.

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 un realistic in their situation ?

How much money will the contractor's risk, loosing if he Were to submit bid on the raw
C.
estimate of cost.

D. All of these
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2. The ratio obtained by dividing 'quick assests' by current liabilities is called

A. Turnover ratio

ENGINEERING ECONOMICS B. Acid test ratio

C. Solvency ratio

D. None of these.
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3. Which one of the following definitions, is correct ?

A. The ratio of total debt to share holder's equity is called 'debt ratio'.

B. The ratio debt-to-total assests is called Debt-to-total assest ratio.

The ratio of earnings before interest and taxes for a particular reporting period to the
C.
amount of interest charges for the period, is called interest coverage ratio.

D. All of these
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4. Pick up the element of the cost from the following:

A. direct material

B. direct labour

C. Over head

D. All of these
5. The estimator for definitive estimates must be able :
A. and an all-around construction expert.

to read the plans and specifications to determine accurate quantities of permanent

B.
materials and installed Equipment.

to express the job material requirements in dimensions suitable for costing and
construction supplies.
C.
6. Pick up the correct statement from the following: 9. Refer to the cash flow diagram of uniform gradient in a cash flow (in the given figure), the
The change in the amount of money over a given time period is called 'time value' of gradient is :
A.
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. The original investment (or loan) is referred to as principal.

E. All of these.
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A. Rs 10000 per year

7. Which one of the following is included in financial ratios of the firm ?
A. B. Rs 15000 per year
Profitability ratio

B. Liquidity ratio C. Rs 20000 per year

C. Turnover ratio D. Rs 25000 per year

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D. Ratio of overall performances

E. All of these
10. In the cash-flow diagram shown in the given figure
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8. Pick up the correct statement from the following:

The financial ratio summarises some aspect of the firm's financial condition at the time
A.
of preparing a balance sheet.

Both the numerator and denominator of financial ratios come directly from the balance
B.
sheet.

Income statement ratios compare one 'flow' item from the income statement to A. Equal deposits of Rs 3000 per year (A) are made, starting now.
C.
another flow item from the income statement.
B. The rate of interest is 10% per yearaccount
Income statement ratios compare a flow item from the income statement to another
D. C. The amount accumulated after the seventh deposit is to be computed
flow item form the income statement
D. All of these
E. All of these
11. The estimate based on a detailed quantity survey and furnishes the most accurate and
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reliable estimate possible is known as
A. Conceptual estimate

B. Definitive estimate

C. Probabilistic estimate

D. None of these
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12. The sunk costs include : View Answer Discuss in Forum Workspace Report
A. a past expenditure

B. an unrecovered balance 17. Pick up the correct statement from the following:

C. an invested capital that cannot be retreived A. An annuity is a series of equal payments occurring at equal period of time.

D. All of these B. Annuity is called an equal payment or uniform payment series.

View Answer Discuss in Forum Workspace Report An annuity may have periods of time of any length but should always be of equal
C.
length.

D. All the above.

13. Current assests less inventories divided by current liabilities is known as
A. Liquidity ratio View Answer Discuss in Forum Workspace Report

B. Current ratio
18. The construction estimate of a project is used by :
C. Acid-Test (or Quick) ratio
A. the owner of the facility
D. Debts ratio
B. the consulting architect/engineer
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C. the contractor of the project

14. Which one of the following statements is correct?

D. All of these
The number of years required to recover the initial cash investment in a project, is
A. View Answer Discuss in Forum Workspace Report
called Pay Back period (PBP).

The discount rate that equates the present value of the expected Net Cash Flows
B.
(CFs) with the Initial Cash Outflow (ICO) is known as internal rate of return. 19. Both architect and engineer make use of the cost estimate of the project:
The present value of the proposal's net cash flows, less the proposal's initial cash A. for site selection
C.
outflow is known as the Net Present Value (NPV)
B. for designing of the project
D. All of these
C. for choosing alternatives
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D. All of these
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15. The alternatives which are standalone solutions for given situations in engineering involve :
A. a purchase cost (first cost)
20. If a is the base amount expenditure, b is the increase in the operation cost each year over a
B. the anticipated life of the assest period of n years, the total cost of maintenance is :
C. the yearly costs of maintaining the assest (annual maintenance and operating cost) A. a + (n + 1) b

D. the anticipated resaleable value (salvage value) and the interest return (rate of return) B. a + (n - 1) b

E. All of these C. a x (n - 1) b

16. The ratio of current assests to current liabilities is known as D. a - (n - 1) b

A. Liquidity ratio 21. The more critical (or severe) test of the firm's liquidity can be judged by :
B. Current ratio A. Liquidity ratio

C. Acid-Test (or Quick) ratio B. Current ratio

D. Debts ratio C. Acid-Test (or Quick) ratio

 D. Debts ratio The costs associated with a new or existing project that remain unaffected by the
B. changes in activity level over the normal range of operation of the project, are called
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fixed costs.

The group of costs that vary proportionately to the changes in the activity level of a
C.
22. Ratio analysis of a construction firm is used for analysis by : new or existing project are called variable costs.
A. share holders
D. All of these
B. firm's management View Answer Discuss in Forum Workspace Report

C. Banks of the firm

D. financial analysts 27. Present worth Annuity (PWA) is generally known as

A. Premium annuities
E. All of these.
View Answer Discuss in Forum Workspace Report B. Income annuities

C. Future annuities

23. Pick up the correct statement from the following: D. All of these
View Answer Discuss in Forum Workspace Report
A.

28. Pick up the ratio which gives us sufficient information by which to judge the financial
B. Over head cost per unit = Overhead ratio x direct labour cost/unit
condition and performance of the firm, from the following:
C. both (a) and (b) A. Liquidity ratio

D. neither (a) nor (6) B. Financial leverage ratio

View Answer Discuss in Forum Workspace Report C. Activity ratio

D. Portability
24. Probabilistic estimating of a construction project includes:
E. None of these
A. Labour
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B. Productivity

C. wage scale
29. Pick up the correct statement from the following:
D. All of these The ratios which show profitability in relation to sales and those which show
A.
View Answer Discuss in Forum Workspace Report 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.

25. A construction estimate is used The ratio of net profit after taxes to total assests is known as profitability in relation to
C.
investment ratio
A. to judge tentatively or approximate value of the project
D. All of these
B. to produce a statement of the approximate cost
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C. to decide an approximation of the value of the project and not the exact cost.

D. None of these
30. The financial analysis helps to judge:
26. Pick up the correct statement from the following:
A. The operational efficiency of the firm
A. The capital required to get a project started, is called first cost.
B. The financial position of the firm.
 C. Both (a) and (b) All financial ratios are obtained by relating two sets of information contained in a
B.
Single financial statement.
D. Neither (a) nor (b)
31. If interest is paid more than once in a year, i is the rate of interest per year, n is the number The relationship between two accounting figures expressed mathematically, is known
C.
of periods in years and m is a number of periods per years, compound amount factor (CAF) as a financial ratio.
is : D. All of these
View Answer Discuss in Forum Workspace Report
A.

35. Pick up the correct statement from the following:

B. The ability of a company to meet obligations which are likely to mature in short term, is
A.
called liquidity.

The liquidity ratio may be defined as a relationship of current liabilities and current
B.
assests and advances.
C.
C. The liquidity ratios are used to indicate the financial position of the firm.

D. All of these
D.
6. The capital Recovery Factor (equal payments) of Capital Recovery Annuity is :
View Answer Discuss in Forum Workspace Report
A.

32. In a cash flow series :

B.
uniform gradient signifies that an income or disbursement changes by the same
A.
amount in each interest period.

B. Either an increase or a decrease in the amount of a cash flow is called the gradient. C.

C. The gradient in the cash flow may be positive or negative.

D. None of these.
D. All of these View Answer Discuss in Forum Workspace Report
View Answer Discuss in Forum Workspace Report

37. Current ratio is :

33. 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.
A. (1 + ni)

B. (ni - 1) B.
C. ni

D. None of these C.
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D. None of these.

34. Pick up the correct statement from the following: View Answer Discuss in Forum Workspace Report

Ratio analysis is the procedure of determining and interpreting numerical relationship

A.
of various items of the financial statement.
38. The interest calculated on the basis of 365 days a year, is known as : D. None of these
A. interest View Answer Discuss in Forum Workspace Report
B. ordinary simple interest

C. exact simple interest 43. The annuity which refers to a debt payment for recovering the initial amount or capital in
equal periodical payments, is known as;
D. None of these
A. Present Worth Annuity
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B. Sinking fund annuity

C. Compound annuity
39. If S is the future capital accumulated in n years at the rate of interest i per annum, then
present worth is : D. Capital recovery annuity
View Answer Discuss in Forum Workspace Report
A.

B. S(1 + i)n 44. The product of CAF (S P) and PWF (S P) is:

C. S(1 + i)1/n A. 1/2

D. None of these. B. 1

View Answer Discuss in Forum Workspace Report C. 1/3

D. 1/4
40. In a cash-flow diagram : View Answer Discuss in Forum Workspace Report
A. Time 0 is considered to be the present

B. Time 1 is considered to be the end of time period 1 45. Pick up the correct reason for making conceptual (or preliminary) estimate from the following:

C. A vertical arrow pointing up indicates a positive cash flow A. To have a check on a definitive cost estimate.

D. An arrow pointing downward indicates a negative cash flow B. To check qoutations from contractors and/or sub contractors.

E. All of these To compute target estimate for the owner while drawings and specifications are in
C.
initial stage.
41. Each financial ratio is generally compared by
A. a past ratio calculated from the past financial standard of the firm. D. All of these.
46. Pick up the correct statement from the following:
B. a ratio developed by using the projected financial statement of the firm.
A NPV profile graph shows the curvilinear relationship between the net present value
A.
a ratio of some selected firms most progressive and successful at the point of of the project and discount rate employed.
C.
consideration.
In a NPV profile, if discount rate is zero, then net present value is simply total cash
B.
D. All of these inflows less the total cash outflows of the project.
View Answer Discuss in Forum Workspace Report As the discount rate increases, the net present value profile slopes downward to the
C.
right.

42. The key to profitable operation for project cost control, is : D. All of these

A. To keep the project cost equal to original cost estimate. View Answer Discuss in Forum Workspace Report

B. To keep the project cost equal to subsequent construction budget.

47. The project contractor relies on the cost of the estimate :
To keep the project cost within the cost budget and knowing when and where
C. A. for submission of a competitive bid for a lumpsum contract
job costs are deviating.
 B. for a unit price contract 2. Which method is adopted to develop an approximate or conceptual estimate for perimeter
works for buildings from the following:
C. for preparation of a definitive estimate to help negotiate contract. A. Base unit method
D. All of these B. Cost per function method
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C. Cost per square metre method

D. Cost per cubic metre method

48. The wages of supervisors and material handlers are charged as :
E. Cost per linear metre method
A. Over head
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B. direct labour cost

C. indirect labour cost

3. Pick up the correct method adopted for developing the approximate or conceptual estimates
D. None of these from the following :
View Answer Discuss in Forum Workspace Report A. Base unit method

B. Cost per function method

49. The CRF (ep) is also known as: [CRF(EP) - 8% - 7], where C. Cost per square metre
A. 8% is the rate of interest per year
D. Cost per linear unit
B. money is borrowed for n = 7 years
E. All of these
C. both (a) and (b) View Answer Discuss in Forum Workspace Report

D. Neither (a) nor (b)

View Answer Discuss in Forum Workspace Report 4. The financial analysis :
helps a share holder to compare the expected return on his investment in the firm
A.
against the expected return from other alternative investment.
50. Annuities involve:
A. a series of payments B. helps a bank to know the financial position of the firm for granting a loan to the firm.

B. all payments of equal amount C. helps to judge the success of the firm's financial plans.

C. payment at equal time intervals D. All of these.

View Answer Discuss in Forum Workspace Report
D. payments at the end of periods.

E. All of these
5. Pick up the correct statement regarding financial statement analysis from the following.
1. If a seller recovers his capital along with accumulated compensating interest not in one
single lumpsum payment but in periodical equal payments, over time : Final analysis always involves the use of various financial statements i.e., balance
A.
sheet and income statement.
A. Capital Recovery Annuity fs availed
The balance sheet is the summary of assests, liabilities and owner's equity of
B. Present work Annuity is availed B.
business at a point in time.
C. Sinking Fund Annuity is availed The income statement is the summary of revenues and expenses of a firm over a
C.
particular period of time.
D. Sinking Fund Annuity is availed
View Answer Discuss in Forum Workspace Report D. All the above
. The owner of the construction company makes use of the estimate :
A. to determine the capital investment costs.
 B. to assist in financial arrangements View Answer Discuss in Forum Workspace Report

C. to determine economic feasibility of the project.

10. Pick up the correct statement from the following:
D. to determine the tax, insurance and evaluation purpose.
The ratio of current assests, loans and advances, and the current liquidity is called
A.
E. All of these current ratio.
View Answer Discuss in Forum Workspace Report B. Larger the current ratio, larger is the margin of safety.

C. The operating profit is the difference between gross profit and operating expenses.
7. Which one of the following is not a construction estimate ?
D. All of these
A. Initial feasibility estimate
11. A project construction cost estimate includes:
B. Conceptual preliminary budget A. the labour and material cost
C. Definite estimate B. the equipment and over head cost
D. None of these C. the profit of the contractor
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D. All of these
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8. Pick up the correct statement from the following:

12. In the cash flow diagram shown in the given figure

A.
Uniform series compound amount factor =

B.
Uniform series present worth factor =

C.
Sinking fund factor = A. The first disbursement occurs at the end of year 2

B. The second disbursement occurs at the end of year 4

D.
C. The first receipt occurs at the end of year 1
Capital recovery factor = where letters carry their usual meanings.
D. The second receipt occurs at the end of year 3
E. All of these
View Answer Discuss in Forum Workspace Report E. All of these
View Answer Discuss in Forum Workspace Report

9. Pick up the method used for project evaluation and selection in capital budgetting from the
following: 13. Pick up the correct statement from the following:
A. pay back period A. The receipts and disbursements in a given time interval are referred to as cash flow.
B. Internal ratio of return The assumptions that all cash flows occur at the end of the interest period, is known
B.
C. Net present worth as the end of period convention.

C. A cash flow diagram is a graphical representation of cash flows drawn on a time scale.
D. Profitability index

E. All the above

 The cash flow diagram represents the statement of the problem and also includes View Answer Discuss in Forum Workspace Report
D.
what is given and what is to be found.

E. All of the above. 18. Keeping in view, the feasibility order of magnitude, the preliminary, conceptual or budget
View Answer Discuss in Forum Workspace Report estimates, are prepared by :
A. architect/engineer

B. construction manager
14. The person desires to pay off the amount in 10 equal annual instalments. The amount of
each instalment is : C. owner himself/herself
A. Rs 5638
D. construction manager
B. Rs 6638
E. None of these
C. Rs 7738
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D. None of these
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19. The construction manager uses the estimate of the project
A. to tell the owner of the project to take his/her financial decision.
15. Renu Bala deposits Rs 1200 now, Rs 800 two years from now and Rs 1000 five years from to advise the architect/engineer regarding design cost parameter especially in value
now. If the savings bank's rate of interest in 5%, she will receive an amount of Rs X 10 years B.
engineering analysis.
from now, where X is
A. Rs 3415 C. to develop bids on the project.

B. Rs 4225 D. to control the project during its construction.

C. Rs 4413 E. All of these

View Answer Discuss in Forum Workspace Report
D. Rs 4826
16. Pick up the correct statement from the following:
A. The capital required to get a project started is the first cost. 20. 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 :
The first cost is a single cash flow or a series of cash flows that are made in the
B. A. (1 + i)n
beginning of the activity's life span
B. (1 + i)(1/2n)
The first cost of purchasing a car is the sum of the down payment, taxes and dealers
C.
charges. C. (n + i)
D. All of these D. None of these
View Answer Discuss in Forum Workspace Report 21. Liquidity ratios are used :
A. to measure a firms ability to meet short-cut obligations.
17. Pick up the correct statement from the following: to compare short term obligations to short-term resources available to meet these
B.
Engineering economy is a collection of mathematical techniques which simplify obligations.
A.
economic comparisons
to obtain much insight into the present cash solvency of the firm and the firm's ability
C.
Engineering economy is a decision assistance tool by which one method will be to remain solvent in the event of adversity.
B.
chosen as the most economically one.
D. All of these
For understanding the engineering economy, one should be able to classify the basic View Answer Discuss in Forum Workspace Report
C.
terminology and fundamental concepts of economy.

D. All of these.
22. Earning per share is the most important ratio for
A. share holders

B. banks

C. company's management

D. All of these
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23. Pick up the correct statement from the following:

The difference between sales revenue and cost of goods sold, is known as 'Gross
A.
Profit.'

B. The gross profit percentage is the average profit margin obtained on goods sold.

C. The relationship of contribution to sales is known as contribution ratio

D. The difference between sales and variable cost of sales, is called contribution.

E. All of these
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24. Pick up the main purpose of project cost control from the following :
A. To signal immediate warning of uneconomic operations

B. To provide a feed back to the estimator

C. To promote cost consciousness

D. All of these