Engineering Economy Online Exam Questions - Set 05

Practice Test: Question Set - 05


1. The construction manager uses the estimate of the project
    (A) To tell the owner of the project to take his/her financial decision
    (B) To control the project during its construction
    (C) To develop bids on the project
    (D) All of these

2. A construction estimate is used
    (A) To judge tentatively or approximate value of the project
    (B) To produce a statement of the approximate cost
    (C) To decide an approximation of the value of the project and not the exact cost
    (D) None of these

3. Pick up the correct statement from the following:
    (A) The financial ratio summarizes some aspect of the firm's financial condition at the time of preparing a balance sheet
    (B) Both the numerator and denominator of financial ratios come directly from the balance sheet
    (C) Income statement ratios compare a flow item from the income statement to another flow item form the income statement
    (D) All of these

4. The annuity which refers to a debt payment for recovering the initial amount or capital in equal periodical payments, is known as;
    (A) Present Worth Annuity
    (B) Sinking fund annuity
    (C) Compound annuity
    (D) Capital recovery annuity

5. The owner of the construction company makes use of the estimate:
    (A) To determine the capital investment costs
    (B) To assist in financial arrangements
    (C) To determine economic feasibility of the project
    (D) All of these

6. Annuities involve:
    (A) A series of payments
    (B) All payments of equal amount
    (C) Payment at equal time intervals
    (D) All of these

7. The estimate based on a detailed quantity survey and furnishes the most accurate and reliable estimate possible is known as
    (A) Conceptual estimate
    (B) Definitive estimate
    (C) Probabilistic estimate
    (D) None of these

8. Pick up the correct statement regarding financial statement analysis from the following.
    (A) Final analysis always involves the use of various financial statements i.e., balance sheet and income statement
    (B) The balance sheet is the summary of assets, liabilities and owner's equity of business at a point in time
    (C) The income statement is the summary of revenues and expenses of a firm over a particular period of time
    (D) All the above

9. Probabilistic estimating of a construction project includes:
    (A) Labour
    (B) Productivity
    (C) Wage scale
    (D) All of these

10. Pick up the correct statement from the following:
    (A) The capital required to get a project started, is called first cost
    (B) The costs associated with a new or existing project that remain unaffected by the changes in activity level over the normal range of operation of the project, are called fixed costs
    (C) The group of costs that vary proportionately to the changes in the activity level of a new or existing project are called variable costs
    (D) All of these

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