Engineering Economics MCQs

Question 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?

Accepted Answer

21 %

Answer

20 %

Answer

19 %

Answer

18 %

Question 2

The construction estimate of a project is used by:

Accepted Answer

All of these

Answer

The owner of the facility

Answer

The consulting architect/engineer

Answer

The contractor of the project

Question 3

Pick up the correct statement regarding financial statement analysis from the following.

Accepted Answer

All the above

Answer

Final analysis always involves the use of various financial statements i.e., balance sheet and income statement

Answer

The balance sheet is the summary of assets, liabilities and owner's equity of business at a point in time

Answer

The income statement is the summary of revenues and expenses of a firm over a particular period of time

Question 4

Pick up the correct statement from the following:

Accepted Answer

All of these

Answer

A NPV profile graph shows the curvilinear relationship between the net present value of the project and discount rate employed

Answer

In a NPV profile, if discount rate is zero, then net present value is simply total cash inflows less the total cash outflows of the project

Answer

As the discount rate increases, the net present value profile slopes downward to the right

Question 5

Pick up the correct statement from the following:

Accepted Answer

All the above

Answer

An annuity is a series of equal payments occurring at equal period of time

Answer

Annuity is called an equal payment or uniform payment series

Answer

An annuity may have periods of time of any length but should always be of equal length

Question 6

Pick up the correct method adopted for developing the approximate or conceptual estimates from the following:

Accepted Answer

All of these

Answer

Base unit method

Answer

Cost per function method

Answer

Cost per square metre

Question 7

Pick up the element of the cost from the following:

Accepted Answer

All of these

Answer

Direct material

Answer

Direct labour

Answer

Over head

Question 8

Pick up the correct statement from the following:

Accepted Answer

All of these

Answer

Engineering economy is a collection of mathematical techniques which simplify economic comparisons

Answer

Engineering economy is a decision assistance tool by which one method will be chosen as the most economically one

Answer

For understanding the engineering economy, one should be able to classify the basic terminology and fundamental concepts of economy

Question 9

Pick up the ratio which gives us sufficient information by which to judge the financial condition and performance of the firm, from the following:

Accepted Answer

None of these

Answer

Liquidity ratio

Answer

Financial leverage ratio

Answer

Activity ratio