought to have gained stability already. The
stock has a par value of P100.00 per share.
Believing in the good potential of the company, an employee decided to save in a bank the amount of P8,000.00 at the
end of every year which will earn for him 9% interest, compounded annually.
How much shares of stocks will he be able to purchase at the end of the fifth year of his yearly deposits?
A. 476
B. 478
C. 480
D. 482
View Answer:
676. Mr. Juan dela Cruz borrows P100,000 at 10% compounded annually, agreeing to repay the loan in twenty equal
annual payments. How much of the original principal is still unpaid after he has made the tenth payment?
A. P69,890.42
B. P72,000.80
C. P72,173.90
D. P72,311.44
View Answer:
677. A debt of P12,000 with an interest of 20% compounded quarterly is to be amortized by equal semi-annual
payments over the next three years, the first due in 6 months. How much is the semi-annual payments?
A. P2,775.50
B. P2,662.89
C. P2,590.04
D. P2,409.78
View Answer:
678. A fund donated by a benefactor to PICE to provide annual scholarships to deserving CE students. The fund will grant
P5,000 for each of the first five years, P8,000 for the next five years and P10,000 each year thereafter. The scholarship
will start one year after the fund is established. If the fund earns 8% interest, what is the amount of the donation?
A. P99,490.00
B. P99,507.35
C. P99,601.71
D. P99,723.54
View Answer:
679. If a low cost house and lot worth P87,000 were offered at 10% down payment and P500 per month for 25 years,
what is the effective monthly interest rate on the diminishing balance?
A. 0.492%
B. 4.92%
C. 0.0492%
D. 49.2%
View Answer:
680. The average annual cost of damages caused by floods at Dona Rosario Village located along Butuanon river is
estimated at P700,000. To build a gravity dam to protect the area from the floods, would cost P2,500,000 and would
involve an annual maintenance cost of P20,000. With interest at 8% compounded annually, how many years will it take
for the dam to pay for itself?
A. 4.0 years
B. 4.5 years
C. 5.0 years
D. 5.5 years
View Answer:
681. A businessman borrowed P10,000.00 from a bank at 12% interest, and paid P2,000.00 per annum for the first 4
years. What does he pay at the end of the fifth year in order to pay-off the loan?
A. P6,812.54
B. P6,782.31
C. P6,917.72
D. P6,660.90
View Answer:
682. Engr. Rodel Narito agreed to pay the loan he is borrowing from a development bank in six annual end-of-the-year
payments of P71,477.70. Interest is 18% per annum compounded annually and is included in the yearly amount he will
be paying the bank. How much money Engr. Narito is borrowing from the bank?
A. P250,000
B. P260,000
C. P270,000
D. P280,000
View Answer:
683. Rona wishes to purchase a 29-inch flat-screened colored TV at Bodega Appliance Center an amount of P20,000.00.
She made a down payment of P5,000.00 and the balance payable in 24 equal monthly installments. If financing charge is
12% for each year computed on the total balance to be paid by installment and interest rate 12%, how much would
Rona pay every month for the colored TV? What will be the actual cost of the money?
A. 36.71%
B. 36.21%
C. 35.89%
D. 35.23%
View Answer:
684. Engr. Bacolongan of Main Engineering decided to purchase a machine which is to be used for their refrigeration and
air-conditioning works at an amount of P1,200,000. The useful life of the machine is estimated to be 5 years with a
salvage value of P80,000 as based on current prices. The average annual rate of inflation during the next 5 years will be
7%. The machine will be replaced with a duplicate and the firm will accumulate the necessary capital by making equal
end-of-year deposits in a reserve fund that earns 6% per annum. Determine the annual deposit.
A. P277,189.56
B. P278,664.54
C. P279,180.00
D. P280,673.12
View Answer:
685. Engr. Bacolongan of Main Engineering decided to purchase a machine which is to be used for their refrigeration and
air-conditioning works at an amount of P1,200,000. The useful life of the machine is estimated to be 5 years with a
salvage value of P80,000 as based on current prices. The average annual rate of inflation during the next 5 years will be
7%. The machine will be replaced with a duplicate and the firm will accumulate the necessary capital by making equal
end-of-year deposits in a reserve fund. If money is worth 6% per annum, determine the annual deposit.
A. P367,890.12
B. P366,062.33
C. P365,089.34
D. P364,890.43
View Answer:
686. Because of the peso devaluation, a car costing P150,000 is to be purchased through a finance company instead of
paying cash. If the buyer is required to pay P40,000 as down payment and P4,000 each month for 4 years, what is the
effective interest rate on the diminishing balance?
A. 35.28%
B. 35.82%
C. 34.89%
D. 34.29%
View Answer:
687. Engr. Edwin Astorga plans to purchase a new office building costing P1,000,000. He can raise the building by issuing
10%, 20-year bond that would pay P150,000 interest per year and repay the face amount at maturity. Instead of buying
the new building, he can least it for P140,000 per year, first payment being due one year from now. The building has an
expected life of 20 years. Ignoring effects on income tax, what is the difference between buying the building and leasing
the building?
A. P233,779.27
B. P233,070.12
C. P234,070.34
D. P234,560.12
View Answer:
688. Triple J Construction Firm had put up for sale of some of their heavy equipment for construction works. There were
two interested buyers submitting their respective bids for the heavy equipment. The bids are as follows:
Buyer A offers P10,000,000 payable 20% down payment, the balance payable P1,000,000 annually for 8 years. Buyer B
offers P9,000,000 payable P2,000,000 down payment, the balance payable P500,000 semi-annually for 7 years.
How much is the difference between the two bids if money is worth 10% effective?
A. P346,520.05
B. P346,980.12
C. P347,019.45
D. P347,733.29
View Answer:
689. Froyd Review & Training Center Inc. is expanding its school facilities starting 2001. The program requires the
following estimated expenditures:
P1,000,000 at the end of 2001
P1,200,000 at the end of 2002

P1,500,000 at the end of 2003
To accumulate the required funds, it establish a sinking fund constituting of 15 uniform annual deposits, the first deposit
has been made at the end of 1992. The interest rate of the fund is 2% per annum. Calculate the annual deposit.
A. P217,520.05
B. P216,980.12
C. P217,679.01
D. P216,733.29
View Answer:
690. Froyd Review & Training Center Inc. is expanding its school facilities starting 2001. The program requires the
following estimated expenditures:
P1,000,000 at the end of 2001
P1,200,000 at the end of 2002
P1,500,000 at the end of 2003
To accumulate the required funds, it establish a sinking fund constituting of 15 uniform annual deposits, the first deposit
has been made at the end of 1992. The interest rate of the fund is 2% per annum. Calculate the balance in the fund on
January 1, 2002.
A. P2,185,902.11
B. P2,195,600.03
C. P2,165,399.54
D. P2,175,380.00
View Answer:
691. Padilla Pawnshop sells jewelries on either of the following arrangements:
Cash Price: Discount of 10% of the marked price
Installment: Down payment of 20% of the marked price and the balance payable in equal annual installments for the
next 4 years.
If you are buying a necklace with a marked price of P5,000, how much is the difference between buying in cash and
buying in installment? Assume that money is worth 5%.
A. P40.76
B. P41.90
C. P43.54
D. P45.95
View Answer:
692. Lim Bon Fing Y Hermanos Inc has offered for sale its two-storey building in the commercial district of Cebu City. The
building contains two stores on the ground floor and a number of offices on the second floor.
A prospective buyer estimates that if he buys this property, he will hold it for about 10 years. He estimates that the
average receipts from the rental during this period to be P350,000.00 and the average expenses for all purpose in
connection with its ownership and operation (maintenance and repairs, janitorial services, insurance, etc.) to be
P135,000.00. He believes that the property can be sold for a net of P2,000,000 at the end of the 10th year. If the rate of
return on this type of investment is 7%, determine the cash price of this property for the buyer to recover his investment
with a 7% return before income taxes.
A. P2,526,768.61
B. P2,490,156.34
C. P2,390,189.00
D. P2,230,120.56
View Answer:
693. Bicol Hardware Inc is considering two alternative strategies for a new power tool. According to Jun Ramos who is
introducing the power tool, the new product will require an outlay of P30,000 with a low price strategy. The product will
generate cash proceeds of P20,000 per year and will have a life to two years. With a high price strategy, the product will
generate cash proceeds of P36,000 but will have a life of only one year. The cost of money for the company is 10%.
Determine the net present value of the low price strategy.
A. P34,389.12
B. P34,490.10
C. P34,518.89
D. P34,710.74
View Answer:
694. Bicol Hardware Inc is considering two alternative strategies for a new power tool. According to Jun Ramos who is
introducing the power tool, the new product will require an outlay of P30,000 with a low price strategy. The product will
generate cash proceeds of P20,000 per year and will have a life to two years. With a high price strategy, the product will
generate cash proceeds of P36,000 but will have a life of only one year. The cost of money for the company is 10%.
Determine the net present value of the high price strategy.
A. P32,727.27
B. P33,737.34
C. P33,747.20
D. P33,757.89
View Answer:
695. John Smith plans to purchase a new house costing P1,000,000. He can raise the building by issuing a 10%, 20 year
old bond that would pay P150,000 interest per year and repay the face amount at maturity. Instead of buying the new
house, Jan Michael has an option of leasing it for P140,000 per year, the first payment due one year from now. The
building has an expected life of 20 years. If interest charge for leasing is 12%, which of the following is true?
A. Lease is more economical than borrow and buy.
B. Lease has same result with borrow and buy.
C. Borrow and buy is half the value than lease.
D. Borrow and buy is economical by almost a hundred thousand than lease.
View Answer:
696. Engr. Edward Zuela is considering establishing his own business. An investment of P100,000 will be required which
must be recovered in 15 years. It is estimated that sales will be P150,000 per year and that annual operating expenses
will be as follows:
Materials P40,000
Labor P70,000
Overhead P10,000 + 10% of sales
Selling expenses P5,000
Engr. Zuela will give up his regular job paying P15,000 per year and devote full time to the operation of the business.
This will result in decreasing labor cost by P10,000 per year, material cost by P7,000 per year and overhead cost by
P8,000 per year. If he expects to earn at least 20% of his capital, is investing in this business a sound idea?
A. Yes, it is a sound idea
B. No, it is not a sound idea
C. Neither yes nor no because it simply breakeven
D. It depends on the current demand of the market.
View Answer:
697. A housewife bought a brand new washing machine costing P12,000 if paid in cash. However, she can purchase it on
installment basis to be paid within 5 years. If money is worth 8% compounded annually, what is her yearly amortization
if all payments are to be made at the beginning of each year?
A. P2,617.65
B. P2,782.93
C. P2,890.13
D. P2,589.90
View Answer:
698. A Civil Engineering student borrowed P2,000.00 to meet college expenses during his senior year. He promised to
repay the loan with interest at 4.5% in 10 equal semi-annual installments, the first payment to be made 3 years after the
date of the loan. How much will this payment be?
A. P252.12
B. P261.89
C. P273.90
D. P280.94
View Answer:
699. A father wishes to provide P40,000 for his son on his son’s 21st birthday. How much should he deposit every 6
months in a savings account which pays 3% compounded semi-annually, if the first deposit was made when the son was
3 ½ years old?
A. P829.68
B. P815.80
C. P830.12
D. P846.10
View Answer:
700. A group of Filipino Mechanical Engineers formed a corporation and the opportunity to invest P8,000,000 in either
of the two situations. The first is to expand a domestic operation. It is estimated that this investment would return a net
year end cash flow of P2,000,000 each year for 10 years and at the end of that time, the physical assets, which would no
longer be needed, could be sold at P5,000,000. The alternative opportunity would involve building and operating a plant
in a foreign country. This operation would involve no net cash flow during the first 3 years, but it is believed that,
beginning with the end of the fourth year, an annual flow of P4,000,000 would be received, running through the end of
the 10th year. After that time, it is believed that the operation and facilities might be expropriated, with little, if any,
compensation, being paid. Which of the following is true?
A. Foreign operation yields bigger rate of return.
B. Domestic and foreign operations yield the same rate of return.
C. Domestic operation has double the rate of return of the foreign operation.
701. A house costs P400,000 cash. A purchaser will pay P90,000 cash, P60,000 at the end of 2 years and a sequence of 6
equal annual payments starting with one at the end of 4 years, to discharge all his liabilities as to the principal and
interest at 7% compounded annually. Find the annual payment which must be made for 6 years.
A. P66,204.14
B. P65,701.67
C. P67,901.34
D. P68,900.12
View Answer:
702. Two years ago, the rental for the use of equipment and facilities as paid 5 years in advance, with option to renew
the rent for another years by payment of P15,000 annually at the start of each year for the renewal period. Now, the
lessor asks the lessee if it could be possible to prepay the rental that will be paid annually in the renewed 5 years period.
If the lessee will consider the request, what would be the fair prepayment to be made to the lessor if interest is now
figured at 8 %?
A. P51,843.90
B. P51,346.58
C. P52,002.45
D. P52,740.20
View Answer:
703. NSN Builders plans to construct an additional building at the end of 10 years for an estimated cost of
P5,000,000.00. To accumulate the amount, it will have equal year end deposits in a fund earning 13%. However, at the
end of the 5th year, it was decided to have a larger building that originally intended to an estimated cost of
P8,000,000.00. What should be the annual deposit for the last 5 years?
A. P734,391.48
B. P742,890.10
C. P738,900.45
D. P740,010.86
View Answer:
704. The quantity of a certain commodity that is offered for sale at a certain price at a given place and time.
A. Demand
B. Supply
C. Stocks
D. Goods
View Answer:
705. Work-in process is classified as:
A. An asset
B. A liability
C. An expenses
D. An owner’s equity
View Answer:
706. What is the highest position in the corporation?
A. President
B. Board of Directors
C. Chairman of the Board
D. Stockholders
View Answer:
707. Type of ownership in business where individuals exercise and enjoy the right in their own interest.
A. Equitable
B. Public
C. Private
D. Pure
View Answer:
708. Decrease in the value of a physical property due to the passage of time.
A. Inflation
B. Depletion
C. Recession
D. Depreciation
View Answer:
709. An association of two or more individuals for the purpose of operating a business as co-owners for profit.
A. Sole proprietorship
B. Company
C. Partnership
D. Corporation
View Answer:
710. We may classify an interest rate, which specifies the actual rate of interest on the principal for one year as:
A. Nominal rate
B. Rate of return
C. Exact interest rate
D. Effective rate
View Answer:
711. It is defined to be the capacity of a commodity to satisfy human want.
A. Discount
B. Luxury
C. Necessity
D. Utility
View Answer:
712. It is the amount which 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. Market value
C. Book value
D. Salvage value
View Answer:
A. Perfect competition
B. Oligopoly
C. Monopoly
D. Elastic demand
View Answer:
714. These are products or services that are desired by human and will be purchased if money is available after the
required necessities have been obtained.
A. Utilities
B. Necessities
C. Luxuries
D. Products, goods and services

View Answer:
715. These are products or services that are required to support human life and activities, that will be purchased in
somewhat the same quantity even though the price varies considerably.
A. Utilities
B. Necessities
C. Luxuries
D. Products, goods and services
View Answer:
716. A condition where only few individuals produce a certain product and that any action of one will lead to almost the
same action of the others.
A. Oligopoly
B. Semi-monopoly
C. Monopoly
View Answer:
717. Grand total of the assets and operational capability of a corporation.
A. Authorized capital
B. Investment
C. Subscribed capital
D. Money market
View Answer:
718. The worth of the property equals to the original cost less depreciation.
A. Scrap value
B. Face value
C. Market value
D. Book value
View Answer:
719. Money paid for the use of borrowed capital.
A. Discount
B. Credit
C. Interest
D. Profit
View Answer:
720. Liquid assets such as cash, and other assets that can be converted quickly into cash, such as accounts receivable
and merchandise are called:
A. Total assets
B. Fixed assets
C. Current assets
D. None of these
View Answer:
721. The length of time which the property may be considered at a profit.
A. Physical life
B. Economic life
C. Operating life
D. All of these
View Answer:
722. The provision in the contract that indicates the possible adjustment of material cost and labor cost.
A. Secondary cause
B. Escalatory clause
C. Contingency clause
D. Main clause
View Answer:
723. The present worth of all depreciation over the economic life of the item is called
A. Book value
B. Capital recovery
C. Depreciation recovery
D. Sinking fund
View Answer:
724. Gross profit, sales less cost of goods sold, as a percentage of sales is called:
A. Profit margin
B. Gross margin
C. Net income
D. Rate of return
View Answer:
725. Worth of the property as shown in the accounting records of an enterprise.
A. Fair value
B. Market value
C. Salvage value
D. Book value
View Answer:
726. Those funds that are required to make the enterprise or project a going concern.
A. Initial investment
B. Current accounts
C. Working capital
D. Subscribed capital
View Answer:
727. A market situation where there is only one seller with many buyer.
A. Monopoly
B. Monopsony
C. Oligopoly
D. Oligopsony
View Answer:
728. A market situation where there are few sellers and few buyers.
A. Oligopoly
B. Oligopsony
C. Bilateral oligopoly
D. Bilateral oligopsony
View Answer:
729. A market situation where there is one seller and one buyer.
A. Monopoly
B. Monopsony
C. Bilateral monopoly
D. Bilateral monopsony
View Answer:
730. A market situation where there are only two buyers with many sellers.
A. Duopoly
B. Oligopoly
C. Duopsony
D. Oligopsony
View Answer:
731. The cumulative effect of elapsed time on the money value of an event, based on the earning power of equivalent
invested funds capital should or will learn.
A. Present worth factor
B. Interest rate
C. Time value of money
D. Yield
View Answer:
732. Defined as the future value minus the present value.
A. Interest
B. Rate of return
C. Discount
D. Capital
View Answer:
733. The flow back of profit plus depreciation from a given project is called:
A. Capital recovery
B. Cash flow
C. Economic return
D. Earning value
View Answer:
734. An investment consisting of deposits of P1,000, P1,500 and P2,000 are made at the end of the 2nd year, 3rd year
and 4th year, respectively. If money is worth 10%, what is the equivalent present worth of the investment?
A. P3,129.89
B. P3,319.45
C. P3,372.12
D. P3,490.09
View Answer:
735. Miss Marcial deposited P1,000, P1,500 and P2,000 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. P4,880.00
B. P4,820.00
C. P4,860.00
D. P4,840.00
View Answer:
736. Miss Santos deposited P1,000, P1,500 and P2,000 at the end of the 2nd year, 3rd year and 4th year, respectively in
a savings account which earned 10% per annum. What is the equivalent uniform deposit for the uniform gradient only?
A. P670.81
B. P690.58
C. P660.53
D. P680.12
View Answer:
737. An amortization of a debt is in a form of a gradient series of P5,000 on the first years, P4,500 on the second year,
P4,000 on the third year and P3,500 on the fourth year. What is the equivalent present worth of the debt if interest is
5%?
A. P15,093.28
B. P15,178.34
C. P15,890.12
D. P15,389.82
View Answer:
P4,000 on the third year, P3,500 on the fourth year. Determine future amount of the amortization if interest is 5%.
A. P18,030.56
B. P18,290.12
C. P18,621.89
D. P18,449.37
View Answer:
P4,000 on the third year, P3,500 on the fourth year. What is the equivalent uniform periodic payment if interest is 5%?
A. P4,280.47
B. P4,378.17
C. P4,259.68
D. P4,325.12
View Answer:
740. An NBA Basketball superstar, playing for Los Angeles Lakers is earning an average annual salary of $5,000,000 for 10
years. Chicago Bulls ball club would like to acquire his services as a replacement of the retired Michael Jordan, offered
him an initial annual salary of $3,000,000 but is increasing at the rate of $400,000 annually. If he can still play in the NBA
for 10 years and money is worth 10%, which one is true?
A. Chicago Bulls’ offer is smaller than that of LA Lakers’
B. Chicago Bulls’ offer is exactly the same as LA Lakers’
C. Chicago Bulls’ offer is just few dollars more per year than that of LA Lakers’
D. Chicago Bulls’ offer is over $150,000 per year than that of LA Lakers’
View Answer:
741. John Grisham, author of the best-selling novel “The Chamber” sold its copyright to Warner Bros. for the rights to
make it into a motion picture. Mr. Grisham’s has options between the following Warner Bros. proposals:
A. An immediate lump sum payment of $5,000,000.
B. An initial payment of $2,500,000 plus 4% of the movie’s gross receipts for the next 5 years which is forecasted as
follows:
End of year Gross receipt 4% of Gross Receipt
1 $10,000,000.00 $400,000.00
2 $8,000,000.00 $320,000.00
3 $6,000,000.00 $240,000.00
4 $4,000,000.00 $160,000.00
5 $2,000,000.00 $80,000.00
If money is worth 10% and Mr. Grisham will not receive any royalty after the fifth year of exhibition of the movie, by how
much is proposal A bigger than proposal B?
A. P1,532,630
B. P1,390,090
C. P1,478,100
D. P1,289,450
View Answer:
742. Two sisters, Joan and Jocelyn decided to save money in funds that earns 14% compounded annually but on
different ways. Joan decided to save by making an end-of-year deposit of P1,000 on the first year, P1,100 on the second
year, P1,210 on the third year and so on increasing the next year’s deposit by 10% of the deposit in the preceding year
until the end of the 10th year. Jocelyn decided to save by just making an equal deposit of P1,400 annually for 10 years.
Who has more savings at the end of 10 years and by how much bigger compared to the other sister?
A. Jocelyn, P671.18
B. Jocelyn, P763.27
C. Joan, P671.18
D. Joan, P763.27
View Answer:
743. Engr. Maragat, believing that life begins at 40, decided to retire and start enjoying life at age 40. He wishes to have
upon his retirement the sum of P5,000,000. On his 21st birthday, he deposited a certain amount and increased his
deposit by 15% each year until he will be 40. If the money is deposited in a super savings account which earns 15%
interest compounded annually, how much was his initial deposit?
A. P17,253.18
B. P17,566.33
C. P17,672.77
D. P17,490.21
View Answer:
744. A newly-acquired equipment requires an annual maintenance costs of P10,000. If the annual maintenance cost is
increased by 20% each year every year for 10 years, what is the estimated present worth of the maintenance costs if
money is worth 15%?
A. P105,712.33
B. P106,101.37
C. P107,490.12
D. P108,890.11
View Answer:
contributors or claims of other based on profit.
A. Economic return
B. Yield
C. Earning value
D. Expected yield
View Answer:
746. The payment for the use of borrowed money is called:
A. Loan
B. Maturity value
C. Interest
D. Principal
View Answer:
747. 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. Effective rate
B. Nominal rate
C. Rate of return
D. Yield
View Answer:
748. 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
B. Interest rate
C. Investment
D. All of these
View Answer:
749. The true value of interest rate computed by equations for compound interest for a 1 year period is known as:
A. Expected return
B. Interest
C. Nominal interest
D. Effective interest
View Answer:
750. The intangible item of value from the exclusive right of a company to provide a specific product or service in a
stated region of the country.
A. Market value
B. Book value
C. Goodwill value
D. Franchise value
751. The recorded current value of an asset is known as:
A. Scrap value
B. Salvage value
C. Book value
D. Present worth
View Answer:
752. Scrap value of an asset is sometimes known as:
A. Book value
B. Salvage value
C. Replacement value
D. Future value
View Answer:
753. What is sometimes called second-hand value?
A. Scrap value
B. Salvage value
C. Book value
D. Going value
View Answer:
754. An intangible value which is actually operating concern has due to its operation.
A. Book value
B. Fair value
C. Goodwill value
D. Going value
View Answer:
755. A company issued 50 bonds of P1,000.00 face value each, redeemable at par at the end of 15 years. To accumulate
the funds required for redemption the firm established a sinking fund consisting of annual deposits, the interest rate of
A. P37,002.54
B. P37,520.34
C. P38,010.23
D. P38,782.34
View Answer:
756. A local firm is establishing a sinking fund for the purpose of accumulating a sufficient capital to retire its outstanding
bonds at maturity. The bonds are redeemable in 10 years and their maturity value is P150,000.00. How much should be
deposited each year if the fund pays interest at the rate of 3%?
A. P13,084.58
B. P13,048.85
C. P13,408.58
D. P13,480.58
View Answer:
757. A P1,000,000 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%
View Answer:
758. A man was offered a Land Bank certificate with a face value of P100,000 which is bearing interest of 6% per year
payable semiannually and due in 6 years. If he wants to earn 8% semiannually, how much must he pay the certificate?
A. P90,123.09
B. P90,614.93
C. P90,590.12
D. P90,333.25
View Answer:
759. A P1,000 bond which will mature in 10 years and with a bond rate of 8% payable annually is to be redeemed at par
at the end of this period. It is sold at P1,030. Determine the yield at this price.
A. 7.56%
B. 7.65%
C. 7.75%
D. 7.86%
View Answer:
760. You purchase a bond at P5,100. The bond pays P200 per year. It is redeemable for P5,050 at the end of 10 years.
What is the net rate of interest on your investment?
A. 3.56%
B. 3.85%
C. 3.75%
D. 3.68%
View Answer:
761. A P1,000, 6% bond pays dividend semiannually and will be redeemed at 110% on June 21, 2004. It is bought on
June 21, 2001 to yield 4% interest. Find the price of the bond.
A. P1,122.70
B. P1,144.81
C. P1,133.78
D. P1,155.06
View Answer:
762. The value which a disinterested third party, different from the buyer and seller, will determine in order to establish
a price acceptable to both parties.
A. Market value
B. Goodwill value
C. Fair value
D. Franchise value
View Answer:
763. A type of annuity where the payments are made at the end of each payment period starting from the first period.
A. Ordinary annuity
B. Annuity due
C. Deferred annuity
D. Perpetuity
View Answer:
764. It is a series of equal payments occurring at equal intervals of time where the first payment is made after several
periods, after the beginning of the payment.
A. Deferred annuity
B. Delayed annuity
C. Progressive annuity
D. Simple annuity
View Answer:
765. A type of annuity where the payments are made at the start of each period, beginning from the first period.
A. Ordinary annuity
B. Annuity due
C. Deferred annuity
D. Perpetuity
View Answer:
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 each period.
D. Compound interest is paid on all amounts in the annuity.
View Answer:
767. A is a periodic payment and I is the interest rate, then present worth of a perpetuity =
A. Ai
B. Ain
C. An/i
D. A/i
View Answer:
768. A mathematical expression also known as the present value of an annuity of 1 is called
A. Load factor
B. Demand factor
C. Sinking fund factor
D. Present worth factor
View Answer:
769. As applied to a 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 program is called
A. Annuity
B. Capital recovery
C. Annuity factor
D. Amortization
View Answer:
770. 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
View Answer:
771. 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 which the depreciation applies.
A. Straight line method
B. Sinking fund method
C. SYD method
D. Declining balance method
View Answer:
772. A VOM has a selling price of P400. 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. P222.67
B. P212.90
C. P236.20
D. P231.56
View Answer:
773. A machine costs P8,000 and an estimated life of 10 years with a salvage value of P500. What is its book value after 8
years using straight line method?
A. P2,000.00
B. P2,100.00
C. P2,200.00
D. P2,300.00
View Answer:
774. A telephone company purchased a microwave radio equipment for P6 million, freight and installation charges
amounted to 4% of the purchased price. If the equipment will be depreciated over a period of 10 years with a salvage
value of 8%, determine the depreciation cost during the 5th year using SYD.
A. P626,269.09
B. P623,209.09
C. P625,129.09
D. P624,069.89
View Answer:
A. 7 years
B. 8 years
C. 9 years
D. 10 years
View Answer:
776. A company purchases an asset for P10,000.00 and plans to keep it for 20 years. If the salvage value is zero at the
end of the 20th year, what is the depreciation in the third year? Use SYD method.
A. P857.14
B. P862.19
C. P871.11
D. P880.00
View Answer:
777. An asset is purchased for P500,000.00. The salvage value in 25 years is P100,000.00. What is the total depreciation
in the first three years using straight-line method?
A. P45,000.00
B. P46,000.00
C. P47,000.00
D. P48,000.00
View Answer:
778. 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
5 years using straight line depreciation?
A. P30,000.00
B. P31,000.00
C. P30,500.00
D. P31,500.00
View Answer:
book value during the first year if SYD depreciation is used.
A. P7,545.45
B. P7,320.11
C. P7,490.00
D. P7,690.12
View Answer:
equipment at the end of years, determine the book value at the end of the fourth year. Use straight-line method.
A. P146,320.50
B. P146,000.00
C. P146,230.50
D. P146,023.50
View Answer:
depreciation for the first year using SYD method.
A. P1,545.45
B. P1,454.54
C. P1,344.21
D. P1,245.45
View Answer:
782. A machine has an initial cost of P50,000 and a salvage value of P10,000 after 10 years. Find the book value after 5
years using straight-line depreciation.
A. P31,000.00
B. P31,500.00
C. P30,000.00
D. P30,500.00
View Answer:
783. A machine has an initial cost of P50,000.00 and a salvage value of P10,000.00 after 10 years. What is the straight
line method depreciation rate as a percentage of the initial cost?
A. 10%
B. 8%
C. 7%
D. 9%
View Answer:
784. A machine costing P45,000 is estimated to have a book value of P4,350 when retired at the end of 6 years.
Depreciation cost is computed using a constant percentage of the declining book value. What is the annual rate of
depreciation in %?
A. 32.50%
B. 32.25%
C. 32.00%
D. 32.75%
View Answer:
785. An asset is purchased for P120,000.00. Its estimated life is 10 years, after which it will be sold for P12,000.00. Find
the depreciation for the second year using the sum-of-years’ digit method.
A. P17,578.13
B. P17,412.43
C. P17,344.67
D. P17,672.73
View Answer:
786. A machine costing P720,000 is estimated to have a book value of P40,545.73 when retired at the end of 10 years.
depreciation in %?
A. 25%
B. 26%
C. 27%
D. 28%
View Answer:
Find the depreciation in the first three years using straight line method.
A. P2,400.00
B. P2,412.34
C. P2,250.00
D. P2,450.00
View Answer:
other expenses. The estimated useful life of the equipment is 10 years. The salvage value is x% of the first cost. Using the
straight line method of depreciation, the book value at the end of 5 years will be P291,500. What is the value of x?
A. 0.2
B. 0.4
C. 0.3
D. 0.1
View Answer:
789. The initial cost of a paint sand mill, including its installation, is P800,000. The BIR approved life of this machine is 10
years for depreciation. The estimated salvage value of the mill is P50,000 and the cost of dismantling is estimated to be
P15,000. Using straight-line depreciation, what is the annual depreciation charge?
A. P75,500.00
B. P76,000.00
C. P76,500.00
D. P77,000.00
View Answer:
790. The initial cost of a paint sand mill, including its installation, is P800,000. The BIR approved life of this machine is 10
P15,000. Using straight-line depreciation, what is the book value of the machine at the end of six years?
A. P341,000.00
B. P343,000.00
C. P340,000.00
D. P342,000.00
View Answer:
791. A unit of welding machine cost P45,000 with an estimated life of 5 years. Its salvage value is P2,500. Find its
depreciation rate by straight-line method.
A. 18.89%
B. 19.21%
C. 19.58%
D. 19.89%
View Answer:
792. A tax and duty free importation of a 30 hp sandmill for paint manufacturing cost P360,000.00. Bank charges
arrastre and brokerage cost P5,000.00. Foundation and installation costs were P25,000.00. Other incidental expenses
amount to P20,000.00. Salvage value of the mill is estimated to be P60,000 after 20 years. Find the appraisal value of the
mill using straight line depreciation at the end of 10 years.
A. P234,000.00
B. P235,000.00
C. P234,500.00
D. P235,500.00
View Answer:
793. An equipment costs P10,000 with a salvage value of P500 at the end of 10 years. Calculate the annual depreciation
cost by sinking-fund method at 4% interest.
A. P791.26
B. P792.61
C. P726.17
D. P771.26
View Answer:
794. A machine initially worth P50,000 depreciates in value each year by 20% of its value at the beginning of that year.
Find its book value when it is 9 years old.
A. P6,710.89
B. P6,400.89
C. P6,666.89
D. P6,512.78
View Answer:
795. A consortium of international telecommunications companies contracted for the purchase and installation of fiber
optic cable linking Manila City and Cebu City at a total cost of P960 million. This amount includes freight and installation
charges estimated at 10% of the above total contract price. If the cable shall be depreciated over a period of 15 years
with zero salvage value and money is worth 6% per annum, what is the annual depreciation charge?
A. P41,044,903.40
B. P41,211,158.40
C. P41,254,000.40
D. P41,244,253.40
View Answer:
Find the depreciation in the first three years using sum-of-years’ digit method.
A. P3,279.27
B. P3,927.27
C. P3,729.27
D. P3,792.72
View Answer:
797. A radio service panel truck initially cost P560,000. Its resale value at the end of the 5th year of the useful life is
estimated at P150,000. By means of declining balance method, determine the depreciation charge for the second year.
A. P99,658.41
B. P99,128.45
C. P99,290.00
D. P99,378.45
View Answer:
798. Shell Philippines, a multinational company, has a total gross income for a particular year of P50,000,000. The
taxable income after taking all deductions except for depletion is P18,500,000. What is the allowable depletion
allowance for that particular year? Take percentage of gross income for oil as 22%.
A. P9,358.41
B. P9,228.45
C. P9,250.00
D. P9,308.45
View Answer:
799. 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. $500,000,000
B. $510,000,000
C. $525,000,000
D. $550,000,000
View Answer:
800. The first cost of a certain equipment is P324,000 and a salvage value of P50,000 at the end of its life of 4 years. If
money is worth 6% compounded annually, find the capitalized cost.
A. P540,090.34
B. P541,033.66
C. P540,589.12
D. P541,320.99
801. An item is purchased for P100,000. Annual cost is P18,000. Using interest rate of 8%, what is the capitalized cost of
perpetual service?
A. P310,000
B. P315,000
C. P320,000
D. P325,000
View Answer:
802. A corporation uses a type of motor which costs P5,000 with 2 life years and final salvage value of P800. How much
could the corporation afford to pay for another type of motor of the same purpose whose life is 3 years a with a final
salvage value of P1,000. Money is worth 4%.
A. P7,892.13
B. P7,157.40
C. P7,489.21
D. P7,300.12
View Answer:
803. A motorcycle costs P50,000 and has an expected life of 10 years. The salvage value is estimated to be P2,000 and
annual operating cost is estimated at P1,000. What is the appropriate rate of return on the investment if the annual
revenue is P10,000?
A. 12.12%
B. 12.54%
C. 12.72%
D. 12.99%
View Answer:
804. At 6%, find the capitalized cost of a bridge whose cost is P250M and life is 20 years, if the bridge must be partially
rebuilt at a cost of P100M at the end of each 20 years.
A. P297,308,323.10
B. P298,308,323.10
C. P296,308,323.10
D. P295,308,323.10
View Answer:
805. A new broiler was installed by a textile plant at a total cost of P300,000 and projected to have a useful life of 15
years. At the end of its useful life, it is estimated to have a salvage value of P30,000. Determine its capitalized cost if
interest is 18% compounded annually.
A. P323,500.33
B. P322,549.33
C. P332,509.33
D. P341,240.33
View Answer:
806. A man planned of building a house. The cost of construction is P500,000 while annual maintenance cost is
estimated at P10,000. If the interest rate is 6%, what is the capitalized cost of the house?
A. P666,000.00
B. P666,666.67
C. P633,333.33
D. P650,000.00
View Answer:
807. An untreated electrical wooden pole that will last 10 years under a certain soil condition, costs P1,200.00. If a
treated pole will last for 20 years, what is the maximum justifiable amount that can be paid for the treated pole, if the
maximum return on investment is 12%. Consider annual taxes and insurance amount to be 1% of the first cost.
A. P1,612.01
B. P1,559.50
C. P1,789.23
D. P1,409.38
View Answer:
808. A granite quarry purchased for P1,600,000 is expected to be exhausted at the end of 4 years. If the resale value of
the land is P100,000, what annual income is required to yield an investment rate of 12%? Use a sinking fund rate of 3%.
A. P550,540.57
B. P551,540.57
C. P552,540.57
D. P553,540.57
View Answer:
809. A manufacturer produces certain items at a labor cost per unit of P315, material cost per unit is P100, variable cost
of P3.00 each. If the item has a selling price of P995, how many units must be manufactured each month for the
manufacturer to breakeven if the monthly overhead is P461,600?
A. 782
B. 800
C. 806
D. 812
View Answer:
810. The annual maintenance cost of a machine shop is P69,994. If the cost of making a forging is P56 per unit and its
selling price is P135 per forged unit, find the number of units to be forged to break-even.
A. 892
B. 870
C. 886
D. 862
View Answer:
811. A manufacturer produces certain items at a labor cost of P115 each, material cost of P76 each and variable cost of
P2.32 each. If the item has a unit price of P600, 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
View Answer:
812. Steel drum manufacturer incurs a yearly fixed operating cost of $200,000. Each drum manufactured cost $160 to
produce and sells $200. What is the manufacturer’s break-even sales volume in drums per year?
A. 5,031
B. 5,017
C. 5,043
D. 5,000
View Answer:
813. XYZ Corporation manufactures bookcases that sell for P65.00 each. It costs XYZ corporation P35,000 per year to
operate its plant. This sum includes rent, depreciation charges on equipment, and salary payments. If the cost to
produce one bookcase is P50.00, how many cases must be sold each year for XYZ to avoid taking a loss?
A. 2,334
B. 2,443
C. 2,223
D. 2,322
View Answer:
814. A company which manufactures electric motors has a production capacity of 200 motors a month. The variable
costs are P150.00 per motor. The average selling price of the motors is P275.00. Fixed costs of the company amount to
P20,000 per month which includes taxes. Find the number of motors that must be sold each month to breakeven.
A. 160
B. 157
C. 153
D. 163
View Answer:
815. The annual maintenance cost of a machine is P70,000. If the cost of making a forging is P56 and its selling price is
P125 per forged unit. Find the number of units to be forged to breakeven.
A. 1,000
B. 1,012
C. 1,015
D. 1,018
View Answer:
A. 1.0 hours per unit
B. 1.2 hours per unit
C. 1.4 hours per unit
D. 1.6 hours per unit
View Answer:
817. Compute the number of blocks that an ice plant must be able to sell per month to break even based on the
following data:
Cost of electricity per block – P20.00
Tax to be paid per block – P2.00
Real Estate Tax – P3,500.00 per month
Salaries and Wages – P25,000.00 per month
Others – P12,000.00 per month
Selling price of ice – P55.00 per block
A. 1,220
B. 1,224
C. 1,228
D. 1,302
View Answer:
818. JRT Industries manufactures automatic voltage regulators at a labor cost of P85.00 per unit and material cost of
P350.00 per unit. The fixed charges on the business are P15,000 per month and the variable costs are P20.00 per unit. If
the automatic voltage regulators are sold to retailers at P580.00 each, how many units must be produced and sold per
month to breakeven?
A. 120
B. 124
C. 128
D. 130
View Answer:
819. General Electric Company which manufactures electric motor has a capacity of producing 150 motors a month. The
variable costs are P4,000.00 per month, the average selling price of the motor is P750.00 per motor. Fixed costs of the
company amount to P78,000.00 per month which includes all taxes. Determine the number of motors to be produced
per month to breakeven.
A. 100
B. 104
C. 110
D. 112
View Answer:
820. A telephone switchboard 100 pair cable can be made up with either enamelled wire or tinned wire. There will be
400 soldered connections. The cost of soldering a connection on the enamelled wire will be P1.65, on the tinned wire, it
will be P1.15. A 100-pair cable made up with enamelled wire cost P0.55 per linear foot and those made up of tinned wire
cost P0.75 per linear foot. Determine the length of cable run in feet so that the cost of each installation would be the
same.
A. 1,000 feet
B. 1,040 feet
C. 1,100 feet
D. 1,120 feet
View Answer:
821. A local factory assembling calculators produces 400 units per month and sells them at P1,800 each. Dividends are
8% on the 8,000 shares with par value of P250 each. The fixed operating cost per month is P25,000. Other costs are
P1,000 per unit. If 200 units were produced a month, determine the profit or loss.
A. Profit of P121,666.67
B. Profit of P21,666.67
C. Loss of P121,666.67
D. Loss of P21,666.67
View Answer:
822. Nike shoes manufacturer produces a pair of Air Jordan Shoes at a labor cost of P900.00 a pair and a material cost of
P800.00 a pair. The fixed charges on the business are P5,000,000 a month and the variable costs are P400.00 a pair.
Royalty to Michael Jordan is P1,000 per pair of shoes sold. If the shoes sell at P5,000 a pair, how many pairs must be
produced each month for the manufacturer to breakeven?
A. 2,590
B. 2,632
C. 2,712
D. 2,890
View Answer:
823. In a steel fabrication shop located somewhere in Cebu, various size rivet holes must be made in structural
members. This may be done by laying out the position of the hole on the members and using a drill press for this
method, a machinist wage rate is P20.25 per hour and he can drill 27 holes per hour. An alternative method is by the use
of the multiple punch machine. In this process, the machinist wage rate is P20.00 per hour and he can complete 8 holes
per minute. This method requires P0.50 per holes to set the multiple punch machine and an installation cost of
P2,000.00. If all other costs are the same, for what number of rivet holes will the multiple punch machine pay for itself?
A. 9,601
B. 9,592
C. 9,581
D. 9,566
View Answer:
824. A new civil engineer produces a certain construction material at a labor cost of P16.20 per piece, material cost of
P38.50 per piece and variable cost of P7.40 per piece. The fixed charge on the business is P100,000.00 per month. If he
sells the finished product at P95.00 each, how many pieces must be manufactured in each month to breakeven?
A. 3,045
B. 3,035
C. 3,030
D. 3,040
View Answer:
825. The Asian Transmission Co. makes and sells certain automotive parts. Present sales volume is 500,000 units per
year at a selling price of fifty centavos (P0.50) per unit. Fixed expenses total P80,000.00 per year. What is the present
total profit for a year?
A. P168,000
B. P170,000
C. P172,000
D. P174,000
View Answer:
826. The Asian Transmission Co. makes and sells certain automotive parts. Present sales volume is 500,000 units per
year at a selling price of fifty centavos (P0.50) per unit. Fixed expenses total P80,000.00 per year. What is the present
breakeven point in units?
A. 160,000
B. 162,000
C. 165,000
D. 170,000
View Answer:
827. A factory engaged in the fabrication of an automobile part with a production capacity of 700,000 units per year is
only operating at 62% of capacity due to unavailability of the necessary foreign currency to finance the importation of
their raw materials. The annual income is P430,000.00. Annual fixed costs are P190,000.00 and the variable costs are
P0.348 per unit. What is the current profit or loss?
A. P87,450
B. P88,960
C. P88,450
D. P87,960
View Answer:
828. A factory engaged in the fabrication of an automobile part with a production capacity of 700,000 units per year is
only operating at 62% of capacity due to unavailability of the necessary foreign currency to finance the importation of
their raw materials. The annual income is P430,000.00. Annual fixed costs are P190,000.00 and the variable costs are
P0.348 per unit. What is the breakeven point?
A. 294,560
B. 291,000
C. 290,780
D. 295,490
View Answer:
829. A certain firm has the capacity to produce 650,000 units of product per year. At present, it is operating at 62%
capacity. The firm’s annual income is P4,160,000.00. Annual fixed costs are P1,920,000.00 and the variable costs are
equal to P3.56 per unit of product. What is the firm’s annual profit or loss?
A. P814,320
B. P815,230
C. P816,567
D. P817,239
View Answer:
capacity. The firm’s annual income is P4,160,000.00. Annual fixed costs are P1,920,000.00 and the variable costs are
equal to P3.56 per unit of product. What volume of sales does the firm breakeven?
A. P3,354,680
B. P3,534,880
C. P3,155,690
D. P3,254,680
View Answer:
831. A small shop in Bulacan fabricates threshers for palay producers in the locality. The shop can produce each thresher
at a labor cost of P1,800.00. The cost of materials for each unit is P2,500.00. The variable costs amounts to P650.00 per
unit while fixed charges incurred per annum totals P69,000.00. If the portable threshers are sold at P7,800.00 per unit,
how many units must be produced and sold per annum to breakeven?
A. 28
B. 25
C. 26
D. 27
View Answer:
832. The direct labor cost and material cost of a certain product are P300 and P400 per unit, respectively. Fixed charges
are P100,000 per month and other variable costs are P100 per unit. If the product is sold at P1,200 per unit, how many
units must be produced and sold to breakeven?
A. 280
B. 250
C. 260
D. 270
View Answer:
833. The following data for year 2000 are available for Cagayan Automotive Company which manufactures and sells a
single automotive product line:
Unit selling price – P40.00
Unit variable cost – P20.00
Unit contribution margin – P20.00
Total fixed costs – P200,000.00
What is the breakeven point in units for the current year?

A. 10,000
B. 10,100
C. 10,050
D. 10,200
View Answer:
834. The cost of producing a small transistor radio set consists of P230.00 for labor and P370.00 for material. The fixed
charges is operating the plant is P1,000,000.00 per month. The variable cost is P10.00 per set. The radio set can be sold
for P750.00 each. Determine how many sets must be produced per month to breakeven.
A. 7,123
B. 7,133
C. 7,143
D. 7,153
View Answer:
835. An item which can be sold for P63.00 per unit wholesale is being produced with the following cost data:
Labor cost – P10.00 per unit
Material cost – P15.00 per unit

Fixed charges – P10,000.00
Variable cost – P8.00 per unit
What is the breakeven point sales volume if one out of every 10 units produced is defective and is rejected with only full
recovery on materials?
A. P25,011
B. P25,111
C. P25,121
D. P25,132
View Answer:
836. 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.
C. Declining balance method
D. SYD method
View Answer:
837. Which of the following depreciation methods cannot have a salvage value of zero?
A. Declining balance method
C. Straight line method
D. SYD method
View Answer:
838. A method of depreciation where a fixed sum of money is regularly deposited at compound interest in a real or
estimated life.
D. SYD method
View Answer:
839. The function of interest rate and time that determines the cumulative amount of a sinking fund resulting from
specific periodic deposits.
A. Sinking fund factor
B. Present worth factor

C. Capacity factor
D. Demand factor
View Answer:
840. The first cost of any property includes:
A. The original purchase price and freight and transportation charges
B. Installation expenses
C. Initial taxes and permits fee
D. All of these
View Answer:
841. In SYD method, the sum of years digit is calculated using which formula with n = number of useful years of the
equipment.
A. n(n – 1)/2
B. n(n + 1)/2
C. n(n+1)
D. n(n-1)
View Answer:
842. Capitalized cost of any property is equal to the:
A. Annual cost
B. First cost + Interest of the first cost
C. First cost + Cost of perpetual maintenance
D. First cost + Salvage value
View Answer:
843. The lessening of the value of an asset due to the decrease in the quantity available (referring to the natural
resources, coal, oil, etc).
A. Depreciation
B. Depletion
C. Inflation
D. Incremental cost
View Answer:
844. Is the simplest form of business organization.
B. Partnership
C. Enterprise
D. Corporation
View Answer:
845. An association of two or more persons for a purpose of engaging in a profitable business.
B. Enterprise
C. Partnership
D. Corporation
View Answer:
846. A distinct legal entity which can practically transact any business transaction which a real person could do.
B. Enterprise
C. Partnership
D. Corporation
View Answer:
847. Double taxation is a disadvantage of which business organization?
B. Partnership
C. Corporation
D. Enterprise
View Answer:
848. Which is NOT a type of business organization?
B. Corporation
C. Enterprise
D. Partnership
View Answer:
849. What is the minimum number of incorporators in order that a corporation be organized?
A. 3
B. 5
C. 10
D. 7
View Answer:
850. 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 pay the liabilities.
851. The method of depreciation where fixed sum of money is regularly deposited at compound interest in a real or
estimated life is known as;
A. straight line method
B. SYD method
D. Sinking fund method
View Answer:
852. The term used to express the series of uniform payments occurring at equal interval of time is;
A. compound interest
B. annuity
C. perpetuity
D. depreciation
View Answer:
contributors and claims of others based on profit is known as;
A. yield
B. earning value
C. economic return
D. expected yield
View Answer:
854. 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 irregular prearranged program is called
A. amortization
B. annuity
C. depreciation
D. capital recovery
View Answer:
855. Those funds that are required to make the enterprise or project going on.
A. banking
B. accumulated amount
C. working capital
D. principal or present worth
View Answer:
856. These are product or services that are desired by humans and will be purchased if money is available after the
required necessities have been obtained
A. utilities
B. necessities
C. luxuries
D. producer good and services
View Answer:
857. These are product or services that are required to support human life and activities, that will be purchased in
somewhat the same quantity even though the price varies considerably.
A. utilities
B. necessities
C. luxuries
D. producers goods and services
View Answer:
858. A condition where only a few individuals produce a certain product and that any action of one will lead to almost
the same action of the others.
A. oligopoly
B. semi-monopoly
C. monopoly
D. perfect competition
View Answer:
A. perfect competition
B. monopoly
C. oligopoly
D. elastic demand
View Answer:
860. It is the amount that 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
View Answer:
861. It is defined to be the capacity of a commodity to satisfy human want.
A. discount’
B. luxuries
C. utility
D. necessity
View Answer:
862. A form a summary of assets, liabilities and net worth;
A. balance method
B. break-even point
C. balance sheet
D. production
View Answer:
863. The worth of a property, which is equal to the original cost less depreciation, is known as;
A. earning value
B. scrap value
C. book value
D. face value
View Answer:
864. When using net present worth calculation to compare two projects, which of the following could invalidated the
calculations?
A. mutually exclusive projects
B. evaluation over different periods
C. non-conventional cash flows
D. difference in the magnitude of the projects

View Answer:
865. Which of the following is a form of business/company ownership?
A. partnership
B. corporation
C. single proprietorship
D. all of these
View Answer:
866. What must two investments with the same present worth and unequal lives have?
A. identical salvage value
B. different salvage value
C. identical equivalent uniform annual cash flows
D. different equivalent annual cash flows
View Answer:
867. What is the formula for a straight-line depreciation rate?
A. (100% – %net salvage value)/Estimated service life
B. %net salvage value/Estimated service life

C. 100%net salvage value/estimated service life
D. average net salvage value/estimated service life
View Answer:
868. The amount received from the sale of an additional unit of a product is termed as:
A. marginal cost
B. marginal utility
C. marginal unit
D. marginal revenue
View Answer:
869. An accounting book where the original record of all transaction is ordinarily recorded.
A. journal
B. credit entry
C. debit entry
D. transaction record
View Answer:
870. 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. sinking fund
C. annuity
D. capitalized cost
View Answer:
871. What is work-in-process classified as?
A. an asset
B. liability
C. an expense
D. owner’s equity
View Answer:
872. Which is a form of business/company ownership?
A. partnership
B. corporation
C. single proprietorship
D. all of the list
View Answer:
873. The decrease in value of a physical property due to the passage of time;
A. inflation
B. depletion
C. recession
D. depreciation
View Answer:
874. We may classify an interest rate, which specifies the actual rate an interest on the principal for one year as:
A. Nominal rate
B. Rate of return
C. Exact interest rate
D. Effective rate
View Answer:
875. This law states that “When the use of one of the factors of production is limited, either in increasing cost or by
absolute quantity, a point will be reached beyond which an increase in the variable factors will result in less than
proportionate increase in output.”
A. Law of Supply and Demand
B. Law of Diminishing Return
C. Law of Gravity
D. Law of diminishing Utility
View Answer:
876. The difference between the present worth and the worth at some future time is:
A. Discount
B. Profit
C. Credit
D. Debit
View Answer:
877. The act of charging two or more buyers or sellers different prices for the same product where the elasticities of
supply or demand at each price level differ among market is known as:
A. Price optimization
B. Price discrimination
C. Price manipulation
D. Price war
View Answer:
878. A formal organization of producers within an industry forming a perfect collision purposely formed to increase
profit and block newcomers from the industry, is termed as;
A. Oligopoly
B. Monopoly
C. Corporation
D. Cartel
View Answer:
879. A situation in which rival firms drive prices down through attempts to undercut each other’s price is called;
A. Price war
B. Price discrimination price
C. Price Leadership
D. Oligopolistic monopoly
View Answer:
880. The price that the quantity per unit time that the buyers want to buy is just equal to the quantity the sellers want to
sell is called;
A. Break-even price
B. Equilibrium price
C. Minimum price
D. Maximum price
View Answer:
881. The length of time during which a property is capable of performing the function for which it was designed and
manufactured is termed as;
A. economic life
B. Life span
C. Eternal life
D. Physical life
View Answer:
882. It is a distinct legal entity, separate from individuals who own it and which can engage in practically any business
transaction which real person can do.
A. Partnership
B. Single proprietorship
C. Eternal Life
D. Physical life
View Answer:
883. A market whereby there is only one buyer of an item for which there are no goods substitute.
A. Monopoly
B. Oligopoly
C. Oligopsony
D. Monopsony
View Answer:
884. This form of business ownership is a legal entity possessing many of the legal powers of individuals. It can hold title
to property, sue and be sued in its own name. It is called:
A. corporation
B. company
C. general partnership
D. individual proprietorship
View Answer:
885. The balance sheet is a statement showing the financial status of the company at any given time. Which of the
statements is not a part of the balance sheet.
A. liabilities
B. assets
C. cost of goods sold
D. net worth
View Answer:
886. Refers to cost of merchandise which excludes freight and insurance cost;
A. freight-on-board
B. sunk cost
C. debentures
D. book value
View Answer:
887. A fund into which annual deposits of A are made in order to accumulate fund F at n years in the future.
A. Amortization
B. Annuity
C. Depreciation
D. Sinking fund
View Answer:
888. Cash money credit necessary to establish and operate an enterprise.
A. funds
B. capital
C. liabilities
D. assets
View Answer:
889. The worth of property which is equal to the original cost less depreciation;
A. scrap value
B. earning value
C. book value
D. face value
View Answer:
890. Intangible assets of a corporation or company
A. dacion-en-pago
B. investment
C. patents
D. equity
View Answer:
891. Additional information to prospective bidders on contract documents issued to bidding date;
A. escalatory clause
B. delicts
C. technological assessments
D. bid bulletin
View Answer:
892. A civil wrong committed by one person causing damage to another person or his property or reputation;
A. tort
B. negligence
C. material breach
D. fraud
View Answer:
893. What is an annuity?
A. A series of equal payments at equal time periods.
B. The cost of manufacturing a product
C. An investment that yields an equal amount of interest each year
D. The overhead cost per unit of production
View Answer:
894. Consist of the actual counting or determination of the actual quantity of the materials on hands as of a given date;
B. Technological assessment
C. Material update
D. Material count
View Answer:
895. An artificial expense that spreads the purchase price of an assets or other property over a number of years
A. Depreciation amnesty
B. Sinking fund
C. Bond
D. None of these
View Answer:
896. Estimated value at the end of the useful life;
A. salvage value
B. economic life
C. balance sheet
D. compounded annually
View Answer:
897. The recorded current value of an asset is known as:
A. scrap value
B. book value
C. salvage value
D. present worth
View Answer:
898. The ratio of the interest payment to the principal for a given unit of time and is usually expressed as percentage of
the principal is known as:
A. investment
B. nominal interest
C. interest
D. interest rate
View Answer:
899. A method of depreciation whereby the amount to recover is spread over the estimated life of the asset in terms of
the periods or units of output is called
A. SOYD method
B. Declining balance method
C. Straight line method
D. Sinking fund method

View Answer:
900. The interest rate at which the present worth of cash flow of project is zero, or the interest earned by an
investment.
A. Rate of return
B. Effective rate
C. Nominal rate
D. Yield
901. It is the amount of money earned by given capital.
A. Interest
B. Annuity
C. Cash flow
D. None of these
View Answer:
902. Which of the following is a type of simple interest;
A. Ordinary
B. Exact
C. Both A and B
D. None of these
View Answer:
903. The interest earned by the principal competed at the end of the investment period, it varies directly with time.
A. Compound interest
B. Simple interest
C. Annuity
D. Perpetuity
View Answer:
904. The interest is completed every end of each interest period and the interest earned for the period is added to the
principal.
A. Compound interest
B. Simple interest
C. Annuity
D. Perpetuity
View Answer:
905. It is rate quoted in describing a given variety of compound interest.

A. nominal rate
B. effective rate
C. simple rate
D. compound rate
View Answer:
906. It is the actual interest earned in one year period.
A. Nominal rate
B. Effective rate
C. Simple rate
D. Compound rate
View Answer:
907. A series of uniform payments made at equal intervals of time.
A. perpetuity
B. interest
C. rate
D. annuity
View Answer:
908. Which of the following is type of annuity.
A. Ordinary
B. Deferred
C. Annuity due
D. All of these
View Answer:
909. An annuity where the payments periods extend forever or the periodic payments continue indefinitely.
A. Perpetuity
B. Interest
C. Rate
D. Annuity
View Answer:
910. The payment is made at the end of each period starting from the first period.
A. Ordinary annuity
B. Deferred annuity
C. Annuity due
D. All of these
View Answer:
911. The first payment is deferred a certain number of periods after the first.
A. Ordinary annuity
B. Deferred annuity
C. Annuity due
D. None of these
View Answer:
912. The payment is made at the beginning of each period starting from the first period.
A. Ordinary annuity
B. Deferred annuity
C. Annuity due
D. None of the due
View Answer:
913. It is an application of perpetuity.
A. Capitalized cost
B. Machine cost
C. Manpower cost
D. Equipment cost
View Answer:
914. It refers to the decrease in the value of an asset due to usage of passage of time.
A. Interest
B. Annuity
C. Depreciation
D. Perpetuity
View Answer:
915. Which of the following is the method of computing depreciation

A. Straight line depreciation
C. Sum of the years method
D. All of these.
View Answer:
916. The most common method used in computing depreciation;
C. Sum of the years digit method
View Answer:
917. 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.
C. Sum of the year’s digit method

View Answer:
918. It is invested yearly at a rate of I to amount to (FC –SV) at the end of the life to the property.
C. Sum of the years digit method
View Answer:
919. A written contract to pay a certain redemption value on a specified redemption date and to pay equal dividends
periodically.
A. Bond
B. Capital
C. Interest
D. Annuity
View Answer:
920. A method of determining when cost exactly equal to revenue.
A. Experimental method
B. Break-even method
C. Break-add method
D. None of these
View Answer:
921. Find the interest on P6,800.00 for 3 years at 11% simple interest.
A. P 1,875.00
B. P 1,987.00
C. P 2,144.00
D. P 2,244.00
View Answer:
922. A man borrowed P10,000.00 from his friend and agrees to pay at the end of 90 days under 8% simple interest rate.
What is the required amount?
A. P 10,200.00
B. P 11,500.00
C. P 9,500.00
D. P 10,700.00
View Answer:
923. Annie buys a television set from a merchant who offers P25,000.00 at the end of 60 days. Annie wished to pay
immediately and the merchant offers to compute the required amount on the assumption that the money is worth 14%
simple interest. What is the required amount?
A. P 20,234.87
B. P 19,222.67
C. P 24,429.97
D. P 28,456.23
View Answer:
924. What is the principal amount if the amount of interest at the end of 2 1/2 year is P4,500.00 for a simple interest of
6% per annum?
A. P 35,000.00
B. P 30,000.00
C. P 40,000.00
D. P 45,000.00
View Answer:
925. How long must a P40,000 note bearing 4% simple interest run to amount to P41,350.00?
A. 340days
B. 403 days
C. 304 days
D. 430 days
View Answer:
926. If P16,000 earns P480 in 9 months, what is the annual rate of interest?
A. 1%
B. 2%
C. 3%
D. 4%
View Answer:
927. A man lends P6,000 at 6% simple interest for 4 years. At the end of this time he invest the entire amount (principal
plus interest) at 5% compounded annually for 12 years. How much will he have at the end of the 16-year period.?
A. P 13,361.20
B. P 13,633.20
C. P 13,333.20
D. P 16,323.20
View Answer:
928. A time deposit of P110,000 for 31 days earns P890.39 on maturity date after deducting the 20% withholding tax on
interest income. Find interest per annum.
A. 12.5%
B. 11.95%
C. 12.25%
D. 11.75%
View Answer:
929. A bank charges 12% simple interest on a P300.00 loan. How much will be repaid if the loan is paid back in one lump
sum after three years.
A. P 408.00
B. P 551.00
C. P415.00
D. P450.00
View Answer:
930. A tag price of a certain commodity is for 100 days. If paid in 31 days, there is 3% discount. What is the simple
interest paid?
A. 12.5%
B. 6.25%
C. 22.32%
D. 16.14%
View Answer:
931. Accumulate P5,000.00 for 10 years at 8% compounded quarterly.
A. P 12,456.20
B. P 13,876.50
C. P 10,345.80
D. P 11,040.20
View Answer:
932. Accumulate P5,000.00 for 10 years at 8% compounded semi-annually.
A. P 10,955.61
B. P 10,233.67
C. P 9,455.67
D. P 11,876.34
View Answer:
933. Accumulate P5,000.00 for 10 years at 8% compounded monthly
A. P 15,456.75
B. P 11,102.61
C. P 10,955.61
D. P 10,955.61
View Answer:
934. Accumulate P5,000.00 for 10 years at 8% compounded annually.
A. P 10,794.62
B. P 8,567.97
C. P 10,987.90
D. P 7,876.87
View Answer:
935. How long it will take P1,000 to amount to P1,346 if invested at 6% compounded quarterly.
A. 3 years
B. 4 years
C. 5 years
D. 6 years
View Answer:
936. How long will it take for an investment to double its amount if invested at an interest rate of 6% compounded bi-
monthly
A. 10 years
B. 12 years
C. 13 years
D. 14 years
View Answer:
937. If the compound interest on P3,000.00 in years is P500.00 then the compound interest on P3,000.00 in 4 years is:
A. P 956.00
B. P 1,083.00
C. P 1,125.00
D. P 1,526.00
View Answer:
938. The salary of Mr. Cruz is increased by 30% every 2 years beginning January 1, 1982. Counting from that date, at
what year will his salary just exceed twice his original salary?
A. 1988
B. 1989
C. 1990
D. 1991
View Answer:
939. If you borrowed P10,000 from the bank with 18% interest per annum, what is the total amount to be repaid at the
end of one year.
A. P 11,800.00
B. P 19,000.00
C. P 28,000.00
D. P 10,180.00
View Answer:
940. What is the effective rate for an interest rate at 12% compounded continuously?
A. 12.01%
B. 12.89%
C. 12.42%
D. 12.75%
View Answer:
941. How long it will take for an investment to fivefold its amount if money is worth 14% compounded semiannually.
A. 11
B. 12
C. 13
D. 14
View Answer:
942. An interest of 8% compounded semiannually is how many percent if compounded quarterly?
A. 7.81%
B. 7.85%
C. 7.92%
D. 8.01%
View Answer:
943. A man is expecting to receive P450,000.00 at the end of 7 years. If money is worth 14% compounded quarterly how
much is it worth at present?
A. P 125,458.36
B. P 147,456.36
C. P 162,455.63
D. P 171,744.44
View Answer:
944. A man has a will of P650,000.00 from his father. If his father deposited an amount of P450,000 in a trust fund
earning 8% compounded annually, after how many years will he man receive his will?
A. 4.55 years
B. 4.77 years
C. 5.11 years
D. 5.33 years
View Answer:
945. Mr. Adam deposited P120,000.00 in a bank who offers 8% interest compounded quarterly. If the interest is subject
to a 14% tax, how much will he receive after 5 years?
A. P 178,313.69
B. P 153,349.77
C. P 170,149.77
D. P 175,343.77
View Answer:
946. What interest compounded monthly is equivalent to an interest rate of 14% compounded quarterly
A. 1.15%
B. 13.84%
C. 10.03%
D. 11.52%
View Answer:
947. What is the worth of two P100,000 payments at the end of the third and the fourth year? The annual interest rate
is 8%.
A. P 152.87
B. P 112.34
C. P 187.98
D. P 176.67
View Answer:
948. A firm borrows P2,000.00 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 5,679.67
B. P 6,789.98
C. P 6,034.66
D. P 5,888.77
View Answer:
949. At an annual rate of return of 8%, what is the future worth of P1,000 at the end of 4 years?
A. P 1,388.90
B. P 1,234.56
C. P 1,765.56
D. P 1,360.50
View Answer:
950. A student has money given by his grandfather in the amount of P20,000.00. How much money in the form of
interest will he get if the money is put in a bank that offers 8% rate compounded annually at the end of 7 years?
A. P 34,276.48
B. P 34,270.00
C. P 36,276.40
D. P 34,266.68
A. P4,133.33
B. P4,333.33
C. P4,166.67
D. P4,150.00
View Answer:
952. A deposit of P110,000.00 was made for 31 days. The net interest after deducting 20% withholding tax is P890.36.
Find the rate of return annually.
A. 11.95%
B. 12.75%
C. 11.75%
D. 12.25%
View Answer:
Corporation with an interest of 6% for 180 days on the principal collected in advance. The corporation would accept a
promissory note for P20,000 non-interest for 180 days. If discounted at once, find the proceeds of the note.
A. P18,600
B. P18,800
C. P19,000
D. P19,200
View Answer:
954.What will be the future worth of money after 12 months, if the sum of P25,000 is invested today at simple interest
rate of 1% per month?
A. P30,000
B. P29,000
C. P28,000
D. P27,859
View Answer:
A. P46,200
B. P44,893
C. P46,730
D. P45,789
View Answer:
956. Annie buys a television set from a merchant who ask P1,250 at the end of 60 days. Annie wishes to pay immediately
and the merchant offers to compute the cash price on the assumption that money is worth 8% simple interest. What is
the cash price?
A. P1,233.55
B. P1,244.68
C. P1,323.66
D. P1,392.67
View Answer:
957. It is the practice of almost all banks in the Philippines that when they grant a loan. The interest for one year is
automatically deducted from the principal amount upon the release of money to a borrower. Let us therefore assume
that you applied for a loan with a bank and the P80,000 was approved at an interest rate of 14% of which P11,200 was
A. 15.90%
B. 16.28%
C. 16.30%
D. 16.20%
View Answer:
958. A man borrowed P20,000 from a local commercial bank which has a simple interest rate of 16% but the interest is
to be deducted from the loan at the time that the money was borrowed and the loan is payable at the end of one year.
How much is the actual rate of interest?
A. 12%
B. 14%
C. 10%
D. 19%
View Answer:
959. A bank charges 12% simple interest on a P300.00 loan. How much will be repaid if the loan is paid back in one lump
sum after three years?
A. P408.00
B. P415.00
C. P551.00
D. P450.00
View Answer:
960. A man borrowed P100,000 at the interest rate of 12% per annum, compounded quarterly. What is the effective
rate?
A. 3%
B. 13.2%
C. 12%
D. 12.55%
View Answer:
961. What is the corresponding effective rate of 18% compounded semi-quarterly?
A. 19.25%
B. 19.48%
C. 18.46%
D. 18.95%
View Answer:
A. Daily
B. Monthly
C. Bi-Monthly
D. Quarterly
View Answer:
963. A bank pays one percent interest on savings accounts four times a year. The effective annual interest rate is
A. 4.06%
B. 1.00%
C. 2.04%
D. 3.36%
View Answer:
964. The effective rate of 14% compounded semi-annually is
A. 14.49%
B. 12.36%
C. 14.94%
D. 14.88%
View Answer:
965. An interest rate is quoted as being 7.5% compounded quarterly. What is the effective annual interest rate?
A. 7.71%
B. 7.22%
C. 15.78%
D. 21.81%
View Answer:
966. The amount of P12,800 in 4 years at 5% compounded quarterly is
A. P14,785.34
B. P15,614.59
C. P16,311.26
D. P15,847.33
View Answer:
967. Find the present worth of a future payment of P100,000 to be made in 10years with an interest of 12%
A. P30,444.44
B. P33,000.00
C. P30,655.68
D. P30,546.01
View Answer:
968. On his 6th birthday a boy is left an inheritance. The inheritance will be paid in a lump sum of P10,000 on his 21st
birthday. What is the present value of the inheritance as of the boy’s 6th birthday, if the interest is compounded
annually? Assume i = 4%
A. P6,500
B. P8,600
C. P5,500
D. P7,500
View Answer:
969. The amount of P50,000 was deposited in the bank earning at interest of 7.6% per annum. Determine the total
amount at the end of 5 years, if the principal and interest were not withdrawn during the period?
A. P71,781.47
B. P72,475.23
C. P70,374.90
D. P78,536.34
View Answer:
970. Alexander Michael owes P25,000.00 due in 1 year and P75,000 due in 4 years. He agrees to pay P50,000 today and
the balance in 2 years. How much must he pay at the end of two years if money is worth 5% compounded semi-
annually?
A. P38,025.28
B. P35,021.25
C. P30,500.55
D. P39,021.28
View Answer:
971. At an interest rate of 10% compounded annually, how much will a deposit of P1,500 be in 15 years?
A. P6,100.00
B. P6,234.09
C. P 6,265.87
D. P6,437.90
View Answer:
972. How long (in years) will it take money to quadruple if it earns 7% compounded semi-annually?
A. 20.15
B. 26.30
C. 33.15
D. 40.30
View Answer:
973. In how many year is required for P2,000 to increase by P3,000 if interest at 12% compounded semi-annually?
A. 8
B. 9
C. 10
D. 7
View Answer:
974. Consider a deposit of P600.00 to be paid back in one year by P700.00. What are the conditions on the rate of
interest, i% per year compounded annually such that the net present worth of the investment is positive? Assume i is
greater than or equal to 0.
A. 0 ≤ i < 14.3%
B. 0 ≤ i < 16.7%
C. 12.5% ≤ i < 14.3%
D. 16.7% ≤ i < 100%
View Answer:
975. A company invests P10,000 today to be repaid in 5 year in one lump sum at 12% compounded annually. How much
profit in present day pesos is realized?
A. P7,632
B. P7,236
C. P7,326
D. P7,362
View Answer:
976. 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
A. P5,355.00
B. P5,892.00
C. P6,035.00
D. P6,135.00
View Answer:
977. A deposit of P1,000 is made in a bank account that pays 8% interest compounded annually. Approximately how
much money will be in the account after 10 years?
A. P1,925.00
B. P1,860.00
C. P2,345.00
D. P2,160.00
View Answer:
978. P200,000 was deposited on January 1, 1988 at an interest rate of 24% compounded semi-annually. How much
would the sum be on January 1,1993?
A. P401,170
B. P421,170
C. P521,170
D. P621,170
View Answer:
years and 9 months.
A. P660,550
B. P670,650
C. P680,750
D. P690,850
View Answer:
980. Fifteen years ago P1,000.00 was deposited in a bank account, and today it is worth P2,370.00. The bank pays
interest semi-annually. What was the interest rate paid in this account?
A. 3.8%
B. 4.9%
C. 5.0%
D. 5.8%
View Answer:
981. If P5,000.00 shall accumulate for 10 years at 8% compounded quarterly, find the compounded interest at the end
of 10 years.
A. P6,005.30
B. P6,000.00
C. P6,040.20
D. P6,010.20
View Answer:
the end of the 16th year?
A. P706.00
B. P500.00
C. P774.00
D. P799.00
View Answer:
983. P1,500.00 was deposited in a bank account, 20 years ago. Today it is worth P3,000.00. Interest is paid semi-
annually. Determine the interest rate paid on this account.
A. 3%
B. 2.9%
C. 3.5%
D. 4%
View Answer:
984. A merchant puts in his P2,000.00 to a small business for a period of six years. With a given interest rate on the
investment of 15 % per year, compounded annually, how much will he collect at the end of the sixth year?
A. P4,400.00
B. P4,390.15
C. P4,200.00
D. P4,626.00
View Answer:
A. P13,859.12
B. P13,958.33
C. P13,675.23
D. P13,265.83
View Answer:
986. P500,000 was deposited 20.15 years ago at an interest rate of 7% compounded semi-annually. How much is the
sum now?
A. P2,000,000
B. P2,000,150
C. P2,000,300
D. P2,000,500
View Answer:
6%. How much, in terms of year zero pesos will be in the account at maturity?
A. P12,020
B. P13,030
C. P14,040
D. P15,030
View Answer:
to P50,000. When will the girl receive the money if the fund is invested at 8% compounded quarterly?
A. 7.98 years
B. 10.34 years
C. 11.57 years
D. 10.45 years
View Answer:
a bank at a rate of 18% per year. Compare how much money you will save or lose on the transaction.
A. You will pay P155.00 more if you borrowed from the bank.
B. You will save P55.00 by borrowing from your friend.
C. You will pay P85.00 more if you borrowed from the bank
D. You will pay P55.00 less if you borrowed from the bank.
View Answer:
990. What is the present worth of two P100 payments at the end of the third year and fourth year? The annual interest
rate is 8%.
A. P153
B. P160
C. P162
D. P127
View Answer:
991. Anne purchased on monthly installment a P100,000 worth of land. The interest rate is 12% nominal and payable in
20 years. What is the monthly amortization?
A. P1,101.08
B. P1,121.01
C. P1,152.15
D. P1,128.12
View Answer:
992. Money borrowed today is to be paid in 6 equal payments at the end of 6 quarters. If the interest is 12%
compounded quarterly. How much was initially borrowed if quarterly payment is P2,000.00?
A. P10,834.38
B. P10,382.90
C. P10,586.99
D. P10,200.56
View Answer:
993. You need P4,000 per year for four years to go to college. Your father invested P5,000 in 7% account for your
education when you were born. If you withdraw P4,000 at the end of your 17th, 18th, 19th and 20th birthday, how
much will be left in the account at the end of the 21st year?
A. P1,700
B. P2,500
C. P3,400
D. P4,000
View Answer:
994. What is the accumulated amount of five year annuity paying P6,000 at the end of each year, with interest at 15%
A. P40,454.29
B. P41,114.29
C. P41,454.29
D. P40,544.29
View Answer:
995. How much must be deposited at 6% each year beginning on January 1, year 1, in order to accumulate P5,000 on the
date of the last deposit, January 1, year 6?
A. P751.00
B. P717.00
C. P715.00
D. P725.00
View Answer:
996. A debt of P10,000 with 10% interest compounded semi-annually is to be amortized by semi-annual payment over
the next 5 years. The first due is in 6 months. Determine the semi-annual payment.
A. P1,200.00
B. P1,295.05
C. P1,193.90
D. P1,400.45
View Answer:
997. A young engineer borrowed P10,000 at 12% interest and paid P2,000 per annum for the last 4 years. What does he
A. P6,919.28
B. P5,674.00
C. P6,074.00
D. P3,296.00
View Answer:
998. Mr. Cruz plans to deposit for the education of his 5 years old son, P500 at the of end each month for 10 years at
12% annual interest compounded monthly. The amount that will be available in two years is
A. P13,000
B. P14,500
C. P13,500
D. P14,000
View Answer:
999. If you obtain a loan of P1M at the rate of 12% compounded annually in order to build a house, how much must you
pay monthly to amortize the loan within a period of ten years?
A. P13,994.17
B. P12,955.21
C. P15,855.45
D. P12,900.25
View Answer:
1000. How much must you invest today in order to withdraw P2,000 annually for 10 years if the interest rate is 9%?
A. P12,853.32
B. P12,881.37
C. P12,385. 32
D. P12,835.32
1001. A person buys a piece of lot for P100,00 down payment and 10 deferred semi-annual payments of P8,000 each,
semi-annually?
1002. A man loans P187,400 from a bank with interest at 5% compounded annually. He agrees to pay his obligations by
1003. A housewife bought a brand new washing machine costing P12,000 if paid in cash. However, she can purchase it
on installment basis to be paid within 5 years. If money is worth 8% compounded annually, what is her yearly
amortization if all payments are to be made at the beginning of each year?
1004. Mr. Ayala 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 Mr. Ayala pay each month?
1005. A house and lot can be acquired by a down payment of P500,000 and a yearly payment of P100,000 at the end of
each year for a period of 10 years, starting at the end of 5 years from the date of purchase. If money is worth 14%
compounded annually, what is the cash price of the property?
1006. A piece of machinery can be bought for P10,000 cash or for P2,000 down and payments of P750 per year for 15
years. What is the annual interest rate for the time payments?
1007. A man inherited a regular endowment of P100,000 every end of 3 months for 10 years. However, he may choose
to get a single lump sum payment at the end of 4 years. How much is this lump sum if the cost of money is 14%
1008. A parent on the day the child is born wishes to determine what lump sum would have to be paid into an account
bearing interest at 5% compounded annually, in order to withdraw P20,000 each on the child’s 18th,19th,20th and 21st
birthdays. How much is the lump sum amount?
1009. An instructor plans to retire in exactly one year and want an account that will pay him P25,000 a year for the next
15 years. Assuming a 6% annual effective interest rate, what is the amount he would need to deposit now? (the fund will
be depleted after 15 years).
1010. An investment of P350,000 is made to be followed by payments of P200,000 each year for 3 years. What is the
annual rate of return on investment for the project?
1011. A small machine has an initial cost of P20,000, a salvage value of P2,000 and a life of 10 years. If your cost of
operation per year is P3,500 and your revenues per year is P9,000, what is the approximate rate of return on the
investment?
installments for ‘x’ years at an interest rate of 15% compounded monthly. If the monthly installment was P42,821.87,
find the value of x?
1013. A manufacturing firm wishes to give each 80 employees a holiday bonus. How much is need to invest monthly for
a year at 12% nominal interest rate compounded monthly, so that each employee will receive a P2,000 bonus?
1014. Find the present value in pesos, of a perpetuity of P15,000 payable semi-annually if money is worth 8%
1015. A fund donated by a wealthy person to IIEE to provide annual scholarships to deserving EE students. The fund will
grant P5,000 for each of the first five years, P8,000 for the next 5 years and P10,000 for each year thereafter. The
scholarship will start one year after the fund is established, if the fund earns 8% interest, what is the amount of the
donation?
1016. A company issued 50 bonds of P1,000.00 face value each, redeemable at par at the end of 15 years to accumulate
the funds required for redemption. The firm established a sinking fund consisting of annual deposits, the interest rate of
depreciation rate by straight-line method.
1018. A machine has an initial cost of P50,000 and a salvage value of P10,000 after 10 years. Find the book value after 5
years using straight-line method.
1019. The initial cost of a paint sand mill, including its installation, is P800,000. The BIR approved life of this machine is
10 years for depreciation. The estimated salvage value of the mill is P50,000 and the cost of dismantling is estimated to
be P15,000. Using straight-line depreciation, what is the annual depreciation charge and what is the book value of the
machine at the end of six years?
equipment at the end of 5 years, determine the book value at the end of the fourth year. Use straight-line method.
1021. An asset is purchased for P500,000.00. The salvage value in 25 years is P100,000.00. What is the total depreciation
in the first three years using straight-line method?
1022. A machine has an initial cost of P50,000 and a salvage value of P10,000.00 after 10 years. What is the block value
after 5 years using straight line depreciation?
cost by sinking fund method at 4% interest.
1024. A machine costing P720,000 is estimated to have a book value of P40,545.73 when retired at the end of 10 years.
depreciation in %?
1025. A machine costing P45,000 is estimated to have a book value of P4,350 when retired at the end of 6 years.
Depreciation cost is computed using a constant percentage of declining book value. What is the annual rate of
depreciation in %?
1027. A company purchases an asset for P10,000.00 and plans to keep it for 20 years. If the salvage value is zero at the
end of 20th year, what is the depreciation in the third year? Use SYD method.
1028. A telephone company purchased a microwave radio equipment for P6 million, freight and installation charges
amounted to 4% of the purchased price. If the equipment will be depreciated over a period of 10 years with a salvage
value of 8%, determine the depreciation cost during the 5th year using SYD.
book value during the first year if sum-of-years digit(SYD) depreciation is used.
1030. The maintenance cost for a sewing machine this year is expected to be P500. The cost will increase P50 each year
for the subsequent 9 years. The interest is 8% compounded annually. What is the approximate present worth of
maintenance for the machine over the full 10-year period?
1031. At 6%, find the capitalized cost of a bridge whose cost is P250 M and life is 20 years, if the bridge must be partially
rebuilt at a cost of P100 M at the end of each 20 years.
1032. A corporation uses a type of motor truck which costs P5,000 with life of 2 years and final salvage value of P800.
How much could the corporation afford to pay for another type of truck of the same purpose whose life is 3 years with a
final salvage value of P1,000. Money is worth 4%.
1033. A company must relocate one of its factories in three years. Equipment for the loading dock is being considered
for purchase. The original cost is P20,000, the salvage value of the equipment after three years is P8,0000. The
company’s rate of return on the money is 10%. Determine the capital recovery rate per year.
1034.The annual maintenance cost of a machine shop is P69,994. If the cost of making a forging is P56 per unit and its
selling price is P135 per forged unit, find the number of units to be forged to break-even.
1035. A manufacturer produces certain items at a labor cost of P115 each, material cost of P76 each and a variable cost
of P2.32 each. If the item has a unit price of P600, how many number of units must be manufactured each month for the
manufacturer to break even if the monthly overhead is P428,000?
1036. Steel drum manufacturer incurs a yearly fixed operating cost of $200,000. Each drum manufactured cost $160 to
produce and sells $200. What is the manufacturer’s break-even sales volume in drums per year?
1037. JRT Industries manufactures automatic voltage regulator at a labor cost of P85.00 per unit and material cost of
P350.00 per unit. The fixed charges on the business are P15,000 per month and the variable costs are P20.00 per unit. If
the automatic voltage regulators are sold to retailers at P580.00 each, how many units must be produced and sold per
month to breakeven?
1038. Compute for the number of locks that an ice plant must be able to sell per month to break even based on the
following data:
Cost of electricity per block – P20.00
Tax to be paid per block – P2.00
Real estate Tax – P3,500.00 per month
Salaries and Wages – P25,000.00 per month
Others – P12,000.00 per month
Selling price of ice – P55.00 per block

1039. The annual maintenance cost of a machine is P70,000. If the cost of making a forging is P56 and its selling price is
P125 per forged unit. Find the number of units to be forged to break even.
1040. XYZ Corporation manufactures bookcases that sell for P65.00 each. It costs XYZ Corporation P35,000 per year to
operate its plant. This sum includes rent, depreciation charges on equipment, and salary payments. If the cost to
produce one bookcase is P50.00, how many cases must be sold each year for XYZ to avoid taking a loss?
costs are P150.00 per motor. The average selling price of the motors is P275.00. Fixed costs of the company amount to
P20,000 per month which includes taxes. The number of motors that must be sold each month to break even is closest
to:
1042. A price tag of P1200 is specified if paid within 60 days but offers 3% discount for cash in 30 days. Find the rate of
interest.
1043. Mr. Almagro made a money market of P1 000 000 for 30 days at 7.5% per year. If the withholding tax is 20%, what
is the net interest that he will receive at the end of the month?
1044. A deposit of P110 000 was made for 31 days. The net interest after deducting 20% withholding tax is P890.36. Find
P10 000 after 10 years?
1046. A man expects to receive P25 000 in 8 years. How much is that worth now considering interest at 8% compounded
quarterly?
1047. P200 000 was deposited for a period of 4 years and 6 months and bears on interest of P85 649.25. What is the
rate of interest if it is compounded quarterly?
1048. Find the time required for a sum of money to triple itself at 5% per annum compounded continuously?
1049. If the nominal interest is 12% compounded continuously, compute the effective rate of annual interest.
1050. If a sum of money triples in a certain period of time at a given rate of interest, compute the value of the single
1051. A price tag of P1200 is specified if paid within 60 days but offers a 3% discount for cash in 30 days. Find the rate of
interest.
1052. It is the practice of almost all bank in the Philippines that when they grant a loan, the interest for 1 year is
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
1053. 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 “Banker’s Discount”.
1054. A man borrowed from the bank under a promissory note that he signed in the amount of P25000.00 for a period
of 1 year. 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?
Corporation with an interest at 6% for 180days on the principal collected in advance. The corporation would accept a
promissory note for P20,000 non-interest for 180days. If discounted at once, find the proceeds in the note.
1056. P4000 is borrowed for 75 days at 16% per annum simple interest. How much will be due at the end of 75 days?
1057. Mr. Almagro 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. Almagro will receive at the end of the month?
a. P3,000
b. P4,000
c. P6,000
d. P5,000
View Answer:
1058. A bill for motorboat specifies the cost as P1,200 due at the end of 100 days 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. 19.6%
c. 20.9%
d. 21.4%
View Answer:
1059. In buying a computer disk, the buyer was offered the options of paying P250 cash at the end of 30 days or P270 at
the end of 120 days. At what rate is the buyer paying simple interest if he agree to pay at the end of 120days?
a. 32%
b.40%
c. 28%
d. 25%
View Answer:
1060. On March 1, 1996 Mr. Almagro obtains a loan of P1500 from Mr. Abella and signs a note promising to pay the
principal and accumulated simple interest at the rate of 5% at the end of 120 days. On May 15, 1996, Mr. Abella
discounts the note at the bank whose discount rate is 6%. What does he receive?
a. P2,201.48
b. P1,123.29
c. P1,513.56
d. P938.20
View Answer:
1061. A deposit of P110,000 was made for 31 days. The net interest after deducting 20% withholding tax is P890.36. Find
a. 12.25
b. 11.75
c. 12.75
d. 11.95
View Answer:
a. P46,200
b. P44,893
c. P46,729
d. P45,789
View Answer:
1063. 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?
a. 4% ; 4.17%
b. 3% ; 3.17%
c. 4% ; 4.71%
d. 3% ; 3.71%
View Answer:
1064. 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.
a. 64.6%
b. 65.6%
c. 66.6%
d. 67.6%
View Answer:
1065. A man is required to pay P200 at the end of 160 days or P190 at the end of 40 days. Determine the rate of
interest.
a. 18.4%
b. 19.6%
c. 15.8%
d. 16.4%
View Answer:
1066. Compute the discount if P2000 is discounted for 6 months at 8% simple interest.
a. P29.67
b. P67.29
c. P76.92
d. P92.76
View Answer:
1067. The amount of P12,800 in 4years at 5% compounded quarterly is _____.

a. P14,785.34
b. P15,614.59
c. P16,311.26
d. P15,847.33
View Answer:
1068. 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
b. P1340.38
c. P1102.37
d. P1030.28
View Answer:
a. P13,610.10
b. P13,500.10
c. P13,498.60
d. P13,439.16
View Answer:
1070. 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 the girl receive the money of the fund is invested at 8% compounded quarterly?
a. 7.98 years
b. 10.34 years
c. 11.57 years
d. 10.45 years
View Answer:
1071. 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. P13,958.33
c. P13,675.23
d. P13,265.83
View Answer:
1072. P500,000 was deposited at an interest of 6% compounded quarterly. Compute the compound interest after 4
years and 9 months.
a. P163,475.37
b. P178,362.37
c. P158,270.37
d. P183,327.37
View Answer:
1073. If the nominal interest rate is 3%, how much is P5000 worth in 10 years in a continuously compounded account?
a. P5750
b. P6750
c. P7500
d. P6350
View Answer:
1074. 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?
a. 8%
b. 6%
c. 7%
d. 5%
View Answer:
1075. 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. 4.55 years
c. 5.86 years
d. 2.11 years
View Answer:
1076. 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. P180,000
c. P240,000
d. P260,000
View Answer:
When compounded Bi-monthly, P15000 becomes P22,318.30 after 5 years.
1077. What is the nominal rate of interest?
a. 7%
b. 8%
c. 9%
d. 10%
View Answer:
1078. What is the equivalent rate if it is compounded quarterly?
a. 7.03%
b. 8.03%
c. 9.03%
d. 10.03%
View Answer:
1079. What is the effective rate if it is compounded quarterly?
a. 7.28%
b. 8.28%
c. 9.28%
d. 10.28%
View Answer:
1080. How will it take a money to double itself if invested at 5% compounded annually?
a. 12.2 years
b. 13.2 years
c. 14.2 years
d. 15.2 years
View Answer:
1081. Compute the effective annual interest rate which is equivalent to 5% nominal annual interest compounded
continuously.
a. 5.13%
b. 4.94%
c. 5.26%
d. 4.90%
View Answer:
1082. Find the time required for a sum of money to triple itself at 5% per annum compounded continuously.
a. 21.97 years
b. 25.34 years
c. 18.23 years
d. 23.36 years
View Answer:
1083. 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. P36,421.44
c. P28,864.36
d. P30,468.42
View Answer:
1084. If the effective annual interest rate is 4%, compute the equivalent nominal annual interest compounded
continuously.
a. 3.80%
b. 4.10%
c. 3.92%
d. 4.09%
View Answer:
1085. 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. 4%
c. 5%
d. 6%
View Answer:
1086. 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. 20.25%
c. 21.20%
d. 19.90%
View Answer:
1087. If the nominal interest is 12% compounded continuously, compute the effective annual rate if interest.
a. 12.40%
b. 11.26%
c. 12.75%
d. 11.55%
View Answer:
1088. 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. P4.21
c. P5.48
d. P6.25
View Answer:
1089. If the effective rate is 24%, what nominal rate of interest is charged for a continuously compounded loan?
a. 21.51%
b. 22.35%
c. 23.25%
d. 21.90%
View Answer:
1090. What is the nominal rate of interest compounded continuously for 8 years if the present worth factor is equal to
0.6187835?
a. 4%
b. 5%
c. 6%
d. 7%
View Answer:
year? (P5000 accumulated)
a. P155
b. P100
c. P50
d. same
View Answer:
a. P76.92
b. P80.00
c. P77.66
d. P78.42
View Answer:
1093. If a sum of money triples in a certain period of time at a given rate interest, compute the value of the single
a. 0.333
b. 3.000
c. 0.292
d. 1.962
View Answer:
1094. If the single payment amount factor for a period of 5 years is 1.33822. What is the nearest value of the interest
rate?
a. 8%
b. 7%
c. 5%
d. 6%
View Answer:
1095. 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. 7%
c. 5%
d. 8%
View Answer:
1096. If money is worth 8% compounded quarterly, compute the single payment amount factor for a period of 6 years.
a. 1.60844
b. 0.62172
c. 1.70241
d. 0.53162
View Answer:
1097. 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. P705.42
c. P750.42
d. P425.07
View Answer:
For problems 1098-1100:
Compute the interest for an amount of P200,000 for a period of 8 years.
1098. If it was made at a simple interest rate of 16% .
a. P274,000
b. P265,000
c. P256,000
d. P247,000
View Answer:
1099. If it was made at 16% compounded bi-monthly.
a. P507,267.28
b. P507,365.96
c. P407,283.01
d. P459,923.44
View Answer:
1100. If it was made at 16% compounded continuously.
a. P422,462.64
b. P507,233.24
c. P524,242.46
d. P519,327.95
1101. Find the value of x, (F/P, x, 6) if F/P compounded quarterly is equal to 1.612226.
a. 8%
b. 7%
c. 6%
d. 5%
View Answer:
1102. Find the value of y, (P/F, 6%, y) if P/F compounded bi-monthly is equal to 0.787566.
a. 7 years
b. 6 years
c. 5 years
d. 4 years
View Answer:
1103. Find the rate of interest if compound amount factor compounded bi-monthly for 5 years is equal to 1.487887.
a. 7%
b. 8%
c. 5%
d. 6%
View Answer:
1104. Compute the nominal rate for a period of 6 years for an effective rate of 8.33% if it is compounded continuously.
a. 5%
b. 6%
c. 7%
d. 8%
View Answer:
1105. Compute the equivalent compound amount factor if it is compounded continuously.
a. 1.61607
b. 1.24282
c. 1.24532
d. 0.24245
View Answer:
1106. Compute the equivalent present worth factor if it is compounded continuously.

a. 1.249347
b. 1.214359
c. 1.243248
d. 0.616783
View Answer:
1107. A man loan P2000 from the bank. How long would it take in years for the amount of the loan and interest to equal
P3280 if it was made at 8% simple interest.
a. 7 years
b. 8 years
c. 5 years
d. 6 years
View Answer:
1108. A man loan P2000 from the bank. How long would it take in years if it was made at 8% compounded quarterly.
a. 5.25 years
b. 6.25 years
c. 7.25 years
d. 8.25 years
View Answer:
1109. A man loan P2000 from the bank. How long would it take in years if it was made at 8% compounded continuously.
a. 7.18 years
b. 8.18 years
c. 5.18 years
d. 6.18 years
View Answer:
1110. An amount of P1000 becomes P1608.44 after 4 years compounded bi-monthly. Find the nominal rate of interest,
the effective rate of interest, and the equivalent rate of interest if it is compounded quarterly.
a. 11% ; 12.623% ; 11.42%
b. 12% ; 12.616% ; 12.06%
c. 12% ; 11.06% ; 12.724%
d. 11% ; 11.664% ; 11.93%
View Answer:
1111. How long would it take your money to double itself if it is invested at 6% simple interest, compounded semi-
quarterly, and compounded continuously?
a. 12.67 yrs ; 11.2yrs ; 15.05 yrs
b. 16.67 yrs ; 11.6yrs ; 11.55 yrs
c. 18.67 yrs ; 11.6yrs ; 11.24 yrs
d. 17.67 yrs ; 10.2yrs ; 11.45 yrs
View Answer:
For problems 1112-1114:
An amount of P50,000 was invested for 3 years.
1112. Compute its interest at the end of 3 years if it is invested at 10% simple interest.
a. P16,550.00
b. P17,492.94
c. P15,000.00
d. P14,242.15
View Answer:
1113. Compute for its compound interest if it is invested at 10% compounded annually.
a. P16,550.00
b. P17,492.94
c. P15,000.00
d. P14,242.15
View Answer:
1114. Compute its interest if it is invested at 10% compounded continuously.
a. P16,550.00
b. P17,492.94
c. P15,000.00
d. P14,242.15
View Answer:
P200,000 was deposited for a period of 4 yrs. And 6 months and bears on interest of P85,659.25.
1115. What is the nominal rate of interest if it is compounded quarterly?
a. 8.00%
b. 8.24%
c. 7.00%
d. 7.96%
View Answer:
1116. What is the actual rate of interest?
a. 8.00%
b. 8.24%
c. 7.00%
d. 7.96%
View Answer:
1117. What is the equivalent nominal rate if it is compounded semi-quarterly?
a. 8.00%
b. 8.24%
c. 7.00%
d. 7.96%
View Answer:
1118. What is the value of (F/P, 8%, 6) if it is compounded semi-quarterly.
a. 0.524273541
b. 0.787566127
c. 1.487886717
d. 1.612226000
View Answer:
1119. What is the value of (P/F, 6%, 4) if it is compounded bi-monthly.
a. 0.524273541
b. 0.787566127
c. 1.487886717
d. 1.612226000
View Answer:
1120. What is the single payment compound amount factor for 8% compounded bi-monthly for 5 years.
a. 0.524273541
b. 0.787566127
c. 1.487886717
d. 1.612226000
View Answer:
If money is invested at a nominal rate of interest of 8% for a period of 4 years.
1121. What is the effective rate if it is compounded continuously?
a. 8.33%
b. 8.93%
c. 9.33%
d. 9.93%
View Answer:
1122. What is the value of the compound amount factor if it is compounded continuously?
a. 1.377128
b. 0.214212
c. 1.424231
d. 0.122416
View Answer:
1123. What is the value of the present worth factor if it is compounded continuously?
a. 1. 272441
b. 1.726419
c. 0.272441
d. 0.726149
View Answer:
1124. If the single payment amount factor for a period of 5 years is 1.33822, what is the nominal rate of interest?
a. 6.00%
b. 6.92%
c. 7.00%
d. 7.92%
View Answer:
1125. What is the effective rate of interest if it is compounded semi-annually of problem# 1124?
a. 5.00%
b. 6.92%
c. 7.24%
d. 6.09%
View Answer:
1126. What is the equivalent nominal rate if it is compounded quarterly of problem# 1124?
a. 6.12%
b. 5.43%
c. 4.24%
d. 5.87%
View Answer:
1127. Money was invested at x% compounded quarterly. If it takes money to quadruple in 17.5 years, find the value of x.
a. 6.23%
b. 5.92%
c. 8.00%
d. 9.78%
View Answer:
1128. What is the actual interest rate of problem# 1127?
a. 7.24%
b. 8.24%
c. 7.92%
d. 8.87%
View Answer:
1129.) What is the equivalent rate if problem# 1127 is compounded daily?
a. 7.24%
b. 8.24%
c. 7.92%
d. 8.87%
View Answer:

A businessman loaned P500,000 from a local bank that charges an interest rate of 12%.
1130. How much is he going to pay at the end of 5 years if it was made at 12% simple interest?
a. P800,000.00
b. P823,243.09
c. P911,059.20
d. P907,009.21
View Answer:
1131. How much is he going to pay at the end of 5 years if it was made at 12% compound semi-quarterly?
a. P800,000.00
b. P823,243.09
c. P911,059.20
d. P907,009.21
View Answer:
1132. How much is he going to pay at the end of 5 years if it was made at 12% compound continuously?
a. P800,000.00
b. P823,243.09
c. P911,059.20
d. P907,009.21
View Answer:
1133. P60,000 was deposited at 6% compounded quarterly, tax free for 9 years and 3 months. How much interest was
earned at the end of the period?
a. P43,214.24
b. P43.242.24
c. P44,086.60
d. P44,215.60
View Answer:
1134. P100,000 was placed in a time deposit which earned 9% compounded quarterly tax free. After how many years
would it be able to earn a total interest of P50,000?
a. 4.56 years
b. 4.23 years
c. 3.45 years
d. 3.64 years
View Answer:
1135. P200,000 was placed in a time deposit at x% compounded quarterly and was free of taxes. After exactly 5 years,
the total interest earned was P120,000. What is the value of x?
a. 9.5%
b. 8.21%
c. 6.35%
d. 7.12%
View Answer:
a. 12.35% compounded annually
b. 11.9% compounded semi-annually
c. 12.2% compounded quarterly
d. 11.6% compounded monthly
View Answer:
1137. It takes 20.15 years to quadruple your money if it is invested at x% compounded semi-annually. Find the value of
x.
a. 8%
b. 6%
c. 7%
d. 5%
View Answer:
1138. It takes 13.87 years to treble the money at the rate of x% compounded quarterly. Compute the value of x.
a. 5%
b. 6%
c. 7%
d. 8%
View Answer:
1139. Money was invested at x% compounded quarterly. If it takes the money into quadruple in 17.5 years, find the
value of x.
a. 8%
b. 6%
c. 7%
d. 5%
View Answer:
1140. Fifteen years ago P1,000.00 was deposited in a bank account, and today it is worth P2.370.00. The bank pays
interest semi-annually. What was the interest rate paid on this account?
a. 4.9%
b. 5.8%
c. 5.0%
d. 3.8%
View Answer:
1141. 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. Compare how much money you will save or lose on the transaction.
a. pay P155 more if you borrowed from the bank
b. save P55 by borrowing from your friend
c. pay P85 more if you borrowed from the bank
b. save P95 by borrowing from your friend
View Answer:
a. P30,444.44
b. P33,000.00
c. P30,655.68
d. P30,546.01
View Answer:
1143.) An initial savings deposit of P80,000 in a certain bank earns 6% interest per annum compounded monthly. If the
earnings from the deposit are subject to a 20% tax, what would the net value of the deposit be after three quarters?
a. P95,324.95
b. P82938.28
c. P68743.24
d. P56244.75
View Answer:
1144. The effective rate of interest of 14% compounded semi-annually is:
a. 14.49%
b. 14.36%
c. 14.94%
d. 14.88%
View Answer:
a. P71,781.47
b. P72,475.23
c. P70,374.90
d. P78,536.34
View Answer:
a. 18.35%
b. 19.39%
c. 18.10%
d. 19.72%
View Answer:
1147. If P1,000 becomes P1,126.49 after 4 years when invested at a certain nominal rate of interest compounded semi-
annually, determine the nominal rate and the corresponding effective rate.
a. 3.00% and 3.02%
b. 4.29% and 4.32%
c. 2.30% and 2.76%
d. 3.97% and 3.95%
View Answer:
1148. Convert 12% semi-annually to compounded quarterly.
a. 19.23%
b. 23.56%
c. 14.67%
d. 11.83%
View Answer:
1149. What is the corresponding effective interest rate of 18% compounded semi-quarterly?
a. 19.25%
b. 19.48%
c. 18.46%
d. 18.95%
View Answer:
1150. If P5000 shall accumulate for 10 years at 8% compounded quarterly, find the compounded interest at the end of
10 years.
a. P6,005.30
b. P6,000.00
c. P6,040.20
d. P6,010.20
1151. A couple borrowed P4,000 from a lending company for 6 years at 12%. At the end of 6 years, it renews the loan for
the amount due plus P4,000 more for 3 years at 12%. What is the lump sum due?
a. P14,842.40
b. P16,712.03
c. P12,316.40
d. P15,382.60
View Answer:
1152. How long (in years) will it take the money to quadruple if it earns 7% compounded semi-annually?
a. 26.30 years
b. 40.30 years
c. 33.15 years
d. 20.15 years
View Answer:
1153. P200,000 was deposited on Jan. 1,1988 at an interest rate of 24% compounded semi-annually. How much would
the sum be on Jan. 1, 1993?
a. P421,170
b. P521,170
c. P401,170
d. P621,170
View Answer:
years and 9 months.
a. P690,849
b. P670,258
c. P680,686
d. P660,592
View Answer:
be P621,170?
a. 4 years
b. 3 years
c. 5 years
d. 6 years
View Answer:
1156. A bank is advertising 9.5% accounts that yields 9.84% annually. How often is the interest compounded?
a. monthly
b. bi-monthly
c. quarterly
d. daily
View Answer:
1157. A marketing company established a program to replace the cars of its sales representatives at the end of every 5
years. If the present price of the approved type of car is P520,000.00 with a resale value at the end of 5 years of 60% its
present value, how much money must the company accumulate for 5 years if inflation annually is 10%. Release value will
also appreciate at 10% yearly.
a. P120,289.51
b. P129,382.38
c. P110,297.27
d. P122,265.69
View Answer:
6%. How much, in terms of year zero will be in the account at maturity?
a. P15,386.00
b. P15,030.00
c. P13,382.00
d. P16,653.00
View Answer:
1159. A machine has been purchased and installed at a total cost of P18,000.00. The machine will be retired at the end
of 5 years, at which time it is expected to have a scrap value of P2,000.00 based on current prices. The machine will then
be replaced with an exact duplicate. The company plans to establish a reserve fund to accumulate the capital needed to
a. P15,030.00
b. P18,548.39
c. P12,382.00
d. P15,386.00
View Answer:
1160. If the inflation rate is 6%, cost of money is 10%, what interest rate will take care of inflation and the cost of
money?
a. 16.6%
b. 15.5%
c. 17.7%
d. 14.4%
View Answer:
1161. A man bought a government bond which cost P1000 and will pay P50 interest each year for 20 years. The bond
will mature at the end of 20 years and he will receive the original P1000. If there is 2% annual inflation during this
period, what rate of return will the investor receive after considering the effect of inflation?
a. 2.94%
b. 3.16%
c. 4.25%
d. 5.16%
View Answer:
1162. The inflated present worth of P2000 in two years is equal to P1471.07. What is the rate of inflation if the interest
rate is equal to 10%?
a. 5%
b. 6%
c. 7%
d. 4%
View Answer:
1163. 12% rate of interest can take care of the cost of money and inflation. If the nominal rate of interest is 6%, what is
the rate of inflation?
a. 6.62%
b. 5.66%
c. 7.67%
d. 4.64%
View Answer:
1164. An engineer bought an equipment for P500,000. Other expenses including installations amounted to P30,000. At
the end of its estimated useful life of 10 years, the salvage value will be 10% of the first cost. Using straight line method
of depreciation, what is the book value after 5 years?
a. P214,242
b. P282,242
c. P242,241
d. P291,500
View Answer:
1165. A small machine costing P80,000 has a salvage value of x at the end of its life of 5 years. The book value at the end
of the 4th year is P22,400. What is the value of x using the straight line method depreciation?
a. P6000
b. P7000
c. P8000
d. P9000
View Answer:
1166. A machine has a salvage value of P12,000 at the end of its useful life of 6 years. The book value at the end of 5
years is P30,833.33. Using a straight line method of depreciation, what is the first cost of the machine?
a. P125,500
b. P135,500
c. P125,000
d. P135,000
View Answer:
1167. A manufacturing plant was built at a cost of P5M and is estimated to have a life of 20 years with a salvage value of
P1M. A certain equipment worth P570,000 was installed at a cost of P80,000 is expected to operate economically for 15
years with a salvage value of P50,000. Determine the book value of the plant and equipment after 10 years, use straight
line depreciation method.
a. P3,250,000
b. P3,750,000
c. P4,250,000
d. P4,500,000
View Answer:
1168. A printing equipment costs P73,500 has a life expectancy of 8 years and has a salvage value of P3,500 at the end of
its life. The book value at the end of x years is equal to P38,500. Using straight line method of depreciation, solve for the
value of x.
a. 5 years
b. 4 years
c. 6 years
d. 3 years
View Answer:
1169. The cost of the printing equipment is P500,000 and the cost of handling and installation is P30,000. If the book
value of the equipment at the end of the 3rd year is P242,000 and the life of the equipment is assumed to be 5 years,
determine the salvage value of this equipment at the end of 5 years.
a. P50,000
b. P60,000
c. P53,000
d. P64,000
View Answer:
other expenses. The salvage value is 10% of the first cost. If the book value at the end of 5 years will be P291,500 using
straight line method of depreciation, compute the useful life of the equipment in years.
a. 6 years
b. 8 years
c. 10 years
d. 15 years
View Answer:
equipment at the end of 5 years, determine the book value at the end of the fourth year. Use straight line method.
a. P155,000
b. P140,000
c. P146,000
d. P132,600
View Answer:
The first cost of a machine is P1,800,000 with a salvage value of P300,000 at the end of its life of 5 years. Determine the
total depreciation after 3 years.
1172. Using Straight Line Method
a. P800,000
b. P600,000
c. P900,000
d. P700,000
View Answer:
1173. Using Sum of Years Digit Method
a. P1,150,000
b. P1,200,000
c. P1,300,000
d. P1,350,600
View Answer:
1174. Using Constant Percentage Method
a. P1,355,024.24
b. P1,185,769.76
c. P1,246,422.53
d. P1,432,624.84
View Answer:
1175. An asset is purchased for P9,000.00. Its estimated economic life is 10 years after which it will be sold for
P1,000.00. Find the depreciation in the first three years using straight line method.
a. P2,500
b. P2,400
c. P3,000
d. P2,000
View Answer:
1176. The purchase of a motor for P6000 and a generator for P4000 will allow the company to produce its own energy.
The configuration can be assembled for P500. The service will operate for 1600 hours per year for 10 years. The
maintenance cost is P300 per year, and cost to operate is P0.85 per hour for fuel and related cost. Using straight line
depreciation, what is the annual cost for the operation? There is a P400 salvage value for the system at the end of 10
year.
a. P2,710
b. P2,480
c. P2,630
d. P2,670
View Answer:
1177. A machine has an initial cost of P50,00.00 and a salvage value of P10,000.00 after 10 years. What is the straight
line method depreciation rate as a percentage of the initial cost?
a. 10%
b. 8%
c. 12%
d. 9%
View Answer:
1178. A machine has an initial cost of P50,00.00 and a salvage value of P10,000.00 after 10 years. What is the book value
after 5 years using straight line method depreciation rate?
a. P35,000
b. P25,000
c. P15,500
d. P30,000
View Answer:
1179. A machine has a first of P80,000 and a salvage of P2,000 at the end of its life of 10 years. Find the book value at
the end of the 6th year using straight line method of depreciation.
a. P33,200
b. P35,400
c. P34,300
d. P32,900
View Answer:
book value during the first year if Sum of the Years Digits(SYD) depreciation is used.
a. P7,545.45
b. P2,980.24
c. P5,245.92
d. P6,259.98
View Answer:
1181. A telephone company purchased a microwave radio equipment for P6M. Freight and installation charges
amounted to 3% of the purchased price. If the equipment shall be depreciated over a period of 8 years with a salvage
value of 5%, determine the depreciation charge during the 5th year using the Sum of Year Digit Method.
a. P756,632.78
b. P957,902.56
c. P652,333.33
d. P845, 935.76
View Answer:
1182. A consortium of international communications companies contracted for the purchase and installation of a fiber
optic cable linking two major Asian cities at a total cost of P960M. This amount includes freight and installation charges
at 10% of the above total contract price. If the cable depreciated over a period of 15 years with zero salvage value, what
is the depreciation charge during the 8th year using the sum of year digits method?
a. P64 M
b. P23 M
c. P80 M
d. P76 M
View Answer:
1183. 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 4 years using sum years digit method.
a. P3,476.90
b. P2,294.44
c. P6,543.21
d. P5,455.01
View Answer:
1184. A certain equipment costs P7,000 has an economic life of n years and a salvage value P350 at the end of n years. If
the book value at the end of 4 years is equal to P2197.22, compute for the economic life of the equipment using the sum
of years digit method.
a. 10 years
b. 16 years
c. 8 years
d. 11 years
View Answer:
1185. A company purchased an asset for P10000 and plans to keep it for 20 years. If the salvage value is zero at the end
of the 20th year, what is the depreciation in the third year? Use sum of years digit method.
a. P1000
b. P857
c. P938
d. P747
View Answer:
1186. An equipment costs P7000 and has a life of 8 years and salvage value of x after 8 years. If the book value of the
equipment at the 4th year is equal to P2197.22, compute the salvage value x using the sum of years digit method.
a. P594
b. P430
c. P350
d. P290
View Answer:
1187. ABC Corporation makes it policy that for every new equipment purchased, the annual depreciation should not
exceed 20% of the first cost at any time without salvage value. Determine the length of service if the depreciation used
is the SYD Method.
a. 9 years
b. 10 years
c. 12 years
d. 19 years
View Answer:
1188. A machine having a certain first cost has a life of 10 years and a salvage value of 6.633% of the first cost at the end
of 10 years. If it has a book value of P58,914 at the end of the 6th year, how much is the first cost of the machine if the
constant percentage of declining value is used in the computation for its depreciation.(Matheson’s Method)
a. P600,000
b. P300,000
c. P100,000
d. P900,000
View Answer:
1189. A machine costing P720,000 is estimated to have a life of 10 years. If the annual rate of depreciation is 25%,
determine the total depreciation using a constant percentage of the declining balance method.
a. P679,454.27
b. P432,725.45
c. P532,825.73
d. P764,243.33
View Answer:
1190. An earth moving equipment that cost P90,000 will have an estimated salvage value of P18,000 at the end of 8
years. Using double-declining balance method, compute the book value and the total depreciation at the end of the 5th
year.
a. P21,357.42 ; P68,642.58
b. P15,830.34 ; P74,169.66
c. P24,362.48 ; P65,637.52
d. P19,442.78 ; P70,557.22
View Answer:
1191. A certain office equipment has a first cost of P20,000 and has a salvage value of P1,000 at the end of 10 years.
Determine the depreciation at the end of the 6th year using Sinking fund method at 3% interest.
a. P10,720
b. P12,420
c. P11,680
d. P9,840
View Answer:
1192. An equipment which cost 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 the calculation of depreciation?
a. Straight Line
b. Sinking Fund
c. Declining Balance
d. Sum of Years Digit
View Answer:
1193. An equipment costs P8,000 has an economic life of 8 years and salvage value of P400 at the end of 8 years. The
first year depreciation amounts to P1,688.89. What method is used in the calculation of the depreciation?
a. Straight Line
b. Sinking Fund
View Answer:
1194. The original cost of a certain machine is P150,000 and has an economic life of 8 years with a salvage value of
P9,000 at that time. If the depreciation of the first year is equal to P44,475, what method is used in the calculation of the
depreciation?
a. Straight Line
b. Sinking Fund
View Answer:
1195. A machine has a first cost of P140,000 and a life of 8 years with a salvage value of P10,000 at the end of its useful
life. If the depreciation at the first year amounts to P35,000, what method is used in the calculation of depreciation?
a. Double Declining Balance
b. Declining Balance
c. Straight Line
View Answer:
1196. A hydraulic machine cost P180,000 and has a salvage value of P15,000 at the end of its useful life which is 12
years. If the depreciation at the first year is P9,780.71, what method is used in computing the depreciation. Assume
money is worth 6% annually.
a. Straight Line
b. Sinking Fund
View Answer:
operating hours. In the first year, it was used for 4,000 hours. Determine its book value at the end of the first year.
a. P430,629.00
b. P380,420.00
c. P418,360.00
d. P376,420.00
View Answer:
operating hours in a period of 5 years. In the first year of service, it was used for 12,000 hours. If at the end of the 2nd
year it was used for 15,000 hours, find the depreciation at the second year.
a. P180,000
b. P160,000
c. P190,000
d. P150,000
View Answer:
1199. A certain machine cost P40,000 and has a life of 4 years and a salvage value of P5000. The production output of
this machine in units per year is 1000 units for the first year, 2000 units for the second year, 3000 units for the third
year, and 4000 units for the fourth year. If the units produced are in uniform quality, what is the depreciation charge at
the end of the fourth year.
a. P14,000
b. P13,000
c. P15,000
d. P16,000
View Answer:
1200. A lathe machine costs P300,000 brand new with a salvage value of x pesos. The machine is expected to last for
28500 hours in a period of 5 years. In the first year of service it was used for 8000 hours. If the book value at the end of
the first year is P220,000, compute for the salvage value x in pesos.
a. P15,000
b. P18,000
c. P12,000
d. P20,000
1201. A certain machine cost P40,000 and has a life of 4 years and a salvage value of P5000. The production output of
this machine in units per year is first year 1800 units, second year 2200 units, third year 3000, and fourth year 4000
units. If the units produced are of uniform quality, what is the depreciation charge at the end of 4th year?
a. P12,727.27
b. P15,350.23
c. P16,420.43
d. P17,200.98
View Answer:
1202. A lathe machine cost P300,000 with a salvage value of P15,000 is expected to last for 285000 hours in a period of
5 years. In the first year of service it was used for 8000 hours. Compute the book value of the machine at the end of the
first year.
a. P292,000
b. 200,000
c. P250,000
d. P323,000
View Answer:
1203. A machine costing P280,000 has a useful life of 20,000 hrs. at the end of which its salvage value is P30,000. In the
first year, it was used for 2080 hrs, in the second year, 3160 hrs. Find the second depreciation cost in pesos.
a. P23,520
b. P25,252
c. P39,500
d. P35,400
View Answer:
1204. An equipment costs P400,000 and has a life of 30,000 hrs at the end of which its salvage value is x pesos. In the
first year, it was used for 6240 hrs. The book value at the end of the first year was P325,120. Find the value of x.
a. P40,629
b. P30,420
c. P40,000
d. P30,000
View Answer:
1205. An engineering firm from purchased, 12 years ago, a heavy planner for P50,000 with no salvage value. As the life
of the planner was 20 years, a straight line depreciation reserve has been provided on that basis. Now the firm wishes to
replace the old planner with a new one possessing several advantages. It can sell the old planner for P10,000. The new
one will cost P100,000. How much new capital will be required to make the purchase?
a. P60,000
b. P55,000
c. P66,000
d. P57,000
View Answer:
1206. Ten years ago, a contractor was able to purchase a crane whose capacity is 2000 tons costing P125 per ton. The
life was estimated to be 15 years with a salvage value of 10% of the cost. A market has been found for the old crane for
P80,000. If the depreciation has been figured on a straight line basis what is the difference between the depreciation
book value of the old crane and its sale value.
a. P10,000
b. P30,000
c. P15,000
d. P20,000
View Answer:
1207. What is the nominal value of interest compounded continuously for a period of 5 years of an equal payment series
if the capital recovery factor is equal to 0.2385787.
a. 4%
b. 5%
c. 6%
d. 8%
View Answer:
1208. What is the nominal rate of interest compounded continuously for a period of 5 years of an equal payment series
if the sinking fund factor is equal 0.180519?
a. 4%
b. 5%
c. 6%
d. 8%
View Answer:
1209. Compute the number of years so that the capital recovery factor of a uniform payment series be equal to
0.218638 if money is worth 3% compounded continuously.
a. 5
b. 4
c. 6
d. 3
View Answer:
1210. A manufacturing firm wishes to give each 80 employee a holiday bonus. How much is needed to invest monthly
for a year at 12% nominal interest rate, compounded monthly, so that each employee will receive a P2000 bonus?
a. P12,608
b. P12,615
c. P12,600
d. P12,300
View Answer:
1211. An instructor plans to retire in one year and want an account that will pay him P25000 a year for the next 15
years. Assuming 6% annual effective interest rate, what is the amount he would need to deposit now? (The fund will be
depleted after 15 years)
a. P249,000
b. P242,806
c. P248,500
d. P250,400
View Answer:
1212. Ryan invest P5,000 at the end of each year in an account which gives a nominal annual interest of 7.5%,
compounded continuously. Determine the total worth of his investment at the end of 15 years.
a. P133,545.58
b. P142,647.28
c. P126,336.42
d. P135,429.64
View Answer:
1213. A car dealer advertise the sale of a car model far a cash price of P280,000. If purchased in installment, the required
down payment is 15% and balance payable in 18 equal monthly installments at an interest rate of 1.5% per month. How
much will be the required monthly payments?
a. P15,185.78
b. P11,588.72
c. P10,972.33
d. P15,558.12
View Answer:
1214. How much must be deposited at 6% each year beginning Jan 1, year 1, in order to accumulate P5,000 on the date
of the last deposit, Jan 1, year 6?
a. P751
b. P717
c. P715
d. P775
View Answer:
1215. In anticipation of a much bigger volume of business after 10 years, a fabrication company purchased an adjacent
lot for its expansion program where it hopes to put up a building projected to cost P4,000,000 when it will be
constructed 10 years after. To provide for the required capital expense, it plans to put up a sinking fund for the purpose.
How much must the company deposit each year if the interest to be earned is computed at 15%
a. P197,008.25
b. P199,090.25
c. P177,009.25
d. P179,008.25
View Answer:
1216. Rainer Wandrew borrowed P50,000 from Social Security System, in the form of calamity loan, with interest at 8%
quarterly installments for 10 years. Find the quarterly payments.
a. P1827.79
b. P1892.18
c. P1287.78
d. P1972.36
View Answer:
1217. For having been loyal, trustworthy, and efficient, the company has offered a superior yearly gratuity pay of
P20,000 for 10 years with the first payment to be made one year after his retirement. The supervisor, instead, requested
that he be paid a lump sum, on the date of his retirement, having less interest that the company would have earned if
the gratuity is to be paid in yearly basis. If interest is 15%, what is the equivalent lump sum that he could get?
a. P100,375.37
b. P100,735.37
c. P101,757.37
d. P100,575.37
View Answer:
1218. If P500 is invested at the end of each year for 6 years, at an annual interest rate of 7%, what is the total peso
amount available upon the deposit of the sixth payment?
a. P3,210
b. P3,577
c. P3,000
d. P4,260
View Answer:
1219. A series of year and payments extending over eight years are as follows: P10,000 for the first year, P20,000 for the
second year, P50,000 for the third year, and P40,000 for each year from fourth year through the 8th year. Find the
equivalent annual worth of these payments if the annual interest is 8%.
a. P44,800.00
b. P30,563.00
c. P35,650.00
d. P33,563.85
View Answer:
1220. In five years, P18,000 will be needed to pay for a building renovation,. In order to generate this sum, a sinking fund
consisting of three annual payments is established now. For tax purposes, no further payments will be made after three
years. What payments are necessary if money is worth 15% per annum?
a. P2870
b. P3919
c. P5100
d. P2670
View Answer:
1221. San Miguel Corporation purchases P400,00 worth of equipment in year 1970. It decided to use straight line
depreciation over the expected 20 year life of the equipment. The interest rate is 16%. If the overall tax rate is 35% ,
what is the present worth of the tax shield?
a. P40,298.68
b. P41,501.89
c. P45,450.28
d. P51,410.37
View Answer:
1222. A local firm is establishing a sinking fund for the purpose of accumulating a sufficient capital to retire its
outstanding bonds and maturity. The bonds are redeemable in 10 years, and their maturity value is P150,000. How
much should be deposited each year if the fund pays interest at the rate of 3%?
a. P12,547.14
b. P13,084.58
c. P14,094.85
d. P16,848.87
View Answer:
1223. A machine costs P20,000 today and has an estimated scrap value of P2,000 after 8 years. Inflation is 2% per year.
The effective annual interest rate earned on money invested is 8%. How much money needs to be set aside each year to
replace the machine with an identical model 8 years from now?
a. P2,808.88
b. P3,290.00
c. P3,920.00
d. P3,610.00
View Answer:
1224. A machine is under consideration for investment. The cost of the machine is P25,000. Each year it operates, the
machine generates P15,000. Given an effective annual interest rate of 18%, what is the discounted payback period, in
years, on the investment of the machine?
a. 1.75 years
b. 3.17 years
c. 1.67 years
d. 2.16 years
View Answer:
1225. Company A purchases P200,000 of equipment in year zero. It decides to use straight line depreciation over the
expected 20 year life of the equipment. The interest rate is 14%. If the average tax rate is 40%, what is the present worth
of the depreciation tax held?
a. P30,500
b. P26,500
c. P39,700
d. P40,000
View Answer:
1226. Instead of paying P100,000 in annual rest for office space at the beginning of each year for the next 10 years, an
engineering firm has decided to take out a 10 year P100,000 loan for a new building at 6% interest. The firm will invest
P100,000 of the rent saved and earned 18% annual interest on that amount. What will be the difference between the
revenue and expenses?
a. Firm will need P17,900 extra
b. Firm will break even
c. Firm will have P21,500 left over

d. Firm will need P13,000 extra
View Answer:
1227. A man inherited a regular endowment of P100,000 every end of 3 months for x years. However, he may choose to
get a single lump of P3,702,939,80 at the end of 4 years. If the rate interest was 14% compounded quarterly, what is the
value of x?
a. 13 years
b. 10 years
c. 12 years
d. 11 year
View Answer:
1228. A service car whose car price was P540,000 was bought with a down payment of P162,000 and monthly
installments of P10,847.29 for 5 years. What was the rate of interest if compounded monthly?
a. 30%
b. 24%
c. 20%
d. 15%
View Answer:
1229. What is the present worth of a 3 year annuity paying P3000 at the end of each year, with interest at 8%
a. P7,731.29
b. P9,731.79
c. P7,371.29
d. P9,371.79
View Answer:
1230. A man paid a 10% down payment of P200,000 for a house and lot and agreed to pay the balance on monthly
installments for 5 years at an interest rate of 15% compounded monthly. What was the monthly installment on pesos?
a. P44,528.34
b. P42,821.87
c. P43,625.92
d. P45,825.62
View Answer:
1231. A man inherited a regular endowment of P100,000 every end of 3 months for 10 years. However, he may choose
to get a single lump sum payment at the end of 4 years. How much is this lump sum if the cost of money is 14%
a. P3,702,939.73
b. P3,802,862.23
c. P3,502,546.23
d. P3,602,431.73
View Answer:
installments for x years at an interest rate of 15% compounded monthly. If the monthly installment was P42,821.87, find
the value of x.
a. 5 years
b 9 years
c. 8years
d. 7 years
View Answer:
1233. A father wishes to provide P4000 for his son on his 21st birthday. How much should he deposit every 6 months in
a savings bank which pays 3% compounded semi-annually if the first deposit is made when the son is 3.5 years old?
a. P45.76
b. P94.24
c. P84.61
d. P78.68
View Answer:
1234. An employee obtained a loan of P100,000 at the rate of 6% compounded in order to build a house. How much
must he pay monthly to amortize the loan within a period of 10 years?
a. P8,322.07
b. P1,101.80
c. P2,494.04
d. P3,452.90
View Answer:
1235. If money is worth 5% compounded semi-annually, find the present value of a sequence of 12 semi-annual
payments of P500 each, the first of which is due at the end of 4.5 years.
a. P4,209.51
b. P5,602.62
c. P6,240.62
d. P7,161.42
View Answer:
1236. An annual deposit of P1270 is placed on the fund at the end of each year for 6 years. If the fund invested has a
rate of interest of 5% compounded annually, how much is the worth of this fund at the end of 9 years?
a. P12,000
b. P10,000
c. P11,000
d. P14,000
View Answer:
1237. A fund for replacement of a machinery in a plant must have P30,000 at the end of 9 years. An equal deposit of
P2,965 was made on the fund at the end of each 6 months for 4 years only. How much is the rate of the fund invested if
it is compounded semi-annually?
a. 3.5%
b. 4.5%
c. 5.5%
d. P6.5%
View Answer:
1238. In purchasing a house, a man makes a cash payment and takes out a mortgage for P10,000 on which he agrees to
pay P200 at the end of each month for 5 years. At what interest rate compounded monthly was interest charged on the
mortgage?
a. 8.41%
b. 7.42%
c. 7.68%
d. 9.60%
View Answer:
1239. How much money must you invest in order to withdraw P2000 annually for 10 years if the interest rate is 9%?
a. P12,853.32
b. P12,881.37
c. P12,835.32
d. P12,385.32
View Answer:
1240. If interest is at rate of 8% compounded semi-annually, what sum must be invested at the end of each 6 months to
accumulate a fund of P10,000 at the end of 8 years?
a. P458.20
b. P532.11
c. P498.23
d. P753.10
View Answer:
1241. A Corporation will invest P5000 in a fund at the end of each 6 months to accumulate P100,000 to initiate a plant
overhaul. If the fund is invested at 6.5% compounded semi-annually, how may years will the fund contain at least
P100,000?
a. 8 years
b. 6 years
c. 10 years
d. 9 years
View Answer:
1242. A piece of machinery can be bought for P10,000 cash, or for P2000 down and payments of P750 per year for 15
years. What is the annual interest rate for time payments?
a. 4.61%
b. 3.81%
c. 5.71%
d. 11.00%
View Answer:
1243. To accumulate a fund of P8000 at end of 10 years, a man will make equal annual deposit of P606.94 in the fund at
the end of each year. How much is the rate of interest if it is compounded annually?
a. 6%
b. 8%
c. 10%
d. 12%
View Answer:
1244. A purchasing engineer of a certain firm is to purchase a second hand truck for P75,000. A dealer offers cash
payment of P5,000 and P6486 per month for 12 months. Another dealer offered under the same condition with 0.75%
interest per month for 12 months of the unpaid balance. Which offer should the engineer choose and what is the rate of
interest?
a. 0.62%
b. 1.66%
c. 0.75%
d. 0.40%
View Answer:
1245. If a low cost house and lot worth P87,000 were offered at 10% down payment and P500 per month for 25 years.
What is the effective monthly interest rate on the diminished balance?
a. 0.492%
b. 0.687%
c. 0.531%
d. 0.683%
View Answer:
1246. A house and lot can be acquired with a down payment of P500,000 and a yearly payment P100,000 at the end of
each year for a period of 10 years, starting at the end of 5 years from the date of purchase. If the money is worth 14%
compounded semi-annually, what is the cash price of the property?
a. P810,000
b. P808,836
c. P801,900
d. P805,902
View Answer:
1247. A man bought a brand new car for P650,000 on installment basis at the rate of 10% per annum on the unpaid
balance. If he paid a down payment of P120,000 cash and proposed to pay the balance in equal monthly payment for 2
years, what should be his monthly payment?
a. P54,323.03
b. P34,532.94
c. P24,447.03
d. P83,534.32
View Answer:
1248. A businessman is faced with the prospect of fluctuating future budget for the maintenance of the generator.
During the first 5 years, P1,000 per year will be budgeted. During the second 5 years, the annual budget will be P1500
per year. In addition, P3500 will be budgeted for an overhaul of the machine at the end of the fourth year and another
P3500 for an overhaul at the end of 8th year. Assuming compounded interest at 6% per annum, what is the equivalent
annual cost of maintenance?
a. P1,888.87
b. P1,738.34
c. P1,777.38
d. P1,999.34
View Answer:
1249. A parent on the day the child is born wishes to have to determine what lump sum would have to be paid into an
account bearing interest at 5% compounded annually, in order to withdraw P20,000 each on the child’s 18th, 19th, 20th,
and 21st birthdays.
a. P35,941.73
b. P33,941.73
c. P30,941.73
d. P25,941.73
View Answer:
1250. If money is worth 5% compounded semi-annually, find the present value of a sequence of 12 semi-annual
payments of P500 each, the first of which is due at the end of 4.5 years.
a. P4,209.51
b. P5,038.29
c. P3,958.48
d. P4,936.39
1251. A businessman borrowed P300,000 with interest at the rate of 6% compounded semi-annually. He agrees to
discharge his obligation by paying a series of 8 equal semi-annual payments, the first being due at the end of 5.5 years.
Find the semi-annual payment.
a. P69,475.53
b. P57,434.78
c. P73.083.59
d. P40,922.40
View Answer:
1252. A man borrowed P300,000 from a lending institution which will be paid after 10 years at an interest rate of 12%
compounded annually. How much should he deposit to a bank monthly in order to discharge his debt 10 years hence?
a. P2,798.52
b. P3,952.50
c. P4,672.31
d. P5,093.06
View Answer:
1253. What is the accumulated amount of the five year annuity paying P6000 at the end of each year, with interest at
15% compounded annually?
a. P40,454.29
b. P41,114.29
c. P41,454.29
d. P40,544.29
View Answer:
1254. A man owes P12,000 today and agrees to discharge the debt by equal payments at the beginning of each 3
months for 8 years, where this payments include all interest at 8% payable quarterly. Find the quarterly payment.
a. P501.30
b. P602.40
c. P498.20
d. P701.60
View Answer:
1255. A man will deposit P200 with a savings and loan association at the beginning of 3 months for 9 years. If the
association pays interest at the rate of 5.5% quarterly, find the sum to his credit just after the last deposit.
a. P9236
b. P9363
c. P9563
d. P9684
View Answer:
1256. At what interest rate payable quarterly will payments of P500 at the beginning of each 3 months for 7 years
discharge a debt of P12500 due immediately?
a. 3.44%
b. 4.33%
c. 5.44%
d. 6.33%
View Answer:
1257. A P1,000,000 issue of 3% 15 years bonds was sold at 95%. If miscellaneous initial expenses of the financing were
P20,000 and yearly expenses of P2,000 is incurred, what is the true cost the company is paying for the money it
borrowed?
a. 2.6%
b. 4.2%
c. 4.0%
d. 3.8%
View Answer:
1258. A man was offered a Land Bank certificate with a face value of P100,000 which is baring interest of 8% per year
payable semi-annually and due in 6 years. If he wants to earn 6% semi-annually, how much must he pay the certificate?
a. P96,041.92
b. P90,061.49
c. P90,614.92
d. P99,814.92
View Answer:
1259. The National Irrigation Administration undertakes the construction of an irrigation project in the province of
oriental Mindoro which will cover an area of 10,000 hectares and estimated cost P10,000,000 which was borrowed from
the World Bank at the start of the construction. The construction will last 30 years with no salvage value. Bonds will be
paid at 4% per annum compounded annually for 30 years. The construction of project will take 4 years. Insurance
operation and maintenance of the system will cost P120,00 per year. Interest on sinking fund is 6%. How much should
each hectare be charged?
a. P64.65
b. P66.56
c. P60.66
d. P45.65
View Answer:
1260. A company issued 50 bonds of P1,000 face value each redeemable at par at the end of 15 years to accumulate the
funds required for redemption. The firm established a sinking fund consisting of annual deposits, the interest rate of the
fund being 4%. What was the principal in the fund at the end of 12th year?
a. P35,983
b. P38,378
c. P41,453
d. P37,519
View Answer:
1261. An oil well which could produce a net income of P15,000,000 per year for 25 years is being considered to be
purchased by a group of businessman. If the return on investment is targeted to be 20% out of the net income and the
sinking fund at 18% interest is to be established at recover of investment, how much must be paid to the oil well?
a. P70,215,276.17
b. P73,297,198.28
c. P73,921,184.58
d. P75,973,209.26
View Answer:
1262. An investor pays P1,100,000 for a mine which will yield a net income of P200,000 at the end of each year for 10
years and then will become useless. He accumulated a replacement fund to recover his capital by annual investments at
4.5%. At what rate(%) does he receive interest on his investment at the end of each year?
a. 10.04%
b. 8.5%
c. 11.5%
d. 14.5%
View Answer:
1263. A certain marble mine property has an estimated life of 30 years at a projected annual output of 3000 cubic
meters of marble blocks. Estimated management cost per year is placed at P1,500,000 and operating cost of the quarry
and processing plant is P8000 per cubic meter. The finished products, tiles and slabs, can be sold for P12,000 per cubic
meter if exported. Determine the present valuation of the mineral property if the sinking fund rate of interest is 15% and
the annual dividend rate is to be 12%.
a. P85,444,313.27
b. P85,554,371.18
c. P85,854,317.13
d. P85,345,365.28
View Answer:
1264. The annual dividend from a mine will be P75,000 until the ore is exhausted at the end of 30 days, and the mine
becomes useless. Find the price of the mine to yield the investor 6.5%, if he accumulated a replacement fund to restore
his capital by annual investment at 5%.
a. P936,897.63
b. P836,286.39
c. P982,286.29
d. P735,385.53
View Answer:
1265. The privileges of a patent will last for 20 more years and the royalty from it will be P60,000 at the end of each year
during that time. Find the value of his patent rights to an investor who desires interest at 8% on his investment and will
accumulate a capital replacement fund at 5%.
a. P594,297.20
b. P544,254.30
c. P405,384.28
d. P629,289.40
View Answer:
1266. The annual income from the mine is P100,000 and the life of the mine is 20 years. Find the price that an investor is
willing to pay for the mine if he considers that money is worth 5% and if he is to accumulate a sinking fund at 6% in
order to replace the capital he invested.
a. P1,295,595.57
b. P1,995,959.97
c. P1,529,847.29
d. P1,159,287.92
View Answer:
1267. An untreated electric wooden pole that will last 10 years under a certain soil conditions costs P1200. If a treated
pole will last for 20 years, what is the maximum justifiable amount that can be paid for the treated pole, if the maximum
return on investment is 12%? Consider annual taxes and insurance amount to be 1% at first cost.
a. P1,559.50
b. P1995.28
c. P1,593.20
d. P1,959.30
View Answer:
1268. A company must relocate one of its factories in three years. Equipment for the loading dock is being considered
for purchase. The original cost is P20,000,000, the salvage value of the equipment after three years is P8,000. The
company’s rate of return on money is 10%. Determine the capital recovery rate per year.
a. P5115
b. P4946
c. P5625
d. P4805
View Answer:
1269. A new engine will cost P12,000 with an estimated life of 15 years and a salvage value of P800 and guaranteed to
have an operating cost of P3500 per year. The new engine is considered as a replacement of the old one. The old engine
had a total annual cost of P5,200 to operate. Determine the rate of return of the new investment using 6% sinking fund
to recover depreciation, if the old engine could be sold now for P2000.
a. 12.19%
b. 14.29%
c. 10.47%
d. 15.92%
View Answer:
1270. A corporation uses a type of motor truck which costs P5000with a life of 2 years and final salvage value of P800.
How much could the corporation afford to pay for another type of truck of the same purpose for a life of 3 years with a
final salvage value of P1000? Money is worth 4%
a. P8450.66
b. P7164.37
c. P6398.24
d. P9034.56
View Answer:
1271. A granite quarry purchased of P1,600,000 is expected to be exhausted at the end of 4 years. If the resale value of
the land is P100,000, what annual income is required to yield an investment rate of 12%? Use a sinking fund rate of 3%
a. P551,544
b. P552,550
c. P550,540
d. P553,420
View Answer:
1272. A machine has a first cost of P800,000 and a salvage value of P50,000 at the end of its life after 10 years. The
annual saving for the use of the machine amount s to P124,900.97. If the annual maintenance of the machine is P4000
and the sinking fund to recover depreciation earns 6%, compute for the rate of return of investment.
a. 8%
b. 7%
c. 6%
d. 9%
View Answer:
1273. The first cost of a certain equipment is P324,000 and a salvage value of P50,000 at the end of its life of 4 years. If
money is worth 6% compounded annually, find the capitalized cost.
a. P1,367,901.15
b. P1,427,846.17
c. P936,431.16
d. P843,916.27
View Answer:
1274. A multi million project can purchase heavy duty trucks for P600,000 each. It is estimated to have a salvage value of
P60000 at the end of its life which is 10 years. Maintenance and operating cost including the driver is estimated to cost
an average of P3000 per year. The contractor however can hire a similar truck and its operator for P420 per day. If
money is worth 12%, how many days per year must the service of the truck be required to justify the buying of the
trucks. Use annual cost method.
a. 243 days
b. 225 days
c. 252 days
d. 255 days
View Answer:
1275. Each removal from a ditch in city streets is accomplished by a machine loading into trucks. This machine will cost
P20,000 with labor, fuel, oil, and maintenance amounting to P5000 per year. Life of the machine is estimated to be 5
years and no salvage value. The contractor however can hire a similar machine and its operator at P340 per day. How
many days per year must the services of the machine be required to justify the purchase of their new machine of the
money is worth 10%. Use annual cost method.
a. 428 days
b. 248 days
c. 284 days
d. 482 days
View Answer:
1276. A contractor can purchase a heavy-duty truck for P500,000. Its estimated life is 8 years and estimated salvage
value of P6000. Maintenance is estimated to be P2500 annually including the cost of driver and fuel maintenance. The
contractor can hire a similar unit and driver for P750 a day. If interest is taken at 8%, how many days per year must be
services of a dump truck be required to justify the purchase of a truck? Use annual cost method.
a. 112 days
b. 121days
c. 132 days
d. 211 days
View Answer:
1277. It cost P50,000 at the end of each year to maintain a section of Kennon road. If money is worth 10%, how much
would it pay to spend immediately to reduce the annual cost to P10,000?
a. P410,000
b. P554,000
c. P400,000
d. P453,000
View Answer:
1278. If money is worth 12% compounded quarterly, what is the present value of the perpetuity of P1,000 payable
monthly?
a. P453,876.80
b. P100,976.23
c. P342,993.70
d. P100,993.78
View Answer:
1279. Find the present value, in peso, of a perpetuity of P15,000 payable semi-annually if money is worth 8%
a. P372,537
b. P374,977
c. P373,767
d. P371,287
View Answer:
1280. A businessman invested in a medium scale business which cost him P47,000. The net annual return estimated is
P14,000 for each of the next 8 years. Compute the benefit cost ratio if the annual rate of interest is 18%.
a. 1.21
b. 1.76
c. 2.23
d. 1.11
View Answer:
1281. A project costs P100,000. The benefit at the end of each year for a period of 5 years is equal to P40,000. Assuming
money is worth 8% with no salvage value, compute the benefit cost ratio.
a. 1.125
b. 2.124
c. 1.875
d. 1.597
View Answer:
1282. Compute the benefit cost ratio of the following project:
Project cost = P80,000
Gross income = P25,000 per year
Opening Cost = P6,000 per year

Salvage Value = 0
Life of Project = 10 years
Rate of Interest = 12%
a. 1.34
b. 1.78
c. 2.23
d. 1.11
View Answer:
1283. A local factory assembling calculators produces 100 units per month and sells them at P1,800 each. Dividends are
8% on the 8000 shares with par value of P250 each. The fixed operating cost per month is P25,000. Other costs are
P1,000 per unit. Determine the break even point. If only 200 units were produced per month, determine the profit.
a. 50 ; P112,656.67
b. 45 ; P122,676.88
c. 48 ; P121,666.67
d. 48 ; P212,666.67
View Answer:
1284. General Electric Company, which manufactures electric motor, has a capacity of producing 150 motors a month.
The variable costs are P4,000 per month, the average selling price of the motor is P750 per motor. Fixed costs of the
company amounts to P78,000 per month which includes all taxes. Determine the number of motors to be produced per
month to break even and the sales volume in pesos at this point.
a. 105 units
b. 120 units
c. 110 units
d. 115 units
View Answer:
1285. A plywood manufacturer produces a piece of plywood at a labor cost of P0.50 and material at P3.00. The fixed
charges on business are P50,000 a month and the variable cost is P0.50 per piece. If one plywood sells for P6.00 each,
how many pieces must be produced each month for the manufacturer to break even?
a. 27,000
b. 25,000
c. 24,000
d. 22,000
View Answer:
1286. The profit on a product selling for P8.20 is 10% of the selling price. What percentage increase in production cost
will reduce the profit by 60%?
a. 6.67%
b. 6.76%
c. 7.66%
d. 7.66%
View Answer:
1287. A local company assembling stereo radio cassette produces 300 units per month at a cost of P800 per unit. Each
stereo radio cassette sells for P1,200. If the firm makes a profit of 10% on its 10,000 shares with a par value of P200 per
share, and the total fixed cost is P20,000 per month. What is the break even point and how much is the loss or profit if
only 100 units are produced in a given month?
a. 90 ; P3,444.33
b. 91 ; P4,333.44
c. 92 ; P3,333.33
d. 93 ; P4,444.33
View Answer:
1288. A certain operation is now performed by hand, the labor cost per unit is P0.54 and the annual fixed charge for tool
used is estimated at P100 per year. A machine that is being considered for this job will cost P2,400, have a salvage value
of P100 at any time and a fixed annual cost of P200. With it, labor cost is P0.22 per unit. For what number of units of
product per year at zero interest and life of 6 years for the machine will the annual cost of the two methods break even?
a. 1510 units
b. 1050 units
c. 1150 units
d. 1551 units
View Answer:
1289. A shoe manufacturer produces a pair of shoes at a labor cost of P9.00 a pair and a material cost of P8.00 a pair.
The fixed charges on the business is P90,000 a month and the variable cost is P4.00 a pair. If the shoes sells at P30 a pair,
how many pairs must be produced each month for the manufacturer to break even?
a. 10,000
b. 12,000
c. 11,000
d. 13,000
View Answer:
1290. An item which can be sold for P36.00 per unit wholesale is being produced with the following cost data; labor cost,
P10 per unit; material cost, P15.00 per unit; fixed charges, P10,000; variable cost, P8.00 per unit. What is the break even
point sales volume and the break even sales volume if one out of every ten units produced is defective and is rejected
with only full recovery on materials?
a. 322.33 ; 377
b. 345.33 ; 379
c. 353.33 ; 333
d. 333.33 ; 397
View Answer:
capacity. The firm’s annual income is P4,160,000. Annual fixed cost is P1,920,000 and the variable cost is equal to P3.56
per unit of product. What is the firm’s annual profit or loss and what volume of sales does the firm break even?
a. P805,320 ; P3,354,680
b. P850,330 ; P3,543,683
c. P803,550 ; P3,276,398
d. P800,286 ; P3,186,586
View Answer:
1292. The direct labor cost and material cost of a certain product are P300 and P400 per unit, respectively. Fixed charges
are P100,000 per month and other variable costs are P100 per unit. If the product is sold at P1,200 per unit, how many
units must be produced and sold to break even?
a. 200 units
b. 250 units
c. 300 units
d. 260 units
View Answer:
1293. XYZ Corporation manufacturers book cases that it sells for P65.00 each. It costs XYZ P35,000 per year to operate
its plant. This sum includes rent, depreciation charges on equipment and salary payments. If the cost to produce one
bookcase is P50.00, how many cases must be sold each year for XYZ to avoid taking a loss?
a. 2334
b. 539
c. 750
d. 2233
View Answer:
1294. A telephone switchboard 100 pair cable can be made up with either enameled wire or tinned wire. There will be
400 soldered connections. The cost of soldering a connection on the enameled wire will be P1.65, on the tinned wire, it
will be P1.15. A 100 pair cable made up with enameled wire cost P0.55 per lineal foot and those made up to tinned wire
cost P0.76 per lineal foot. Determine the length of cable run in feet so that the cost of each installation would be the
same.
a. 1121.06 ft
b. 1001.25 ft
c. 864.92 ft
d. 952.38 ft
View Answer:
costs are P150 per motor. The average selling price of the motor is P275. Fixed costs of the company amounts to
P20,000 per month which included taxes. The number of motors that must be sold each month to break even is closest
to:
a. 40
b. 150
c. 80
d. 160
View Answer:
1296. Steel drums manufacturer incurs a yearly fixed operating cost of P200,000. Each drum manufactured cost P160 to
produce and sells for P200. What is the manufacturer’s break even sales volume in drum per year? If they could
manufacture 7,000 drums per year, determine the amount of profit or loss.
a. 1250 ; P70,000
b. 2500 ; P60,000
c. 5,000 ; P80,000
d. 1,000 ; P75,000
View Answer:
1297. A new Civil Engineer produces a certain construction ,material at a labor cost of P16.20 per piece, material cost of
P38.50per piece and variable cost of P7.40 per piece. The fixed charges on the business is P100,000 a month. If he sells
the finished product at P95.00 each, how many pieces must be manufactured each month to break even?
a. 3040
b. 3400
c. 3004
d. 4300
View Answer:
1298. A manufacturer produces certain items at a labor cost per unit of P315, material cost per unit of P100, variable
cost of P3.00 each. If the item has a selling price of P995, how many units must be sold to break even if the monthly
overhead is P461,600?
a. 600
b. 700
c. 800
d. 900
View Answer:
1299. A cement firm with production capacity of 130 tons per day (24 hrs) of clinker has its burning zone about 45 tons
of magnesium chrome bricks being replaced periodically, depending on some operational factors and the life of the
bricks. If locally produced bricks cost costing P30,000 per ton and have a life of 6 months, determine the more
economical bricks and by how much?
a. P6,057,000
b. P6,750,000
c. P6,505,000
d. P6,075,000
View Answer:
1300. An equipment installation job in the completion stage can be completed in 40 days of 8 hour day work, with 40
job, overtime not being permitted. If the liquidated damages is P2,000 per day of delay, and the men are paid P80 per
day, how much money would he save if he will add workers?
a. P15,000
b. P15,500
c. P16,500
d. P16,000
1301. A fixed capital investment of P10,000,000 is required for a proposed manufacturing plant and an estimated
working capital of P2,000,000. Annual depreciation is estimated to be 10% of the fixed capital investment. Determine
the rate of return on the total investment and the minimum pay out period if the annual profit is P2,500,000.
a. 20.38% ; 2.68
b. 20.83% ; 2.86
c. 23.80% ; 6.28
d. 23.08% ; 6.66
View Answer:
1302. A 500kw electric lighting plant cost P95 per kw installed. Fixed charges is 14%, operating cost is P0.013 per kw-hr.
The plant averages 150kw for 5000 hour of the year, 420 kw for 1000 hour and 20kw for the remainder. What is the unit
cost of production of electric energy?
a. P0.0184
b. P0.1084
c. P0.1840
d. P0.8104
View Answer:
1303. A mechanical engineer who was awarded a P450,000 contract to install the machineries of an oil mill failed to
finish the work on time. As provided for in the contract, he has to pay a daily penalty equivalent to one fourth of one
percent per day for the next ten days and one percent per day for every day thereafter. If the total penalty was P60750,
how many days was the completion of the contract delayed?
a. 30 days
b. 22 days
c. 26 days
d. 24 days
View Answer:
1304. By selling balut at P5 per dozen, a vendor gains 20%. The cost of the eggs rises by 12.5%. If he sells at the same
price as before, find his new gain %.
a. 5.5%
b. 6.6%
c. 7.7%
d. 7.6%
View Answer:
1305. In a certain department store, the monthly salary of a saleslady is partly constant and partly varies as the value of
her sales for the month. When the value of her sales for the month is P10,000, her salary for that month is P900, when
her monthly sales goes up to P12,000, her monthly salary goes up to P1,000. What must be the value of her sales for the
month so that her salary for that month would be P2,000?
a. P32,000
b. P35,000
c. P30,000
d. P40,000
View Answer:
1306. An equipment installation job in the completion stage can be completed in 50 days of 8 hour day work, with 50
job, overtime not being permitted. If the liquidated damages is P5,00 per day of delay, and the men are paid P150 per
day, how much money would he save with the additional workers?
a. P44570
b. P44750
c. P47540
d. P45407
View Answer:
1307. Jojo bought a second hand Betamax VCR and then sold it to Rudy at a profit of 40%; Rudy then sold the VCR to
Noel at a profit of 20%. If Noel paid P2,856 more than it cost Jojo, how much did Jojo pay for the unit?
a. P2200
b. P4400
c. P2400
d. P4200
View Answer:
1308. Dalisay Corporation’s gross margin is 45% of sales. Operating expenses such as sales and administration are 15% of
sales. Dalisay is in 40% tax bracket. What percent of sales is their profit after taxes?
a. 18%
b. 5%
c. 24%
d. 0%
View Answer:
1309. A manufacturer of sports equipment produces tennis rackets for which there is a demand of 200 per month. The
production setup cost for each lot of racket is O300. IN addition, the inventory carrying cost for each racket is P24 per
year. Using the Economic Order Quantity (EQQ) model, which is the best production batch size fro the rackets?
a. 71 units
b. 173 units
c. 245 units
d. 346 units
View Answer:
a. 1 hour
b. 0.75 hours
c. 3 hours
d. 2.25 hours
View Answer:
1311. A businessman wishes to earn 7% on his capital after payment of taxes. If the income from an available
investment will be taxed at an average of 42%, what minimum rate or return, before payment of taxes, must the
investment offer to be justified?
a. 12.1%
b. 10.7%
c. 11.1%
d. 12.7%
View Answer:
1312. A 200 hp generator is being considered for purchase. The generator will cost P320,000 with a life expectancy of 10
years, with an efficiency of 82%. The maintenance cost per year is P5,000. This generator is used for 300 hours per year
and the cost of fuel, oil is P0.12 per kilowatt-hour. (1 hp = 0.746 kw). Assuming the generator will have no salvage value,
what will be the monthly cost of maintaining the generator?
a. P842.40
b. P962.52
c. P786.40
d. P695.40
View Answer:
1313. An engineer buys a machine costing P500,000. Compute the capitalized cost if the machine has a life of 5 years
and a salvage value of P80,000. Rate of interest is 12% per annum.
a. P2,424,732
b. P1,050,934
c. P2,431,643
d. P5,124,153
View Answer:
1314. A project costing P250,000 yields a yearly benefit of P80,000 for a period of 10 years with no salvage value at an
interest rate of 6%. What is the benefit cost ratio?
a. 4.24
b. 3.85
c. 2.36
d. 4.30
View Answer:
1315. A company constructed its factory with a fixed capital investment of P120M. The net income after the tax and
depreciation is expected to be P23m per year. Annual depreciation cost is 10 % of fixed capital investment. Determine
the payout period in years.
a. 3.04 years
b. 2.54 years
c. 3.43 years
d. 4.85 years
View Answer:
1316. A machinery costing P720,000 is estimated to have a book value of P40,545.73 when retired at the end of 10
years. Depreciation cost is computed using a constant percentage of the declining book value. What is the annual rate of
depreciation?
a. 20%
b. 25%
c. 30%
d. 35%
View Answer:
1317. An asset is purchased for P9,000. Its estimated economic life is 10 years after which it will be sold for P1,000. Find
the depreciation in the first three years using straight line method.
a. P2,400.00
b. P2,412.34
c. P2,250.00
d. P2,450.00
View Answer:
other expenses. The estimated useful life of the equipment is 10 years. The salvage value is x% of the first cost. Using the
straight line method of depreciation, the book value at the end of 5 years will be P291,500. What is the value of x?
a. 20%
b. 40%
c. 30%
d. 10%
View Answer:
1319. The initial cost of a paint sand mill, including its installation is P800,000. The BIR approved life of this machine is 10
P15,000. Using straight line depreciation, what is the annual depreciation charge?
a. P75,500
b. P76,000
c. P76,500
d. P77,000
View Answer:
1320. The initial cost of a paint sand mill, including its installation is P800,000. The BIR approved life of this machine is 10
P15,000. Using straight line depreciation, what is book value of the machine at the end of 6 years?
a. P341,000
b. P343,000
c. P340,000
d. P342,000
View Answer:
depreciation rate by straight line method.
a. 18.89%
b. 19.21%
c. 19.58%
d. 19.89%
View Answer:
1322. A tax and duty free importation of a 30hp sand mill for painting manufacturing cost P360,000. Bank charges and
brokerage cost P5,000. Foundation and installation costs were P25,000. Other incidental expenses amount to P20,000.
Salvage value of the mills estimated to be P60,000 after 20 years. Find the appraisal value of the mill using straight line
depreciation at the end of 10 years.
a. P234,000
b. P235,000
c. P234,500
d. P235,500
View Answer:
a. P721.54
b. P724.56
c. P791.26
d. P721.76
View Answer:
a. P3123.53
b. P3223.75
c. P3434.22
d. P3241.24
View Answer:
1325. An asset is purchased for P12,000. Its estimated economic life is 20 years after which it will be sold for P5,000.
Find the depreciation in the first five years using straight line method.
a. P1,450
b. P1,412
c. P1,250
d. P1,750
View Answer:
year?(P8,000 accumulated)
a. P1298.73
b. P1281.24
c. P1224.97
d. P1862.76
View Answer:
a. P2442.09
b. P1248.24
c. P1883.66
d. P2451.99
View Answer:
1328. Find the ordinary simple interest at 7.5% on P5000 and the corresponding amount at the end of 59 days.
a. P2145.24
b. P2241.12
c. P5061.45
d. P5123.24
View Answer:
1329. Find the exact simple interest at 7.5% on P5000 and the corresponding amount at the end of 59 days.
a. P5187.24
b. P5221.12
c. P5021.45
d. P5060.60
View Answer:
1330.) If P1050 accumulate P1275 when invested at a simple interest for 3 years. What is the rate of interest?
a. 4.21%
b. 5.85%
c. 6.73%
d. 7.14%
View Answer:
1331. Determine the exact simple interest on P5,000 investment for the period from January 15, 1996 to October 12,
1996 of the rate of interest in 18%.
a. P666.39
b. P621.22
c. P632.40
d. P636.29
View Answer:
1332. The exact simple interest of P5000, invested from June 21, 1995 to December 25, 1995, is P100. What is the rate
of interest?
a. 2.4%
b. 3.2%
c. 2.7%
d. 3.9%
View Answer:
1333. The amount of P50,000 was deposited in the bank earning at 7.5% per annum. Determine the total amount at the
end of 5 years if the principle and interest were not withdrawn during the period.
a. P24,257.75
b. P71,781.47
c. P70,024.29
d. P29,240.99
View Answer:
1334. Determine the future amount of P100 for 10.25 years at a rate of 5% compounded monthly.
a. P166.77
b. P224.09
c. P163.12
d. P214.12
View Answer:
1335. Determine the future amount of P100 for 10.25 years at a rate of 5% compounded quarterly.
a. P124.02
b. P166.42
c. P182.42
d. P175.10
View Answer:
1336. Determine the future amount of P100 for 10.25 years at a rate of 5% compounded semi-annually.
a. P153.29
b. P165.90
c. P169.22
d. P173.24
View Answer:
1337. Determine the future amount of P100 for 10.25 years at a rate of 5% compounded daily.
a. P129.24
b. P166.94
c. P195.32
d. P128.87
View Answer:
fourth year, if the annual interest rate is 10%?
a. P717.17
b. P252.91
c. P720.24
d. P287.09
View Answer:
1339. Today a businessman borrowed money to be paid in 10 equal payments for 10 quarters. If the interest rate is 10%
compounded quarterly and the quarterly payment is P2,000, how much did he borrow?
a. P24214.23
b. P24311.53
c. P15125.24
d. P17504.13
View Answer:
1340. What annuity is required over 12 years to equate with a future amount of P20,000? Assume i = 6% annually.
a. P1121.24
b. P1244.22
c. P2314.12
d. P1185.54
View Answer:
1341. Find the annual payment to extinguish a debt of P10,000 payable for 6 years at 12% interest annually.
a. P2214.42
b. P2432.26
c. P2525.24
d. P2044.83
View Answer:
1342. A bond issue of P50,000 in 10 years, bonds in P1000 units paying 10% interest in annual payments, must be retired
by the use of sinking fund which earns 8% compounded annually. What is the total cost for the interest ad retirement of
the entire bond issue.
a. P82,241
b. P84,150
c. P82,214
d. P84,510
View Answer:
1343. Determine the amount of interest you would receive per period if you purchase a 6%, P5000 bond which matures
in 10 years with interest payable quarterly.
a. P24
b. P98
c. P75
d. P52
View Answer:
1344. A corporation floats callable bonds amounting to P100,000 each having a par value of P500, the bond rate is 7.5%
and the bonds are to be retired in 5 years, the annual payments being as nearly equal as possible. What is the total
payment for the whole period of 5 years?
a. P123,625
b. P124,241
c. P214,124
d. P923,124
View Answer:
1345. A book store purchased the best selling book at P200. At what price should this book be sold so that by giving a
20% discount, the profit is 30%.
a. P200
b. P300
c. P400
d. P500
View Answer:
1246. The selling price of a tv set is double that of its net cost. If the tv set is sold to a customer at a profit of 25% of the
net cost, how much discount was given to the customer?
a. 35.8%
b. 37.5%
c. 34.5%
d. 44.5%
View Answer:
a. 1 hour
b. 2 hours
c. 3 hours
d. 4 hours
View Answer:
1348. Mahusay Corporation’s gross margin is 55% of sales. Operating expenses such as sales and administration are 5%
of sales. Mahusay is in 40% tax bracket. What percent of sales is their profit after taxes?
a. 20%
b. 30%
c. 40%
d. 50%
View Answer:
1349. How much money must you invest in order to withdraw P5000 annually for 20 years if the interest rate is 12%?
a. P37,347.22
b. P23,325.23
c. P38,243.29
d. P27,124.09
View Answer:
1350. If interest is at rate of 10% compounded semi-annually, what sum must be invested at the end of each 6 months
to accumulate a fund of P12,000 at the end of 8 years?
a. P507.24
b. P451.24
c. P247.24
d. P694.92

Engineering Economics 2023

Uploaded by

Copyright:

Available Formats

Engineering Economics 2023

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Engineering Economics 2023

Uploaded by

Copyright:

Available Formats

1. First Benchmark Publishing’s gross margin is 50% of sales.

The operating costs of the publishing are estimated at 15%

19. Which of these gives the lowest effective rate of interest?

A. The construction of the building now to cost P 400,000

55. What are the two classifications of goods and services?

59. What is considered as the basic consuming or demanding unit of a commodity?

67. Oligopoly exists when there is/are:

68. Duopsony is a market situation where there is/are:

69. Duopoly is a market situation where there is/are:

70. What is another term for “perfect competition”?

73. What is the opposite of perfect competition?

74. Perfect monopoly exists only if:

83. One banker’s year is equivalent to ______ days.

97. Which is NOT an essential element of an ordinary annuity?

102. What type of bond is issued jointly by two or more corporations?

117. The declining balance method is also known as ______.

120. The functional depreciation is sometimes called ______.

122. What are the common methods of computing depletion charge?

130. Salvage value is sometimes known as ______.

138. Capitalized cost of a project is also known as ______.

143. What is the factor name of the formula (1+i)^-n?

144. What is the factor name of the formula [i(1+i)^n]/[((1+i)^n)-1]?

147. What is the simplest form of business organization?

148. Double taxation is a disadvantage of which business organization?

149. In case of bankruptcy of a partnership,

150. Which is true about partnership?

151. Which is true about corporation?

158. What refers to the claim of anyone to ownership?

160. What represents the share of participation in business organizations?

163. Which of the following is an example of intangible asset?

166. What is another term for “current assets”?

167. What is an accounting term that represents an inventory account adjustment?

169. What is used to record historical financial transactions?

171. The original record of a business transaction is recorded in this book.

176. What do you call a one-time credit against taxes?

186. Capitalized cost of any structure or property is computed by which formula?

188. Return on investment ratio is the ratio of the:

189. Gross margin is the ratio of the gross profit to ______.

190. What is another term for “acid-test ratio”?

195. The ability to convert assets to cash quickly is known as ______.

196. What is the basic accounting equation?

198. What is an index of short-term paying ability?

199. The common ratio is the ratio of:

201. What is the ratio of the quick assets to current liabilities?

203. Receivable turnover is the ratio of:

204. What is the ratio of the net income to owner’s equity?

206. What is the profit margin ratio?

207. What is a gross margin?

209. What is an inventory turnover?

210. The average age of receivables is computed using which formula?

214. What is defined as ratio of its return to its cost?

215. Which of the following is an accelerated depreciation method?

216. What is an accelerated depreciation method?

222. What is the ratio of the net income to owner’s equity?

228. The actual interest earned by a given principal is known as?

231. It is the worth of a property as shown on the accounting records.

237. What the property is worth to the owner as an operating unit.

246. Which is NOT an essential element of an ordinary annuity?