The alternatives which are standalone solutions for given situations in engineering involve :

the anticipated life of the assest

the yearly costs of maintaining the assest (annual maintenance and operating cost)

the anticipated resaleable value (salvage value) and the interest return (rate of return)

Refer to the cash flow diagram of uniform gradient in a cash flow (in the given figure), the gradient is :

Income statement ratios compare one 'flow' item from the income statement to another flow item from the income statement.

Income statement ratios compare a flow item from the income statement to another flow item form the income statement

The sunk costs include :

an invested capital that cannot be retreived

In the cash flow diagram shown in the given figure

The first disbursement occurs at the end of year 2

The second disbursement occurs at the end of year 4

The first receipt occurs at the end of year 1

The second receipt occurs at the end of year 3

The construction manager uses the estimate of the project

to tell the owner of the project to take his/her financial decision.

to advise the architect/engineer regarding design cost parameter especially in value engineering analysis.

to develop bids on the project.

to control the project during its construction.

The construction estimate of a project is used by :

the consulting architect/engineer

In the cash-flow diagram shown in the given figure

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

The rate of interest is 10% per yearaccount

The amount accumulated after the seventh deposit is to be computed

The financial analysis helps to judge:

The operational efficiency of the firm

The financial position of the firm.

payment at equal time intervals

payments at the end of periods.

A project construction cost estimate includes:

the equipment and over head cost

The project contractor relies on the cost of the estimate :

for submission of a competitive bid for a lumpsum contract

for preparation of a definitive estimate to help negotiate contract.

The CRF (ep) is also known as: [CRF(EP) - 8% - 7], where

8% is the rate of interest per year

money is borrowed for n = 7 years

In a cash flow series :

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

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

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

The financial analysis :

helps a share holder to compare the expected return on his investment in the firm against the expected return from other alternative investment.

helps a bank to know the financial position of the firm for granting a loan to the firm.

helps to judge the success of the firm's financial plans.

The owner of the construction company makes use of the estimate :

to determine the capital investment costs.

to assist in financial arrangements

to determine economic feasibility of the project.

to determine the tax, insurance and evaluation purpose.

The key to profitable operation for project cost control, is :

To keep the project cost equal to original cost estimate.

To keep the project cost equal to subsequent construction budget.

To keep the project cost within the cost budget and knowing when and where job costs are deviating.

In a cash-flow diagram :

Time 0 is considered to be the present

Time 1 is considered to be the end of time period 1

A vertical arrow pointing up indicates a positive cash flow

An arrow pointing downward indicates a negative cash flow

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

To have a check on a definitive cost estimate.

To check qoutations from contractors and/or sub contractors.

To compute target estimate for the owner while drawings and specifications are in initial stage.

A construction estimate is used

to judge tentatively or approximate value of the project

to produce a statement of the approximate cost

to decide an approximation of the value of the project and not the exact cost.

Pick up the correct statement regarding financial statement analysis from the following.

Final analysis always involves the use of various financial statements i.e., balance sheet and income statement.

The balance sheet is the summary of assests, liabilities and owner's equity of business at a point in time.

The income statement is the summary of revenues and expenses of a firm over a particular period of time.

Which one of the following definitions, is correct ?

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

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 amount of interest charges for the period, is called interest coverage ratio.

Each financial ratio is generally compared by

a past ratio calculated from the past financial standard of the firm.

a ratio developed by using the projected financial statement of the firm.

a ratio of some selected firms most progressive and successful at the point of consideration.

If a seller recovers his capital along with accumulated compensating interest not in one single lumpsum payment but in periodical equal payments, over time :

Present work Annuity is availed

Capital Recovery Annuity fs availed

Present work Annuity is availed

Sinking Fund Annuity is availed

252 + Mcqs in Engineering Economy in Civil Engineering Page 5 McqOptions

201.	The alternatives which are standalone solutions for given situations in engineering involve :
A.	a purchase cost (first cost)
B.	the anticipated life of the assest
C.	the yearly costs of maintaining the assest (annual maintenance and operating cost)
D.	the anticipated resaleable value (salvage value) and the interest return (rate of return)
Answer» E.

Discussion

202.	Refer to the cash flow diagram of uniform gradient in a cash flow (in the given figure), the gradient is :
A.	Income statement ratios compare one 'flow' item from the income statement to another flow item from the income statement.
B.	Income statement ratios compare a flow item from the income statement to another flow item form the income statement
C.	All of these
D.	Rs 10000 per year
Answer» E.

Discussion

203.	If S is the future capital accumulated in n years at the rate of interest i per annum, then present worth is :
A.
B.	S(1 + i)n
C.	S(1 + i)1/n
Answer» B. S(1 + i)n

Discussion

204.	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.	Portability
Answer» E.

Discussion

205.	The sunk costs include :
A.	a past expenditure
B.	an unrecovered balance
C.	an invested capital that cannot be retreived
D.	All of these
Answer» E.

Discussion

206.	Keeping in view, the feasibility order of magnitude, the preliminary, conceptual or budget estimates, are prepared by :
A.	architect/engineer
B.	construction manager
C.	owner himself/herself
D.	construction manager
Answer» D. construction manager

Discussion

207.	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
Answer» B. (1 + i)(1/2n)

Discussion

208.	The person desires to pay off the amount in 10 equal annual instalments. The amount of each instalment is :
A.	Rs 5638
B.	Rs 6638
C.	Rs 7738
D.	None of these
Answer» B. Rs 6638

Discussion

209.	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
Answer» E.

Discussion

210.	In the cash flow diagram shown in the given figure
A.	The first disbursement occurs at the end of year 2
B.	The second disbursement occurs at the end of year 4
C.	The first receipt occurs at the end of year 1
D.	The second receipt occurs at the end of year 3
Answer» E.

Discussion

211.	Pick up the method used for project evaluation and selection in capital budgetting from the following:
A.	pay back period
B.	Internal ratio of return
C.	Net present worth
D.	Profitability index
Answer» E.

Discussion

212.	The construction manager uses the estimate of the project
A.	to tell the owner of the project to take his/her financial decision.
B.	to advise the architect/engineer regarding design cost parameter especially in value engineering analysis.
C.	to develop bids on the project.
D.	to control the project during its construction.
Answer» E.

Discussion

213.	Renu Bala deposits Rs 1200 now, Rs 800 two years from now and Rs 1000 five years from now. If the savings bank's rate of interest in 5%, she will receive an amount of Rs X 10 years from now, where X is
A.	Rs 3415
B.	Rs 4225
C.	Rs 4413
D.	Rs 4826
Answer» D. Rs 4826

Discussion

214.	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
Answer» E.

Discussion

215.	The annuity which refers to a debt payment for recovering the initial amount or capital in equal periodical payments, is known as;
A.	Present Worth Annuity
B.	Sinking fund annuity
C.	Compound annuity
D.	Capital recovery annuity
Answer» E.

Discussion

216.	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
Answer» D. None of these

Discussion

217.	If a is the base amount expenditure, b is the increase in the operation cost each year over a period of n years, the total cost of maintenance is :
A.	a + (n + 1) b
B.	a + (n - 1) b
C.	a x (n - 1) b
D.	a - (n - 1) b
Answer» C. a x (n - 1) b

Discussion

218.	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 yearaccount
C.	The amount accumulated after the seventh deposit is to be computed
D.	All of these
Answer» E.

Discussion

219.	The financial analysis helps to judge:
A.	The operational efficiency of the firm
B.	The financial position of the firm.
C.	Both (a) and (b)
D.	Neither (a) nor (b)
Answer» D. Neither (a) nor (b)

Discussion

220.	The wages of supervisors and material handlers are charged as :
A.	Over head
B.	direct labour cost
C.	indirect labour cost
D.	None of these
Answer» B. direct labour cost

Discussion

221.	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 cubic metre method
Answer» E.

Discussion

222.	Annuities involve:
A.	a series of payments
B.	all payments of equal amount
C.	payment at equal time intervals
D.	payments at the end of periods.
Answer» E.

Discussion

223.	A project construction cost estimate includes:
A.	the labour and material cost
B.	the equipment and over head cost
C.	the profit of the contractor
D.	All of these
Answer» E.

Discussion

224.	The project contractor relies on the cost of the estimate :
A.	for submission of a competitive bid for a lumpsum contract
B.	for a unit price contract
C.	for preparation of a definitive estimate to help negotiate contract.
D.	All of these
Answer» E.

Discussion

225.	The CRF (ep) is also known as: [CRF(EP) - 8% - 7], where
A.	8% is the rate of interest per year
B.	money is borrowed for n = 7 years
C.	both (a) and (b)
D.	Neither (a) nor (b)
Answer» D. Neither (a) nor (b)

Discussion

226.	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
Answer» B. (ni - 1)

Discussion

227.	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 a 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
Answer» E.

Discussion

228.	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
Answer» E.

Discussion

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

Discussion

230.	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.	Cost per linear unit
Answer» E.

Discussion

231.	The financial analysis :
A.	helps a share holder to compare the expected return on his investment in the firm against the expected return from other alternative investment.
B.	helps a bank to know the financial position of the firm for granting a loan to the firm.
C.	helps to judge the success of the firm's financial plans.
D.	All of these.
Answer» E.

Discussion

232.	The owner of the construction company makes use of the estimate :
A.	to determine the capital investment costs.
B.	to assist in financial arrangements
C.	to determine economic feasibility of the project.
D.	to determine the tax, insurance and evaluation purpose.
Answer» E.

Discussion

233.	The key to profitable operation for project cost control, is :
A.	To keep the project cost equal to original cost estimate.
B.	To keep the project cost equal to subsequent construction budget.
C.	To keep the project cost within the cost budget and knowing when and where job costs are deviating.
D.	None of these
Answer» D. None of these

Discussion

234.	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.	An arrow pointing downward indicates a negative cash flow
Answer» E.

Discussion

235.	Probabilistic estimating of a construction project includes:
A.	Labour
B.	Productivity
C.	wage scale
D.	All of these
Answer» E.

Discussion

236.	Present worth Annuity (PWA) is generally known as
A.	Premium annuities
B.	Income annuities
C.	Future annuities
D.	All of these
Answer» E.

Discussion

237.	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 qoutations from contractors and/or sub contractors.
C.	To compute target estimate for the owner while drawings and specifications are in initial stage.
D.	All of these.
Answer» E.

Discussion

238.	A construction estimate is used
A.	to judge tentatively or approximate value of the project
B.	to produce a statement of the approximate cost
C.	to decide an approximation of the value of the project and not the exact cost.
D.	None of these
Answer» D. None of these

Discussion

239.	The product of CAF (S P) and PWF (S P) is:
A.	43497
B.	1
C.	43525
D.	43556
Answer» C. 43525

Discussion

240.	Pick up the correct statement regarding financial statement analysis from the following.
A.	Final analysis always involves the use of various financial statements i.e., balance sheet and income statement.
B.	The balance sheet is the summary of assests, liabilities and owner's equity of business at a point in time.
C.	The income statement is the summary of revenues and expenses of a firm over a particular period of time.
D.	All the above
Answer» E.

Discussion

241.	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
Answer» E.

Discussion

242.	Which one of the following is included in financial ratios of the firm ?
A.	Profitability ratio
B.	Liquidity ratio
C.	Turnover ratio
D.	Ratio of overall performances
Answer» E.

Discussion

243.	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
Answer» D. Debts ratio

Discussion

244.	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.
C.	The ratio of earnings before interest and taxes for a particular reporting period to the amount of interest charges for the period, is called interest coverage ratio.
D.	All of these
Answer» E.

Discussion

245.	Each financial ratio is generally compared by
A.	a past ratio calculated from the past financial standard of the firm.
B.	a ratio developed by using the projected financial statement of the firm.
C.	a ratio of some selected firms most progressive and successful at the point of consideration.
D.	All of these
Answer» E.

Discussion

246.	Pick up the element of the cost from the following:
A.	direct material
B.	direct labour
C.	Over head
D.	All of these
Answer» E.

Discussion

247.	The ratio of current assests to current liabilities is known as
A.	Liquidity ratio
B.	Current ratio
C.	Acid-Test (or Quick) ratio
D.	Debts ratio
Answer» C. Acid-Test (or Quick) ratio

Discussion

248.	The ratio obtained by dividing 'quick assests' by current liabilities is called
A.	Turnover ratio
B.	Acid test ratio
C.	Solvency ratio
D.	None of these.
Answer» C. Solvency ratio

Discussion

249.	The estimate based on a detailed quantity survey and furnishes the most accurate and reliable estimate possible is known as
A.	Conceptual estimate
B.	Definitive estimate
C.	Probabilistic estimate
D.	None of these
Answer» C. Probabilistic estimate

Discussion

250.	If a seller recovers his capital along with accumulated compensating interest not in one single lumpsum 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
Answer» B. Present work Annuity is availed

Discussion

Explore topic-wise MCQs in Civil Engineering.

The alternatives which are standalone solutions for given situations in engineering involve :

Refer to the cash flow diagram of uniform gradient in a cash flow (in the given figure), the gradient is :

If S is the future capital accumulated in n years at the rate of interest i per annum, then present worth is :

Pick up the ratio which gives us sufficient information by which to judge the financial condition and performance of the firm, from the following:

The sunk costs include :

Keeping in view, the feasibility order of magnitude, the preliminary, conceptual or budget estimates, are prepared by :

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 person desires to pay off the amount in 10 equal annual instalments. The amount of each instalment is :

Which one of the following is not a construction estimate ?

In the cash flow diagram shown in the given figure

Pick up the method used for project evaluation and selection in capital budgetting from the following:

The construction manager uses the estimate of the project

Renu Bala deposits Rs 1200 now, Rs 800 two years from now and Rs 1000 five years from now. If the savings bank's rate of interest in 5%, she will receive an amount of Rs X 10 years from now, where X is

The construction estimate of a project is used by :

The annuity which refers to a debt payment for recovering the initial amount or capital in equal periodical payments, is known as;

The interest calculated on the basis of 365 days a year, is known as :

If a is the base amount expenditure, b is the increase in the operation cost each year over a period of n years, the total cost of maintenance is :

In the cash-flow diagram shown in the given figure

The financial analysis helps to judge:

The wages of supervisors and material handlers are charged as :

Which method is adopted to develop an approximate or conceptual estimate for perimeter works for buildings from the following:

Annuities involve:

A project construction cost estimate includes:

The project contractor relies on the cost of the estimate :

The CRF (ep) is also known as: [CRF(EP) - 8% - 7], where

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 :

In a cash flow series :

Ratio analysis of a construction firm is used for analysis by :

Current assests less inventories divided by current liabilities is known as

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

The financial analysis :

The owner of the construction company makes use of the estimate :

The key to profitable operation for project cost control, is :

In a cash-flow diagram :

Probabilistic estimating of a construction project includes:

Present worth Annuity (PWA) is generally known as

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

A construction estimate is used

The product of CAF (S P) and PWF (S P) is:

Pick up the correct statement regarding financial statement analysis from the following.

Both architect and engineer make use of the cost estimate of the project:

Which one of the following is included in financial ratios of the firm ?

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

Which one of the following definitions, is correct ?

Each financial ratio is generally compared by

Pick up the element of the cost from the following:

The ratio of current assests to current liabilities is known as

The ratio obtained by dividing 'quick assests' by current liabilities is called

The estimate based on a detailed quantity survey and furnishes the most accurate and reliable estimate possible is known as

If a seller recovers his capital along with accumulated compensating interest not in one single lumpsum payment but in periodical equal payments, over time :