Engineering Economy online Practice Test - Set 02

Practice Test: Question Set - 02


1. Ratio analysis of a construction firm is used for analysis by:
    (A) Share holders
    (B) Firm's management
    (C) Banks of the firm
    (D) Financial analysts

2. Current assets less inventories divided by current liabilities is known as
    (A) Liquidity ratio
    (B) Current ratio
    (C) Acid-Test (or Quick) ratio
    (D) Debts ratio

3. Refer to the cash flow diagram of uniform gradient in a cash flow (in the given figure), the gradient is:
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    (A) Rs. 10000 per year
    (B) Rs. 15000 per year
    (C) Rs. 20000 per year
    (D) Rs. 25000 per year

4. Pick up the correct statement from the following:
    (A) The change in the amount of money over a given time period is called 'time value' of money, a most important concept in engineering economy
    (B) The manifestation of the time value of money is termed as interest
    (C) Interest on borrowing = present amount owed - original loan
    (D) All of these

5. Which one of the following questions is relevant to the construction estimates?
    (A) Did the estimators precisely evaluate site conditions
    (B) Did the estimators use short cut methods which may be unrealistic in their situation
    (C) How much money will the contractor's risk, loosing if he were to submit bid on the raw estimate of cost
    (D) All of these

6. Both architect and engineer make use of the cost estimate of the project:
    (A) For site selection
    (B) For designing of the project
    (C) For choosing alternatives
    (D) All of these

7. Pick up the ratio which gives us sufficient information by which to judge the financial condition and performance of the firm, from the following:
    (A) Liquidity ratio
    (B) Financial leverage ratio
    (C) Activity ratio
    (D) None of these

8. The interest calculated on the basis of 365 days a year, is known as:
    (A) Interest
    (B) Ordinary simple interest
    (C) Exact simple interest
    (D) None of these

9. The project contractor relies on the cost of the estimate:
    (A) For submission of a competitive bid for a lump-sum contract
    (B) For a unit price contract
    (C) For preparation of a definitive estimate to help negotiate contract
    (D) All of these

10. If a seller recovers his capital along with accumulated compensating interest not in one single lump-sum payment but in periodical equal payments, over time:
    (A) Capital Recovery Annuity fs availed
    (B) Present work Annuity is availed
    (C) Sinking Fund Annuity is availed
    (D) Sinking Fund Annuity is availed

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