Economics for Engineers (3140911) MCQs

MCQs of Cash Flow, Interest and Equivalence

Showing 71 to 80 out of 85 Questions
5 6 7 8 9
71.
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 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 above
Answer:

Option (d)

72.
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) All of above
Answer:

Option (d)

73.
If interest is paid more than once in a year, what will be compound amount factor (CAF)?
Where
i = Rate of interest per year
n = Number of periods in years
m = Number of periods per years
(a) (1 + i/m)n
(b) (1 + i/n)m
(c) (1 + i/n)1/m
(d) (1 + i/m)1/n
Answer:

Option (a)

74.
Pick up the correct statement
(a) The change in the amount of money over a given time period is called 'time value' of money, a most important concept in engineering economy
(b) The manifestation of the time value of money is termed as interest
(c) Interest on borrowing = present amount owed - original loan
(d) All of above
Answer:

Option (d)

75.
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 above
Answer:

Option (c)

76.
If a seller recovers his capital along with accumulated compensating interest not in one single lump-sum 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) None of above
Answer:

Option (a)

77.
Pick up the correct statement
(a) An annuity is a series of equal payments occurring at equal period of time
(b) Annuity is called an equal payment or uniform payment series
(c) An annuity may have periods of time of any length but should always be of equal length
(d) All of above
Answer:

Option (d)

78.
What is the compound amount factor, if
P = Principal amount
i = Rate of interest per annum
n = Number of periods in years
(a) (1 + i)n
(b) (1 + i)1/2n
(c) √(n + i)
(d) None of above
Answer:

Option (a)

79.
What is the interest factor, if
P = Principal amount
i = Rate of interest per annum
n = Number of periods in years
(a) (1 + ni)
(b) (ni - 1)
(c) ni
(d) None of above
Answer:

Option (a)

80.
Pick up the correct statement
(a) The receipts and disbursements in a given time interval are referred to as cash flow
(b) The assumptions that all cash flows occur at the end of the interest period, is known as the end of period convention
(c) The cash flow diagram represents the statement of the problem and also includes what is given and what is to be found
(d) All of above
Answer:

Option (a)

Showing 71 to 80 out of 85 Questions
5 6 7 8 9