1. Engineering economics is mainly concerned with

a) IRR

b) ERR

c) B/C ratio

d) profit

2. A series of equal payments occurring at equal period of time to obtain a certain amount is called

a) fixed deposit

b) equal deposit

c) annuity

d) all of the above

3. In a project equal investment is done for future value then it is called a) future investment

b) capital recovery

c) sinking fund

d) all of the above

4. The point or situation when the production of material is jus tsufficient to consumption then it is called

a) equivalent point

b) break even point

c) satisfaction point

d) all of the above

5. Which one is correct with respect to break even point?

a) income should be equal to expenses

b) import should be equal to export

c) supply should be equal to demand

d) all of the above

6. If production is less than break even point, the product will be

a) lesser than consumption

b) equal to consumption

c) greater than consumption

d) all of the above

7. The non-human ingredients that contribute to the production of goods and services, including land, raw and semi finished materials, tools, building machinery and inventories

a) future investment

b) capital recovery

c) sinking fund

d) capital

8. If the amount of principal are same then the value of compound interest is for same time period

a) less than simple interest

b) more than simple interest

c) equal to the simple interest

d) all of the above

9. If P= Rs. 1000, r=8%, Time = 5 yrs find the simple interest.

a) Rs.300 c) Rs.500

b) Rs. 400

d) Rs. 600

10. For the Q.No. 9 compound interest should be

a) Rs.369

b) Rs.469

c) Rs.569

d) Rs.669

11. If one has taken Rs. 1000 from bank & pays Rs. 1050 in a year, what is the interest rate?

a) 5%

b) 10%

c) 15%

d) 12%

12. The types of interest that is periodically added to the amount of investment so that subsequent interest is based on the cumulative amount.

a) simple interest

b) compound interest

c) differential interest

d) equal interest

13. The sum of principal and compound interest is known as the compound amount which is computed by the formula

14. The relation between nominal interest rate and effective interest rate (i) is given by

15. Find the effective interest rate if the interest rate is 10% which is compounded 3 times per year.

a) 10.11%

b) 10.22%

c) 10.33%

d) 10.44%

16. Inflation is normal phenomenon in which

a) nominal price of object is raised

b) nominal price of the object is decreased

c) nominal price of object is constant

d) none of the above

17. Two projects having same status except pay back period Which project will be selected?

a) the project having more pay back period

b) the project having less pay back period

c) the project having equal investment

d) all of the above

18. The number of years required for the net operating benefits to payback the initial cost of the project is called

a) operating period

b) service period

c) pay back period

d) maintenance period

19. Pay back period is counted only after

a) tendering for the project

b) starting of the construction of the project

c) completion of the construction of the project

d) commissioning of the project

20. Benefit cost ratio is the ratio of

21. Find the B/C ratio if project cost = NRs. 10000000, economic life of project is 30 years and i=10%, annual benefit = NRS. 1500000, O&M cost = 2% of capital cost.

a) 1.16

b) 1.17

c) 1.18

d) 1.19

22. For the selection of a project B/C ratio should be

a)-ve

b) +ve

c) >1

d) 0

23. The benefit cost ratio is

a) directly proportional to discount rate

b) inversely proportional to discount rate

c) no any relation with discount rate

d) all of the above

24. The minimum value of benefit-cost ratio for the selection of any project should be

a) less than one

b) one

c) greater than one

d) none of the above

25 As the benefit cost ratio of a project increases the attractiveness of project increases. But minimum value ofbenefit cost ratio should be……..for acception of project.

a) less than one

b) equal to one

c) greater than one

d) all of the above