CHEMICAL ENGINEERING OBJECTIVE TYPE

QUESTIONS: A COMPILATION

DR. LEONARDO C. MEDINA, JR.

DEAN, COLLEGE OF ENGINEERING
LYCEUM OF THE PHILIPPINES UNIVERSITY

ENGINEERING ECONOMY

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1. The following cost item which in common both the fixed and operating cost of an
enterprise is:
a. interest b. depreciation
c. taxes d. supplies

2. The length of time, usually in years for the cumulative net annual profit to equal the
investment is called:
a. receivable turnover b. return of investment
c. price earning ratio d. payback period

3. The reduction in value and marketability due to competition from newest products /
model
a. depreciated cost b. fixed cost
c. indirect cost d. obsolescence

4. Form of summary of assets, liabilities and net worth

a. production b. break even point
c. balance method d. balance sheet

5. The worth of property which is equal to the original cost less depreciation.
a. earning value b. scrap value
c. book value d. face value

6. The type of interest that is periodically added to the amount of loan so that
subsequent interest is based on the cumulative amount.
a. compound interest b. simple interest
c. interest rate d. sinking fund

7. Output or sales at which income is insufficient to equal operating cost

a. break even point b. investment
c. depreciation d. cash flow

8. The price at which a given product will be supplied and purchased is the price that
will result in the supply and the demand being equal.
a. law of demand and supply b. law of diminishing returns
c. present worth method d. obsolescence

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9. An estimate of an assets' net market value at the end of its estimated life.
a. break even point b. cash flow
c. interest d. book value

10. An estimate of an assets' net market value at the end if its estimated life.
a. book value c. salvage value
c. depreciation d. cash flow

11. A lessening of the value of an asset due to a decrease in the quantity available as a
coal, oil and timber in forests.
a. depletion b. depreciation
c. amortization d. investment

12. A certificate of indebtedness of a corporation usually for a period of net loss that ten
years and guaranteed by a mortgage on certain assets of the corporation or its
subsidiaries.
a. appraisal b. bond
c. written contract d. equity capital

13. Funds supplied and used by owners of an enterprise in the expectation that profit
will be earned.
a. equity capital b. investment
c. working capital d. present

14. Funds supplied by others on which a fixed rate of interest must be paid and the debt
be repaid at a specific place and time
a. discount b. cash flow
c. working capital d. borrowed capital

15. The quantity of a certain commodity that is offered for sale at a certain price at a
given place and time
a. supply b. demand
c. discount d. investment

16. The quantity of a certain commodity that is bought at a certain price at a given
place and time.
a. supply b. demand
c. discount d. investment

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17. A condition where only few individuals produce a certain product that action of one
will lead to almost the same action by the other.
a. monopoly b. oligopoly
c. semi monopoly d. perfect competition

18. Is the simplest form of business organization

a. sole proprietorship b. enterprise
c. partnership d. corporation

19. An association of two or more persons for a purpose of engaging in a profitable

business
a. sole proprietorship b. enterprise
c. partnership d. corporation

20. A distinct legal entity which can practically transact any business transaction which a
real person could do.
a. sole proprietorship b. enterprise
c. partnership d. corporation

21. An increase in the value of capital asset is called

a. profit b. capital gain
c. capital expenditure d. capital stock

22. The reduction in the money value of a capital asset is called

a. capital expenditure b. capital loss
c. loss d. deficit

23. The difference between sales revenue and the cost of goods sold
a. net income b. gross profit
c. rate of return d. gross national product

24. A currency traded in a foreign exchange market for which the demand is
consistently high in relation to its supply
a. money market b. hard currency
c. treasury bill d. certificate of deposit

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25. Defined as the certificate of indebtedness of a corporation usually for a period not
less than 10 years and guaranteed by a mortgage on certain assets of a corporation
a. bonds b. T-bills
c. stock d. all of these

26. It is a negotiable claim issued by a bank in lieu of a term deposit

a. time deposit b. bond
c. capital gain d. certificate of deposit

27. The amount of a company's profit that the board of directors of the corporation
decides to distribute to ordinary shareholders
a. dividend b. return
c. share stock d. par value

28. a document that shows proof of legal ownership of a financial security

a. bond b. bank note
c. coupon d. check

29. The process determining the value of certain properties for definite reasons
a. valuation b. appraisal
c. estimate d. both a and b

30. Represent ownership and enjoys certain preferences than ordinary stock
a. authorized capital stock b. preferred stock
c. common stock d. incorporator’s stock

31. It is the difference between present worth and the worth of the paper at some time
in the future
a. discount b. amortization
c. depletion d. investment

32. The value which is usually determined by the disinterested third party in order to
establish a price that is fair to both seller and buyer.
a. fair value b. market value
c. salvage value d. book value

33. The price that can be obtained from the sale of property or second hand
a. book value b. salvage value
c. fair value d. market value
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34. The process of determining the value of certain property for specific reasons
a. amortization b. appraisal
c. investment d. depreciation

35. A bond whereby the security behind it are the equipments of the issuing corporation
a. debenture bond b. lien bond
c. collateral bond d. mortgage bond

36. An annuity where the payment period extends forever or in which the periodic
payment continue indefinitely.
a. ordinary annuity b. deferred annuity
c. annuity due d. perpetuity

37. It is the span of life of an equipment during which it produces the product it is
designed to produce at a profit
a. write off period b. physical life
c. economic life d. perpetual life

38. It is a depreciation method whereby the decrease in value of the unit is constant
each year
a. Matheson formula b. Straight line method
c. SYD method d. Sinking fund method

39. It is a distinct legal entity separate from the individual who own it and which can
engage in practically any business transaction which a real person can do.
a. sole proprietorship b. partnership
c. corporation d. all of the above

40. These are costs which remain relatively constant regardless of any change in
operation or policy which is made.
a. fixed cost b. increment cost
c. variable cost d. differential cost

41. The length of time at which the original cost of capital used to purchase a unit have
already been recovered.
a. economic life b. write off period
c. physical life d. salvage life

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42. The actual interest earned by a given principal is known as:
a. compound interest b. nominal interest
c. simple interest d. effective interest

43. The exclusive right of a company to provide a specific product / services in a given
region of the country.
a. franchise b. branch
c. extension d. outlet

44. It occurs when a commodity or service is supplied by a number of vendors and

there is nothing to prevent additional vendors entering the market
a. free market b. perfect competition
c. open market d. law of supply and demand

45. In making economy studies, a minimum required profit on the invested capital is
included as a cost.
a. rate of return b. annual cost pattern
c. present worth pattern d. capital cost

46. Depreciation method where the value of an asset decreases at a decreasing rate.
a. SYD method b. sinking fund
c. straight line method d. declining balance

47. Cost of things that are neither labor nor materials

a. construction cost b. expenses
c. labor cost d. investment

48. Kind of obligation which has no condition attached

a. analytic b. gratuitous
c. private d. pure

49. Gross, profit, sales less cost of goods sold as a percentage of sale is called
a. profit margin b. gross margin
c. ROI (rate of return) d. price earnings

50. The series of equal payments at equal intervals of time

a. interest b. depreciation
c. annuity d. amortization

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51. A legally binding agreement on promise to exchange goods or services
a. contract b. barter
c. memorandum d. pro-forma

52. An index of short term paying ability is called

a. current ratio b. receivable turnover
c. acid test ratio d. profit margin ratio

53. Used to produce consumer goods

a. producer goods b. supply
c. consumer goods d. cash flow

54. It is a series of equal payments occurring at equal interval of time where the first
payment is made several periods after the beginning of the payment
a. deferred annuity b. delayed annuity
c. progressive annuity d. simple annuity

55. A market whereby there is only one buyer of an item for which there are no goods
substitute
a. monopoly b. monopsony
c. oligopoly d. oligopsony

56. The amount of a property in which a willing buyer will pay to a willing seller for the
property when neither one is under the compulsion to buy or sell
a. fair value b. goodwill value
c. book value d. market value

57. A type of annuity where the payments are made at the start of each period,
beginning from the first period
a. ordinary annuity b. annuity due
c. deferred annuity d. perpetuity

58. A method of computing depreciation in which the annual charge is a fixed

percentage of the depreciated book value at the beginning of the year to which the
depreciation applies
a. straight line b. sinking fund method
c. SYD method d. declining balance method

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59. The cumulative effect of elapsed time on the money value of an event based on the
earning power of equivalent invested funds capital should or will earn
a. present worth factor b. interest rate
c. time value of money d. yield

60. Double taxation is a disadvantage of which business organization?

a. sole proprietorship b. partnership
c. corporation d. enterprise

61. The function of interest rate and time that determines the cumulative amount of a
sinking fund resulting from specific periodic deposits
a. sinking fund factor b. present worth factor
c. capacity factor d. demand factor

62. The intangible item of value from the exclusive right of the company to provide a
specific product or service in a stated region of the country
a. market value b. book value
c. goodwill value d. franchise value

63. The length of time during which it is capable of performing the function for which it
was designed and manufactured.
a. economic life b. business life
c. insular life d. physical life

64. Products that are directly used by people to satisfy their wants.
a. supply b. consumer goods
c. producer goods d. cash flows

65. A change in cost for a small change in volume of production.

a. fixed cost b. sunk cost
c. first cost d. differential cost

66. An amount which has been spent and for some reasons cannot be recovered.
a. sunk cost b. first cost
c. increment d. fixed cost

67. The difference between the book value and the actual lower resale value is
a. salvage value b. resale value
c. sunk cost d. fixed cost
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68. It occurs when a unique product or service is available only from a single supplier
and entry of all other possible suppliers presented.
a. competition b. monopoly
c. inventory d. profitability

69. A place where buyer and seller come together

a. market b. shop
c. department store d. parlor

70. Ratio of annual net profit and the capital invested

a. proportion b. rate of return
c. load factor d. use factor

71. The price of which a willing buyer will pay to a willing seller for a commodity
a. resale value b. market value
c. book value d. scrap value

72. The price of property when sold for a junk

a. scrap value b. book value
c. resale value d. market value
73. An interest earning fund in which equal deposits are made at equal intervals of time
a. annuity b. sinking fund
c. interest d. investment

74. A term describing wealth which is placed in a business and could include cash
equipment, raw materials and finished products
a. capital b. investment
c. collateral d. assets

75. The first cost of any property includes

a. the original purchase price and freight and transportation charges
b. installation expenses
c. initial taxes and permits' fee
d. all of the above

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