# Practice Test: Question Set - 01

**1. In a cash flow series:**

- (A) Uniform
gradient signifies that an income or disbursement changes by the same amount in
each interest period

- (B) Either an increase or decrease in the amount of a cash flow is called the gradient

- (C) The gradient
in the cash flow may be positive or negative

- (D) All of these

**2. In a cash-flow diagram:**

- (A) Time 0 is
considered to be the present

- (B) Time 1 is
considered to be the end of time period 1

- (C) A vertical
arrow pointing up indicates a positive cash flow

- (D) All of these

**3. Which method is adopted to develop an approximate or conceptual estimate for perimeter works for buildings from the following?**

- (A) Base unit
method

- (B) Cost per
function method

- (C) Cost per
square metre method

- (D) Cost per
linear metre method

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

- (A) The ratio of
current assets, loans and advances, and the current liquidity is called current
ratio

- (B) Larger the
current ratio, larger is the margin of safety

- (C) The operating profit is the difference between gross profit and operating expenses

- (D) All of these

**5. The ratio of current assets to current liabilities is known as**

- (A) Liquidity
ratio

- (B) Current
ratio

- (C) Acid-Test
(or Quick) ratio

- (D) Debts ratio

**6. In the cash-flow diagram shown in the given figure**

- (A) Equal
deposits of Rs 3000 per year (A) are made, starting now

- (B) The rate of
interest is 10% per year account

- (C) The amount accumulated after the seventh deposit is to be computed

- (D) All of these

**7. The more critical (or severe) test of the firm's liquidity can be judged by:**

- (A) Liquidity
ratio

- (B) Current
ratio

- (C) Acid-Test
(or Quick) ratio

- (D) Debts ratio

**8. If interest is paid more than once in a year, ‘**

*i’*is the rate of interest per year, ‘*n’*is the number of periods in years and ‘*m’*is a number of periods per years, compound amount factor (CAF) is:- (A) (1 +

*i*/

*m*)

^{n}- (B) (1 +

*i*/

*n*)

^{m}- (C) (1 +

*i*/

*n*)

^{1/m}

- (D) (1 +

*i*/

*m*)

^{1/n}

**9. Pick up the correct reason for making conceptual (or preliminary) estimate from the following:**

- (A) To have a check on a definitive cost estimate

- (B) To check quotations from contractors and/or sub-contractors

- (C) To compute target estimate for the owner while drawing and specifications are in initial stage

- (D) All of these

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

- (A) Base unit
method

- (B) Cost per
function method

- (C) Cost per
square metre

- (D) All of these

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