# Practice Test: Question Set - 03

**1. Pick up the correct statement from the following:**

- (A) An
annuity is a series of equal payments occurring at equal period of time

- (B) Annuity
is called an equal payment or uniform payment series

- (C) An
annuity may have periods of time of any length but should always be of equal
length

- (D) All the
above

**2. The sunk costs include:**

- (A) A past
expenditure

- (B) An
unrecovered balance

- (C) An invested
capital that cannot be retrieved

- (D) All of these

**3. Pick up the element of the cost from the following:**

- (A) Direct
material

- (B) Direct
labour

- (C) Over head

- (D) All of these

**4. The ratio obtained by dividing 'quick assets' by current liabilities is called**

- (A) Turnover
ratio

- (B) Acid test
ratio

- (C) Solvency
ratio

- (D) None of
these

**5. The construction estimate of a project is used by:**

- (A) The owner of
the facility

- (B) The
consulting architect/engineer

- (C) The
contractor of the project

- (D) All of these

**6. Pick up the correct statement from the following:**

- (A) The ratios
which show profitability in relation to sales and those which show
profitability in relation to investment are called profitability ratios

- (B) The ratio of
gross profit and net sales is called profitability in relation to sales ratio

- (C) The ratio of
net profit after taxes to total assets is known as profitability in relation to
investment ratio

- (D) All of these

**7. The product of CAF (**

*S P*) and PWF (*S P*) is:- (A) 1/2

- (B) 1

- (C) 1/3

- (D) 1/4

**8. Which one of the following is not a construction estimate?**

- (A) Initial
feasibility estimate

- (B) Conceptual
preliminary budget

- (C) Definite
estimate

- (D) None of
these

**9. If ‘**

*P’*is principal amount, ‘*I’*is the rate of interest per annum and ‘*n’*is the number of periods in years, the compound amount factor (CAF) is:- (A) (1 +

*i*)

^{n}- (B) (1 +

*i*)

^{(1/2n)}

- (C) √(

*n*+

*i*)

- (D) None of
these

**10. If ‘**

*P’*is principal amount, ‘*i’*is the rate of interest and ‘*n’*is the number of periods in years, then the interest factor is:- (A) (1 +

*ni*)

- (B) (

*ni*- 1)

- (C)

*ni*

- (D) None of
these

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