Civil engineer objective questions – Engineering Economics (Section-4)

76. FIRR of a project should be

a) greater than borrowing rate

b) lesser than borrowing rate

c) equal to borrowing rate

d) none of the above

77. As indirect cost of project increases, the profit of project

a) increases

b) decreases

c) constant

d) all of the above

78. In project selection ERR should be

a) >0

b)-ve

c) none of the above

d) all of the above

79. Expected output of anyproject should be……………to theinvestment of any investor.

a) directly proportional

b) inversely proportional

c) constant

d) none of the above

80. In economical equilibrium analysis

a) revenue equal to cost

b) revenue greater than cost

c) revenue less than cost

d) none of the above

81. Break even analysis is the limited form of

a) sensitivity analysis

b) cost analysis

c) benefit analysis

d) none of the above

82. Amount of money payable to a beneficiary at a regular intervals for a prescribed period of time out of a fund reservedfor the purpose is

a) interest

b) principle amount

c) annuity

d) none of the above

83. A review of management processes and the associated documentation is commonly called:

a) audit

b) inspection

c) testing and measuring

d) screening

84. Annual series of amounts for a period equivalent to the cash inflows and/or cash outflows, computed with deduction of expenses and capital recovery receipts is:

a) annual worth

b) annual loss

c) annual profit

d) present worth

85. A technique that measures the change in the profitability of a project caused by changes in the factors that affect the cash inflows of the project is called:

a) capital analysis

b) cost benefit analysis

c) sensitivity analysis

d) risk analysis

86. Costs which are independent of output and no alteration by the change in production level are called:

a) fixed costs

b) production costs

c) total costs

d) variable costs

87. Net Present Value (NPV) is defined as the total present value (PV) of…………of cash flows.

a) a parallel series

b) gross amount

c) net amount

d) a time series

88. Discounting is the process of..

a) deducting the equal periodic payments

b) determining the future value of a cash flow

c) finding the present value of a cash flow

d) finding the series of equal periodic payments

89. The financial analysis helps to judge:

a) the operational efficiency of the firm

b) the financial position of the firm

c) both of the above

d) none of the above

90. The rate on the unrecovered balance of the investment in a situation where the terminal balance is zero:

a) minimum rate of return

b) external rate of return

c) internal rate of return

d) maximum rate of return

91. If the investment a firm makes would…………….firm, it means that NPV<0.

a) add ..value from the

b) subtract

c) multiply

d) none of the above

92. Which of the following has least significance in Benefit Cost Analysis of a Public Project?

a) identification of relevant benefits and costs

b) measurement of benefits and costs

c) calculation of pay back period

d) treatment of uncertainty

93. Costs that are not borne by the parties to the economic… ..are called ‘externalities’.

a) gain

b) transaction

c) transfer

d) loss

94. In the process of selecting public project the criteria usually adopted are:

a) economic evaluation

b) financial evaluation

c) economic and financial evaluation

d) profitability evaluation

95. The ratio obtained by dividing quick assets by current liabilities is called:.

a) turnover ratio

b) acid test ratio

c) solvency ratio

d) none of the above

96. The ratio of current assets to current liabilities is known as

a) liquidity ratio

b) current ratio

c) B/C ratio

d) profit

97. Sensitivity analysis is

a) the ration of benefits to costs using either preen worth or annual cash flow calculation

b) condition under which the alternatives are equivalent

c) examination of range of values for some parameters to determine their effect on a particular decision

d) to change one to many estimate to see what the results is

98. Mostly used risk analysis technique in engineering economics is

a) sensitivity analysis

b) breakeven analysis

c) scenario analysis

d) monte-carlo simulation

99. The main objectives of sensitivity analysis of a project is to examine the

a) productivity

b) profitability

c) uncertainly

d) sustainability

100. The benefit that is forgone by engaging the resource in a chosen activity instead of engaging the same resource in the forgone activity is known as:

a) marginal cost

b) opportunity cost

c) incremental cost

d) life cycle cost

101.The sunk cost includes

a) a past expenditure

b) an unrecovered balance

c) an invested capital that cannot be retrieved

d) all of the above

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