MCQOPTIONS
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MCQOPTIONS
This section includes 79 Mcqs, each offering curated multiple-choice questions to sharpen your Information systems and engineering economics knowledge and support exam preparation. Choose a topic below to get started.
| 51. |
An organisation's plans are usually most specific at what level? |
| A. | the top |
| B. | the middle |
| C. | the bottom |
| D. | they should be essentially equal in specificity at all levels of the organisation |
| Answer» E. | |
| 52. |
A centralised system keeps decision making firmly at the top of the hierarchy |
| A. | true |
| B. | false |
| C. | not applicable |
| D. | don’t know |
| Answer» B. false | |
| 53. |
If the inflation rate is 6% per year and the market interest rate is known to be 15% per year. What is the implied real interest rate in this inflationary economy? |
| A. | 0.1145 |
| B. | 0.09 |
| C. | 0.08 |
| D. | 0.0849 |
| Answer» E. | |
| 54. |
The average starting salary for engineers for 2008 is $53,000. What is the equivalent salary in terms of purchasing power of 2000? Assume that the general inflation rate over the last 8 years is known to be 4%. |
| A. | 34980 |
| B. | 38727 |
| C. | 72534 |
| D. | 40276 |
| Answer» D. 40276 | |
| 55. |
The current gasoline price is $4.15, and it is projected to increase next year by 5%, and 8% the following year, and -3% the third year. What is the average inflation rate for the projected gasoline price for the next 3 years? |
| A. | 0.0323 |
| B. | 0.0333 |
| C. | 0.0533 |
| D. | 0.03 |
| Answer» B. 0.0333 | |
| 56. |
Consider a machine that costs $20,000 and has a five-year useful life.At the end of the five years, it can be sold for $4,000 after all tax adjustments have been factored in. If the firm could earn an after-tax revenue of $4,400 per year with this machine, should it be purchased at an interest rate of 10%? (All benefits and costs associated with the machine are accounted for in these figures.) |
| A. | -220.76 |
| B. | -200 |
| C. | -240 |
| Answer» B. -200 | |
| 57. |
Consider the following two investment alternatives:Suppose that your firm needs either machine for only 2 years. The net proceeds from the sale of machine B are estimated to be $200. What should be the required net proceeds from the sale of machine A so that both machines could be considered economically indifferent at an interest rate of 10%? |
| A. | 850 |
| B. | 700 |
| C. | 750 |
| D. | 800 |
| Answer» D. 800 | |
| 58. |
Inflation is a loss in the purchasing power of money over time. |
| A. | true |
| B. | false |
| Answer» B. false | |
| 59. |
CPI does not take into the account the price of raw material, finished product and operating cost |
| A. | true |
| B. | false |
| Answer» B. false | |
| 60. |
Consider a project with a first cost (investment) of $250,000, an annual O&M cost of $50,000, annual revenue of $160,000, and a salvage value of $40,000 after a 10-year life. Find the annual worth of the project assuming an interest of 13% per year. |
| A. | 35867 |
| B. | 81000 |
| C. | 82445 |
| D. | 66099 |
| Answer» E. | |
| 61. |
You are considering purchasing a $1,000 bond with a coupon rate of 9.5%, interest payable annually. If the current inflation rate is 4% per year, which will continue in the foreseeable future, what would be the real rate of return if you sold the bond at $1,080 after 2 years? |
| A. | about 9.5% |
| B. | about 13.26% |
| C. | about 9.26% |
| D. | about 8.9% |
| Answer» E. | |
| 62. |
For an employee in receipt of hostel |
| A. | rs.10, 800 |
| B. | rs.7,200 |
| C. | rs.9,600 |
| D. | rs.3,600 |
| Answer» C. rs.9,600 | |
| 63. |
Find the annual equivalent worth for the following infinite cash flow series at an interest rate of 10%: |
| A. | 461.2 |
| B. | 445.2 |
| C. | 985.4 |
| D. | 438.6 |
| Answer» E. | |
| 64. |
The rate of tax that is leivable on STCG |
| A. | 0.1 |
| B. | 0.15 |
| C. | 0.2 |
| D. | 0.3 |
| Answer» C. 0.2 | |
| 65. |
For an industrial undertaking fulfilling the |
| A. | rs.75,000 |
| B. | rs.1,50,000 |
| C. | rs.1,00,000 |
| D. | none of the above |
| Answer» D. none of the above | |
| 66. |
You are considering buying an old house that you will convert into an office building for rental. Assuming that you will own the property for 10 years, how much would you be willing to pay for the old house now given the following financial data? |
| A. | 250100 |
| B. | 232316 |
| C. | 201205 |
| D. | 218420 |
| Answer» E. | |
| 67. |
The following infinite cash flow series has a rate of return of 10%. Determine the unknown value of X. |
| A. | 120 |
| B. | 100 |
| C. | 82 |
| D. | 90 |
| Answer» E. | |
| 68. |
A manufacturing company is considering two mutually exclusive machines E1 and E2 with the following cash flow information:Which machine would you recommend if the company needs either machine for only 3 years? Assume a MARR of 12% |
| A. | project e1 |
| B. | indifferent |
| C. | cannot compare without knowing the year-end salvage values over their service lives |
| D. | project e2 |
| Answer» E. | |
| 69. |
51. XYZ Ltd is engaged in production of textile articles. Opening WDV of the block of assets was Rs.` 15, 00,000. During the year, plant was acquired under this block on 15th June 2018 amounting to Rs.` 10, 00,000. One of the asset falling within the block was sold for Rs. ` 5, 50,000 on 14-01- 2019. Rate of depreciation of the block is 15%. |
| A. | a. rs.` 2,92,500 |
| B. | b. rs.`4,92,500 |
| C. | c. rs.` 3,92,500 88 |
| D. | d. rs.` 3,52,500 |
| Answer» C. c. rs.` 3,92,500 88 | |
| 70. |
47. DS acquired a building for Rs. ` 15 lakh in June, 2016 in addition to cost of land beneath the building of ` 3 lakh. It was used for personal purposes until he commenced business in June, 2018 and since then |
| A. | a. rs.` 1,50,000 |
| B. | b. rs.` 75,000 |
| C. | c. rs.` 37,500 |
| D. | d. rs.` 1,21,500 |
| Answer» D. d. rs.` 1,21,500 | |
| 71. |
A fund created by making periodic deposits (usually equal) at compound interest in order to accumulate a given sum at a given future time for some specific purpose is sinking fund |
| A. | true |
| B. | false |
| Answer» B. false | |
| 72. |
If you deposit P dollars today for N periods at i, you will have F dollars at the end of period N. |
| A. | true |
| B. | false |
| Answer» B. false | |
| 73. |
A plan for receipts or disbursements (An) that yields a particular cash flow pattern over a specified length of time is called monthly equal payment |
| A. | true |
| B. | false |
| Answer» B. false | |
| 74. |
A fund accumulated by periodic deposits and reserved exclusively for a specific purpose, such as retirement of a debt |
| A. | sinking fund |
| B. | principal |
| C. | interest |
| Answer» B. principal | |
| 75. |
Your R&D group has developed and tested a computer software package that assists engineers to control the proper chemical mix for the various process manufacturing industries. If you decide to market the software, your first year operating net cash flow is estimated to be |
| A. | 2887776 |
| B. | 2766344 |
| C. | 2047734 |
| D. | 2507621 |
| Answer» D. 2507621 | |
| 76. |
Economic equivalence refers to the fact that a cash flow-whether a single payment or a series of payments-can be converted to an equivalent cash flow at any point in time. |
| A. | true |
| B. | false |
| Answer» B. false | |
| 77. |
Gene Research, Inc. just finished a 4-year R&D and clinical trials successfully and expects a quick approval from the Food and Drug |
| A. | $524 million |
| B. | $105 million |
| C. | $420 million |
| D. | $494 million |
| Answer» B. $105 million | |
| 78. |
Satisfaction is defined as positive feelings people have about an organisation whether as a/an |
| A. | supplier, employee, customer, or regulator |
| B. | employer, customer, regulator, or supplier |
| C. | investor or stockbroker |
| D. | none of the above |
| Answer» B. employer, customer, regulator, or supplier | |
| 79. |
Definable groups of people who have an economic and/or social interest in the organisation are called |
| A. | stakeholders |
| B. | employees |
| C. | managers |
| D. | all of the above |
| Answer» B. employees | |