ENGINEERING ECONOMICS

1. The amount paid for the money which has been loaned is called _____.
a. Discount c. Proceeds
b. Principal d. Interest

2. A fixed income investment that represent a loan made by an investor to a borrower

a. Stocks c. Bonds
b. Annuity d. Loan

3. _____ is determined by dividing Annual Interest Payment by the par value of the investment
a. Nominal Yield c. Current Market Price
b. Current Yield d. Maturity Value

4. Type of annuity where the first period payment is made several periods after the beginning of the annuity
a. Deferred Annuity c. Perpetuity
b. Ordinary Annuity d. Annuity Due

5. Payments are made at the beginning of each period for _____.

a. Deferred Annuity c. Perpetuity
b. Ordinary Annuity d. Annuity Due

6. The decrease in the value of a physical property due to the passage of time
a. Annuity c. Inflation
b. Depreciation d. Discount

7. The price that can be obtained from the sale of a second hand property
a. Sale Price c. Salvage value
b. Discount Price d. Scrap value

8. The length of time during which the property may be operated at a profit
a. Economic life c. Scrap Life
b. Physical Life d. Salvage Life

9. Inflation is the decrease in _____ power of money.

a. loaning c. selling
b. buying d. none of the above

10. A series of equal payments occurring at equal intervals of time

a. Annuity c. Depreciation
b. Interest d. Proceeds

11. Buying at a stock market entitles owner to a proportion of the corporation’s asset and profits equal to how much
stock they own. Units of stocks are called _____.
a. Shares c. Bonds
b. Debts d. Credit

12. What is the effective interest rate of 10% compounded monthly?

a. 10% c. 10.47%
b. 8.92% d. 11.32%

13. Michael needs Php 10,000 for the renovation of their house. If he will apply for a discounted one year loan at a
simple interest rate of 10% per year, how much should he apply for??
a. 11,000.00 c. 10,000.00
b. 11,111.11 d. 10,785.62
14. A man bought a Lancer EVO for Php 960,000.00 on an installment basis at the rate of 15% per annum on the
unpaid balance. If he paid a downpayment of Php 200,000 .00 cash and proposed to pay the balance in 36
monthly installments, his monthly payments would be?
a. 30,611.11 c. 25,890.45
b. 36,300.05 d. 33,230.00

15. A school bought an advance photocopier machine set for P50,000. Other expenses including delivery and set-up
amounted to P5,000. The machine is guaranteed to work for 15 years and may be sold for P500 as scrap later on.
How much is the accumulated depreciation at the 10th year.
a. 36,333.33 c. 42,986.45
b. 30,354.23 d. 40,000.00