Civil engineer objective questions – Engineering Economics (Section-5)

102. For any project to be feasible:

a) future work should be negative

b) present work should be positive

c) annual work should be equal to zero

d) payback period should be equal to less than 5 years

103.Net present value (NPV) is a term widely used in:

a) cost benefit ratio

b) internal rate of return

c) project cost analysis

d) none of the above

104.For a Government funded development project the mostimportant factor to considered is:

a) cost benefit

b) social and political benefit

c) job creation

d) economic rate of return

105. If two projects are mutually exclusive then :

a) the one with the higher NPV should be chosen

b) the one with the positive NPV should be chosen

c) the one with negative NPV should be chosen

d) rejects both the projects

106. The discount rate that makes the net present value equalto zero is known as:

a) break even point

b) internal rate of return

c) external rate of return

d) none of above

107. Which of the following is not direct cost for a project?

a) wages of lab our

b) cost of materials

c) insurance cost

d) sun contract cost

108. The internal rate of return (IRR) is a rate of return used incapital budgeting to measure and compare the ………. of investments

a) vulnerability

b) subtract

c) multiply

d) none of these

109. Costs which are independent of output and no alteration by the change is production level are called

a) fixed costs

b) production costs

c) total costs

d) variable costs

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

a) capital recovery annuity

b) present worth annuity

c) sinking fund annuity

d) compound annuity

111.IRR is carried out for

a) evaluation the progress of the project

b) evaluating the desirability of investment of projects

c) evaluation the profit of project

d) none of the above

112.Another name for Net Present Value (NPV) is

a) accounting rate of return

b) Net present worth

c) payback period

d) economic rate of return

113. 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

114. In economic marginal cost is the change in total cost that

a ) 100 units arises when the quantity produced changes by

b ) 0.01 unit

c ) 0.1 unit

d ) 1 unit

115. The additional money received from selling one more

a ) normal cost unit at a specified level of output is

b ) marginal revenue

c ) average revenue

d ) equivalent revenue

116. If the investments a firm makes would…… value from the firm , it means that NPV < 0 .

a ) add

b ) subtract

c ) multiply

d ) none of these

117.Using benefit cost ratio analysis , the project is said to be feasible if:

a ) C / B < 1

b ) B / C < 1

c ) C / B > 1

d ) B / C = 1

118.If the percentage fall in quantity demanded is greater than the percentage rise in price charged

a ) the revenue will rise

b ) the revenue will fall

c ) is not related with discount rate

d ) none of the above

119.The most unpredictable cost of a project is

a ) environment management cost

b ) under ground construction cost

c ) transportation cost

d ) social management cost

120. For a financial institution the most important study of a project to be taken for risks management is :

a ) appraisal

b ) environmental and social

c ) technical

d ) financial and economical

121.The decession rule for project acceptance is that :

a ) if IRR > 0

b ) if IRR > MARR

c ) if IRR = 0

d ) if IRR>= MARR

122. Prime cost of a project includes

a ) direct material cost

b ) direct labour cost

c ) direct expe nses

d ) all of the above

123. Excessive spending power of consumers that pulls prices up is called :

a ) demand – pull inflation

b ) cost – pull inflation

c) cost-push inflation

d) demand-push inflation

124. Which among the following is not true about benefit cost analysis?

a) cost and benefits must be converted to a common time base

b) a public project is normally acceptable if the B-C ratio is atleast one

c) the analysis makes sure that the benefits are at least 10-20%more than the costs

d) the B-C ratio is a ratio of discounted benefits to discountedcosts

125.In economic analysis a shift in the supply curve is said to

take place due to

a) change in input prices

b) technological progress

c) level of competition in production

d) all of the above

126.In economics, the change in total cost that arises when the quantity produced changes by one unit is called:

a) variable cost

b) added cost

c) marginal cost

d) cost without profit

127. The ratio analysis of a construction firm is used for the analysis by:

a) financial analysis

b) share holders of the firm

c) management groups of construction firms d) all of the above

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