Engineering Economy Looksfam

Engineering Economy looksfam an interest rate of 14% of which P11,200 was deducted
and you were given a check of P68,800. Since you

have to pay the amount of P80,000 one year after,
1. First Benchmark Publishing’s gross margin is 50% 5. Engr. Trinidad loans from a loan firm an amount of
what then will be the effective interest rate?
of sales. The operating costs of the publishing are P100,000 with a rate of simple interest of 20% but the
estimated at 15% of sales. If the company is within the interest was deducted from the loan at the time the
40% tax bracket, determine the percent of sales is money was borrowed. If at the end of one year, she A. 16.02 % B. 16.28 %
their profit after taxes? has to pay the full amount of P100,000, what is the
actual rate of interest?
C. 16.32 % D. 16.47 %
A. 21 % B.20 %
A. 23.5 % B. 24.7 %
10. A man invested P110,000 for 31 days. The net
C. 19 % D. 18 % interest after deducting 20% withholding tax is
C. 25.0 % D. 25.8 % P890.36. Find the rate of return annually.
2. A farmer selling eggs at 50 pesos a dozen gains
20%. If he sells the eggs at the same price after the 6. A loan of P5,000 is made for a period of 15 months, A. 11.50 % B. 11.75 %
costs of the eggs rises by 12.5%, how much will be his at a simple interest rate of 15%, what future amount is
new gain in percent? due at the end of the loan period?
C. 11.95 % D. 12.32 %
A. 6.89 % B. 6.65 % A. 5,937.50 B. 5,873.20

11. A investor wishes to earn 7% on his capital after
payment of taxes. If the income from an available
C. 6.58 % D. 6.12 % C. 5,712.40 D. 5,690.12 investment will be taxed at an average rate of 42%,
what minimum rate of return, before payment of
taxes, must the investment offer to be justified?
3. A feasibility study shows that a fixed capital 7. Mr. Bacani borrowed money from the bank. He
investment of P10,000,000 is required for a proposed received from the bank P1,842 and promised to repay
construction firm and an estimated working capital of P2,000 at the end of 10 months. Determine the rate of A. 12.07 % B. 12.34 %
P2,000,000. Annual depreciation is estimated to simple interest.
be10% of the fixed capital investment. Determine the
C. 12.67 % D. 12.87 %
rate of return on the total investment if the annual
A. 12.19 % B. 12.03 %
profit is P3,500,000.
12. Mr. Jun Ramos was granted a loan of P20,000 by
C. 11.54 % D. 10.29 % his employer Excel First Review and Training Center,
A. 28.33 % B. 29.17 %
Inc. with an interest of 6% for 180 days on the
principal collected in advance. The corporation would
8. A college freshman borrowed P2,000 from a bank
C. 30.12 % D. 30.78 % accept a promissory note for P20,000 non-interest for
for his tuition fee and promised to pay the amount for
180 days. If discounted at once, find the proceeds of
one year. He received only the amount of P1,920 after
the note.
4. The monthly demand for ice cans being the bank collected the advance interest of P80.00.
manufactured by Mr. Camus is 3200 pieces. With a What was the rate of discount?
manual operated guillotine, the unit cutting cost is A. P18,000 B. P18,900
P25.00. An electrically operated hydraulic guillotine
A. 3.67 % B. 4.00 %
was offered to Mr. Camus at a price of P275,000.00
C. P19,000 D. P19,100
and which cuts by 30% the unit cutting cost.
Disregarding the cost of money, how many months C. 4.15 % D. 4.25 %
will Mr. Camus be able to recover the cost of the 13. Miss Evilla borrowed money from a bank. She
machine if he decides to buy now? receives from the bank P1,340.00 and promised to
9. It is the practice of almost all banks in the
pay P1,500.00 at the end of 9 months. Determine the
Philippines that when they grant a loan, the interest
corresponding discount rate or often referred to as the
A. 1o months B. 11 months for one year is automatically deducted from the
“banker’s discount”.
principal amount upon release of money to a
borrower. Let us therefore assume that you applied for
C. 12 months D. 13 months
a loan with a bank and the P80,000 was approved at A. 13.15 % B. 13.32 %
C. 13.46 % D. 13.73 % A. 12.35% compounded annually B. 11.90% 24. Mandarin Bank advertises 9.5% account that
compounded annually yields 9.84% annually. Find how often the interest is
compounded.
14. The exact simple interest of P5,000 invested from
June 21, 1995 to December 25, 1995 is P100. What is C. 12.20% compounded annually D. 11.60%
the rate of interest? compounded annually A. Monthly B. Bimonthly
A. 3.90 % B. 3.92 % 20. An amount of P1,000 becomes P1,608.44 after 4 C. Quarterly D. Annually
years compounded bimonthly. Find the nominal
interest.
C. 3.95 % D. 3.98 % 25. A student plans to deposit P1,500 in the bank now
and another P3,000 for the next 2 years. If he plans to
A. 11.89% withdraw P5,000 three years from after his last
15. What is the ordinary interest on P1,500.50 for 182
deposit for the purpose of buying shoes, what will be
days at 5.2%?
the amount of money left in the bank after one year of
B. 12.00%
his withdrawal? Effective annual interest rate is 10%.
A. P39.01 B. P39.82
C. 12.08%
A. P1,549.64 B. P1,459.64
C. P39.45 D. P39.99
D. 12.32%
C. P1,345.98 D. P1,945.64
16. A loan for P50,000 is to be paid in 3 years at the
amount of P65,000. What is the effective rate of 21. How long will it take money to double itself if
26. You borrow P3,500.00 for one year from a friend
money? invested at 5% compounded annually?
at an interest rate of 1.5% per month instead of taking
a loan from a bank at a rate of 18% per year. How
A. 9.01 % B. 9.14 % A. 13.7 years B. 14.7 years much lesser you will pay by borrowing the money
from the bank?
C. 9.31 % D. 9.41 % C. 14.2 years D. 15.3 years
A. P 62.44 B. P44.55
17. What is the effective rate corresponding to 18% 22. By the condition of a will, the sum of P20,000 is
compounded daily? Take 1 year is equal to 360 days. left to a girl to be held in trust fund by her guardian C. P54.66 D. P37.56
until it amounts to P50,000. When will the girl receive
the money if fund invested at 8% compounded
A. 19.61 % B. 19.44 % 27. What is the present worth of two P 100 payments
quarterly?
at the end of the third year and fourth year? The
C. 19.31 % D. 19.72 % annual interest rate is 8%.
A. 11.23 years B. 11.46 years
18. What rate of interest compounded annually is the A. P 150.56 B. P 152.88

C. 11.57 years D. 11.87 years
same as the rate of interest of 8% compounded
quarterly? C. P 153.89 D. P 151.09
23. A sum of P1,000 is invested now and left for eight
years, at which time the principal is withdrawn. The
A. 8.07 % B. 8.12 % 28. A firm borrows P2,000 for 6 years at 8%. At the
interest has accrued is left for another eight years. If
end of 6 years, it renews the loan for the amount due
the effective annual interest rate is 5%, what will be
C. 8.16 % D. 8.24 % plus P2,000 more for 2 years at 8%. What is the lump
the withdrawal amount at the end of the 16th year?
sum due?
19. Which of these gives the lowest effective rate of A. P693.12 B. P700.12
interest? A. P 3,260.34 B. P 3,280.34
C. P702.15 D. P705.42
C. P 3,270.34 D. P 3,250.34
29. In year zero, you invest P 10,000.00 in a 15% 33. A factory operator bought a diesel generator set years. What does he have to pay at the end of the fifth
security for 5 years. During that time, the average for P 10,000.00 and agreed to pay the dealer uniform year in order to pay off his loan?
annual inflation is 6%. How much in terms of year sum at the end of each year for 5 years at 8% interest
zero pesos will be in the account at maturity? compounded annually, that the final payment will
A. P 6,999.39 B. P 6,292.93
cancel the debt for principal and interest. What is the
annual payment?
A. P 15,030.03 B. P 20,113.57
C. P 6,222.39 D. P 6,922.93
A. P 2,500.57
C. P 18,289.05 D. P 16,892.34
38. Miss Calledo deposited P 1,000, P 1,500 and P
2,000 at the end of the 2nd year, 3rd year and 4th
B. P 2,544.45
30. The institute of Electronics and Communications year, respectively in a savings account which earned
Engineers of the Philippines (IECEP) is planning to 10% per annum. How much is in the account at the
put up its own building. Two proposals being C. P 2,540.56 end of the 4th year?
considered are:
D. P 2,504.57 A. P 4,880.00 B. P 4,820.00
A. The construction of the building now to cost P
400,000
34. What is the present worth of a year annuity paying C. P 4,860.00 D. P 4,840.00
P 3,000.00 at the end of each year, with interest at 8%
B. The construction of a smaller building now to cost compounded annually?
39. A P 1,000,000 issue of 3%, 15-year bond was sold
P300,000 and at the end of 5 years, an extension to be
at 95%. What is the rate of interest of this investment?
added to cost P 200,000.
A. P 7,654.04 B. P 7,731.29
A. 3.0% B. 3.4%
By how much is proposal B more economical than
C. P 7,420.89 D. P 7,590.12
proposal A if interest rate is 20% and depreciation to
be neglected? C. 3.7% D. 4.0%
35. A man loans P 187,400 from a bank with interest
at 5% compounded annually. He agrees to pay his
A. P 19,122.15 B. P 19,423.69 40. A P 1, 000, 6% bond pays dividend semiannually
obligations by paying 8 equal annual payments, the
and will be redeemed at 110% on June 21, 204. It is
first being due at the end of 10 years. Find the annual
bought on June 21, 2001 to yield 4% interest. Find the
C. P 19,518.03 D. P 19,624.49 payments.
price of the bond.
31. What is the present worth of a P500 annuity A. P 43,600.10 B. P 43,489.47

A. P 1,122.70 B. P 1,144.81
starting at the end of the third year and continuing to
the end of the fourth year, if the annual interest rate is
C. P 43,263.91 D. P 43,763.20
10 %? C. P 1,133.78 D. P 1,155.06
36. A person buys a piece of lot for P 100,000

A. P 727.17 B. P 717.17 41. A VOM has a selling price of P 400. If its selling
downpayment and 10 deferred semi-annual payments
price is expected to decline at a rate of 10% per annum
of P 8,000 each, starting three years from now. What
due to obsolescence, what will be its selling price after
C. P 714.71 D. P 731.17 is the present value of the investment if the rate of
5 years?
interest is 12% compounded semi-annually?
32. What annuity is required over 12 years to equate
A. P 222.67 B. P 212.90
with a future amount of P 20,000? Assume i= 6% A. P 142,999.08 B. P 143,104.89
annually.
C. P 236.20 D. P 231.56
C. P 142,189.67 D. P 143,999.08
A. P 1,290.34 B. P 1,185.54
42. A machine costs of P 8,000 and an estimated life
37. A young engineer borrowed P 10,000 at 12%
of 10 years with a salvage value of P 500. What is its
C. P 1,107.34 D. P 1,205.74 interest and paid P 2,000 per annum for the last 4
book value after 8 years using straight line method?
A. P 2,000.00 B. P 2,100.00 47. A manufacturer produces certain items at a labor C. 2,712 D. 2,890
cost of P 115 each, material cost of P 76 each and
variable cost of P 2.32 each. If the item has a unit
C. P 2,200.00 D. P 2,300.00
price of P 600, how many units must be manufactured
each month for the manufacturer to break even if the 51. What is defines as the analysis and evaluation of
43. ABC Corporation makes it a policy that for any monthly overhead is P428,000 the monetary consequences by using the theories and
new equipment purchased, the annual depreciation principles of economics to engineering applications,
cost should not exceed 20% of the first cost at any designs and projects?
A. 1,033 B. 1,037
time with no salvage value. Determine the length of
service life necessary if the depreciation used is the
SYD method. C. 1,043 D. 1,053 A. Economic Analysis B. Engineering cost
analysis
A. 7 eyars B. 8 years 48. A manufacturing firm maintains one product
assembly line to produce signal generators. Weekly C. Engineering economy D. Design cost analysis
demand for the generators is 35 units. The line
C. 9 years D. 10 years
operates for 7 hours per day, 5 days per week. What is 52. What is considered as the standard unit which
the maximum production time per unit in hours forms the basis of a country’s domestic money supply?
44. An asset is purchased for P 9,000.00. Its required of the line to meet the demand?
estimated economic life is 10 years after which it will
be sold for P 1,000.00. Find the depreciation in the A. Monetary unit B. Currency
A. 1.0 hour per unit B. 1.2 hours per unit
first three years using sum-of-years digit method
C. Foreign exchange D. Cash or check
C. 1.4 hours per unit D. 1.6 hours per unit
A. P 3,279.27 B. P 3,927.27
53. What is defined as any tangible economic product
49. A telephone switchboard 100 pair cable can be that contributes directly or indirectly to the
C. P 3,729.27 D. P 3,792.72
made up with either enameled wire or tinned wire. satisfaction of human want?
There will be 400 soldered connections. The cost of
45. Shell Philippines, a multinational company, has a soldering a connection on the enameled wire will be P
total gross income for a particular year of P 1.65 on the tinned wire, it will be P 1.15. A 100- pair A. Services B. Goods
50,000,000. The taxable income after taking all cable made up with enameled wire cost P 0.55 per
deductions except for depletion is P 18,500,000. What linear foot and those made up of tinned wire cost P C. Commodities D. Goods or commodities
is the allowable depletion allowance for that particular 0.75 per linear foot. Determine the length of cable run
year? Take percentage of gross income for oil as 22%. in feet so that the cost of each installation would be
the same. 54. What is defined as any tangible economic activity
that contributes directly or indirectly to the
A. P 9,358.41 B. P 9,228.45 satisfaction of human want?
A. 1,000 feet B. 1,040 feet
C. P 9,250.00 D. P 9,308.45 A. Services B. Goods
C. 1,100 feet D. 1,120 feet
46. The Saudi Arabian Oil Refinery developed an oil C. Commodities D. Goods or commodities
well which is estimated to contain 5,000,000 barrels 50. A leading shoe manufacturer produces a pair of
of oil at an initial cost of $ 50,000,000. What is the Lebron James signature shoes at a labor cost of P
depletion charge during the year where it produces 900.00 a pair and a material cost of P 800.00 a pair. 55. What are the two classifications of goods and
half million barrels of oil? Use Unit or Factor method The fixed charges on the business are P 5,000,000 a services?
in computing depletion. month and the variable costs are P 400.00 a pair.
Royalty to Lebron James is P 1,000 per pair of shoes A. Local and imported B. Raw and finished
A. $ 5,000,000.00 B. $ 5,010,000.00 sold. If the shoes sell at P 5,000 a pair, how many
pairs must be produced each month for the
manufacturer to break-even? C. Consumer and producer D. Ready-made and made-
C. $ 5,025,000.00 D. $ 5,050,000.00 to-order
A. 2.590 B. 2,632
56. What refers to the goods and services that are C. Oligopoly D. Oligopsony C. Many sellers and few buyers
required to support human life, needs and activities?
62. What market situation exists where there are few D. One seller and few buyers
A. Producer products B. Consumer products sellers and few buyers?
68. Duopsony is a market situation where there
C. Luxury D. Necessity A. Oligopoly B. Oligopsony is/are:
57. What refers to the goods and services that are C. Bilateral oligopoly D. Bilateral Oligopsony A. Few sellers and few buyers
desired by human and will be acquired only after all
the needs have been satisfied?
63. What market situation exists where there is only B. Few sellers and many buyers
one buyer and only one seller?
A. Producer products B. Consumer products
C. Many sellers and few buyers
A. Monopsony B. Monopoly
C. Luxury D. Necessity
D. One seller and few buyers
C. Bilateral monopsony D. Bilateral monopoly
58. What refers to the exchange mechanism that
69. Duopoly is a market situation where there is/are:
brings together the sellers and the buyers of a product,
64. What is the market situation exist when there are
factor of production or financial security?
many buyers and many sellers?
A. Few sellers and few buyers
A. Mall B. Market
A. Perfect competition B. Oligopoly
B. Few sellers and many buyers
C. Store D. Office
C. Oligopsony D. Monopoly
C. Many sellers and few buyers
59. What is considered as the basic consuming or
65. If there is only one seller and many buyers, the
demanding unit of a commodity? D. One seller and few buyers
market situation is ________ .
A. Seller B. Manufacturer 70. What is another term for “perfect competition”?

A. Duopsony B. Oligopoly
C. Producer D. Buyer or consumer A. Atomistic competition B. No-limit competition

60. What is defined as an entity which makes product, C. Free-for-all competition D. Heterogeneous market
66. If there are many sellers and few buyers, the
good or services available to buyer or consumer in
market situation is _________ .
exchange of monetary consideration? 71. What refers to the market situation in which any
given product is supplied by a very large number of
A. Duopsony B. Oligopoly
A. Seller B. Manufacturer vendors and there is no restriction against additional
vendors from entering the market?
C. Producer D. Buyer or consumer
A. Perfect competition B. Oligopoly
67. Oligopoly exists when there is/are:
61. What is a market situation whereby there is only
one buyer of an item for which there is no goods C. Oligopsony D. Monopoly
substitute? A. Few sellers and few buyers
72. Aside from many sellers and many buyers, which
A. Monopsony B. Monopoly B. Few sellers and many buyers one is a characteristic of perfect competition?
A. Homogeneous product A. Law of diminishing return B. Law of supply 82. Under ordinary simple interest, how many days in
one year?
B. Free market entry and exit C. Law of demand D. Law of supply and
demand A. 300 B. 360
C. Perfect information and absence of all economic
friction 77. What refers to the need, want or desire for a C. 365 D. 366
product backed by the money to purchase it?
D. All of these 83. One banker’s year is equivalent to ______ days.
A. Supply B. Demand
73. What is the opposite of perfect competition? A. 300 B. 360
C. Product D. Good
A. Monopsony B. Oligopoly C. 365 D. 366
78. What refers to the amount of a product made
available for sale?
C. Oligopsony D. Monopoly 84. What refers to the cumulative effect of elapsed
time on the money value of an event, based on the
A. Supply B. Demand earning power of equivalent invested funds capital
74. Perfect monopoly exists only if:
should or will earn?
C. Product D. Good
A. the single vendor can prevent the entry of all other
A. Present worth factor B. Interest rate
vendors in the market
79. “Under conditions of perfect competition, the
price at which any given product will be supplied and C. Time value of money D. Yield
B. the single vendor gets the absolute franchise of the
purchased is the price that will result in the supply
product
and the demand being equal.” This statement is
85. The difference between the present and future
known as the:
worth of money at some time in the future is called
C. the single vendor is the only one who has the
______.
permit to sell
A. Law of diminishing return B. Law of supply
A. Discount B. Deduction
D. the single vendor is the only one who has the
C. Law of demand D. Law of supply and
knowledge of the product
demand
C. Inflation D. Depletion
75. A ______ is a market situation where economies
80. What do you call any particular raw material or
of scale are so significant that cost are only minimized :
primary product such as cloth, wool, flour, coffee,
when the entire output of an industry is supplied by a
etc.? 86. What refers to the present worth of the probable
single producer so that the supply costs are lower
under monopoly that under perfect competition. future net earnings?
A. Utility B. Necessity
A. Perfect monopoly B. Bilateral monopoly A. Total fair value B. Total market value
C. Commodity D. Stock
C. Natural monopoly D. Ordinary monopoly C. Going concern value D. Earning value
81. What is defined as the interest on a load or
principal that is based only on the original amount of 87. What refers to the amount of money paid for the
76. “When one of the factors of production is fixed in
the loan or principal? use of borrowed capital?
quantity or is difficult to increase, increasing the other
factors of production will result in a less than
proportionate increase in output”. This statement is A. Effective rate of interest B. Nominal rate of interest A. Interest B. Rate of interest
known as the:
C. Compound interest D. Simple interest C. Simple interest D. Principal
88. What refers to the ratio of the interest payment to C. Annuity due D. Deferred annuity C. Bond D. Bank notes
the principal for a given unit of time and usually
expressed as a percentage of the principal?
94. What is the type of annuity where the payments 99. What refers to the present worth of all the amount
are made at the beginning of the each period starting the bondholder will receive through his possession of
A. Return of investment B. Interest rate from the first period? the bond?
C. Yield D. Rate of return A. Ordinary annuity B. Perpetuity A. Par value of bond B. Face value of bond
89. What is defined as the investment of loan or C. Annuity due D. Deferred annuity C. Redeemed value of bondD. Value of bond
principal which is based not only on the original
amount of the loan or principal but the amount of
95. What is the type of annuity that does not have a 100. What is defined as the certificate of indebtedness
loaned or principal plus the previous accumulated
fixed time span but continues indefinitely or forever? of corporation usually for a period not less than 10
interest?
years and guaranteed by a mortgage on certain assets
of a corporation?
A. Ordinary annuity B. Perpetuity
A. Effective rate of interest B. Nominal rate of interest
A. Bond B. T-bills
C. Annuity due D. Deferred annuity
C. Compound interest D. Simple interest
C. Stock D. Promissory note
96. What is the type of annuity where the first
90. What refers to the cost of borrowing money or the
payment does not begin until some later date in the
amount earned by a unit principal per unit time?
cash flow?
A. Yield rate B. Rate of return 101. What refers to a document that shows proof of
A. Ordinary annuity B. Perpetuity legal ownership of a financial security?
C. Rate of interestD. Economic return
C. Annuity due D. Deferred annuity A. Bond B. Bank note
91. A uniform series of payment occurring at equal
97. Which is NOT an essential element of an ordinary C. Coupon D. Check
interval of time is called ______.
annuity?
A. Annuity B. Amortization 102. What type of bond is issued jointly by two or

A. The amounts of all payments are equal. more corporations?
C. Depreciation D. Bond
B. The payments are made at equal interval of time. A. Mortgage bond B. Joint bond
92. What is the term for an annuity with a fixed time
C. The first payment is made at the beginning of the C. Tie-up bond D. Trust bond
span?
first period.
A. Ordinary annuity B. Perpetuity 103. What type of bond whose guaranty is in lien on
D. Compound interest is paid on all amounts in the railroad equipment, such as freight and passenger
annuity. cars, locomotives, etc.?
C. Annuity certain D. Annuity due
98. What is defined as a financial security note issued A. Railroad bond B. Equipment obligation bond
93. What is the type of annuity where the payments by business or corporation and by the government as
are made at the end of each period starting from the a means of borrowing long-term fund?
first period? C. Equipment bond D. Equipment trust bond
A. T-bills B. Securities
A. Ordinary annuity B. Perpetuity
104. A type of bond to which are attached coupons C. Incorporators bond D. Callable bond fixed percentage of the book value at the beginning of
indicating the interest due and the date when such the year?
interest is to be paid is called ______.
110. What is the feature of some bonds whereby the
issuer can redeem it before it matures? A. Straight line method B. Sinking fund method
A. Registered bond B. Coupon bond
A. Return clause B. Callability C. Sum-of-year digit method D. Declining balance
C. Mortgage bond D. Collateral trust bond method
C. Recall clause D. Call class
105. What bond whose security is a mortgage on 116. In SYD method of computing depreciation, which
certain specified assets of the corporation? of the following is the formula in finding the sum of
111. The price at which the callable bond will be
years’ digits?
redeemed from the bondholder is called ______.
A. Registered bond B. Collateral trust bond
A. Par value B. Call value
C. Mortgage bond D. Debenture bond A.
C. Face value D. Redemption value
106. A bond without any security behind them except B.
a promise to pay by the issuing corporation is called
112. What is defined as the reduction or fall of the
______.
value of an asset due to constant use and passage of C.
time?
A. Joint bond B. Debenture bond
D.
A. Depletion B. Inflation 117. The declining balance method is also known as
C. Trust bond D. Common bond ______.
C. Depreciation D. Deflation
107. A type of bond where the corporation pledges A. Double percentage method
securities which it owns such as the stock or bonds of
113. In what method of computing depreciation where
one of its subsidiaries.
it assumes that the loss in value is directly B. Constant percentage method
proportional to the age of the equipment or asset?
A. Mortgage bond B. Joint bond
C. Modified sinking fund method
A. Straight line method B. Sinking fund method
C. Security bond D. Collateral trust bond
D. Modified SYD method
C. Sum-of-year digit method D. Declining balance
108. What type of bond where the corporation’s owner method
name are recorded and the interest is paid periodically 118. What type of depreciation is due to the reduction
to the owners with their asking for it? in the demand for the function that the equipment or
114. In what method of computing depreciation where asset was designed to render?
it assumes that a sinking fund is established in which
A. Preferred bond B. Registered bond funds will accumulate for replacement purposes?
A. Functional depreciation B. Design depreciation
C. Incorporators bond D. Callable bond A. Straight line method B. Sinking fund method
C. Physical depreciation D. Demand depreciation
109. What type of bond which can be redeemed before C. Sum-of-year digit method D. Declining balance
maturity date? method 119. What type of depreciation is due to the reduction
of the physical ability of an equipment or asset to
produce results?
A. Preferred bond B. Registered bond 115. In what method of computing depreciation where
it assumes that the annual cost of depreciation is a
A. Functional depreciation B. Design depreciation
C. Physical depreciation D. Demand depreciation 124. The depletion allowance method of computing A. Load factor B. Demand factor
depletion is commonly known as ______.
120. The functional depreciation is sometimes called C. Sinking fund factor D. Present worth factor
______. A. Unit method
129. The amount of property in which a willing buyer
A. Demand depreciation B. Adolescence B. Percentage method to a willing seller for the property when neither one is
under the compulsion to buy nor to sell is called
______.
C. Life depreciation D. Failure depreciation C. Factor method
A. Fair value B. Market value

121. What is defined as the reduction of the value of D. Sinking fund method
certain natural resources such as mines, oil, timber,
quarries, etc. due to the gradual extraction of its C. Good will value D. Book value
125. What is another term for “unit method” for
contents?
computing depletion?
130. Salvage value is sometimes known as ______.
A. Depletion B. Inflation
A. Initial cost method B. Percentage method
A. Scrap value B. Going value
C. Depreciation D. Deflation
C. Factor method D. Sinking fund method
C. Junk value D. Second-hand value
122. What are the common methods of computing
126. Using factor method, the depletion at any given
depletion charge?
year is equal to: 131. What refers to the value of an asset which a
disinterested third party, different from the buyer and
A. Rational method and irrational method seller, will determine in order to establish a price
A. Initial cost of property times number of unit sold
acceptable to both parties?
during the year divided by the total units in property
B. Conservative method and conventional method
A. Book value B. Market value
B. Initial cost of property divided by the number of
C. Unit method and percentage method units sold during the year
C. Fair value D. Franchise value
D. Discrete method and depletion allowance method C. Initial cost of property times number of units sold
during the year 132. What refers to the value of an intangible item
which arises from the exclusive right of a company to
123. Under the depletion allowance method in
provide a specified product and service in a certain
computing depreciation, the depletion charge is equal D. Initial cost of property divided by the total units in
region of the country?
to either ______ whichever is smaller. property
A. Company value B. Going value

A. Fixed percentage of gross income or the net taxable 127. What do you call the after-tax present worth of all
income depreciation effects over the depreciation period of
the asset? C. Goodwill value D. Franchise value
B. Fixed percentage of gross income or 50% of the net
taxable income A. Asset recovery B. Depreciation recovery 133. The first cost to be incurred if the piece of
equipment now in place had been bought for a second
hand dealer or some other business is called ______.
C. 50% of the fixed percentage of gross income or 50% C. Period recovery D. After-tax recovery
of the net taxable income
A. Material cost B. Fixed cost
128. A mathematical expression also known as the
D. 50% of the fixed percentage of gross income or the present value of annuity of one is called ______.
net taxable income C. First cost D. In-place value
134. In computing depreciation of an equipment, A. Capitalized cost method B. Present worth method A. Uniform series sinking fund
which of the following represents the first cost?
C. Annual cost method D. MARR B. Capital recovery
A. The original purchase price and freight charges
140. What method is often used in municipal project C. Single payment present worth
B. Installation expenses evaluations where benefits and costs accrue to
different segments of the community?
D. Uniform gradient future worth
C. Initial taxes and permit fees
A. Annual cost method B. Benefit-cost ratio
145. A form of business organization in which a
D. All of these person conducts his business alone and entirely for
C. Rate of return method D. EUAC his own profit, being solely responsible for all its
activities and liabilities.
135. The process of determining the value or worth of
a physical property for specific reason is called 141. What refers to an imaginary cost representing
______. what will not be received if a particular strategy is A. Sole proprietorship B. Entrepreneurship
rejected?
A. Investment B. Valuation C. Partnership D. Corporation
A. Opportunity cost B. Ghost cost
C. Economy D. Depletion 146. Is an artificial being created by operation of law,
C. Horizon cost D. Null cost having the right of succession and the process,
attributes and properties expressly authorized by the
136. The unrecovered depreciation which results due
law or incident to its existence?
to poor estimates as to the life of the equipment is 142. What is the main reason why the sinking fund
called ______. method of computing depreciation is seldom used in
the industry? A. Corporation B. Property
A. Sunk cost B. Economic life
A. Unstable economy C. Partnership D. Organization
C. In-place value D. Annuity
B. Rate of interest cannot be exactly determined 147. What is the simplest form of business
organization?
137. What refers to the present worth of cost
associated with an asset for an infinite period of time? C. The initial deprecation is high
A. Sole proprietorship B. Partnership
A. Annual cost B. Increment cost D. The initial depreciation is low
C. Enterprise D. Corporation
C. Capitalized cost D. Operating cost 143. What is the factor name of the formula (1+i)^-n?
148. Double taxation is a disadvantage of which
business organization?
138. Capitalized cost of a project is also known as A. Uniform gradient future worth
______.
A. Sole proprietorship B. Partnership
B. Capital recovery
A. Infinite cost B. Life cycle cost
C. Corporation D. Enterprise
C. Single payment present worth
C. Life cost D. Project cost
149. In case of bankruptcy of a partnership,
D. Single payment compound amount
139. What is normally used to compare alternatives
that accomplish the same purpose but have unequal A. The partners are not liable for the liabilities of the
144. What is the factor name of the formula
lives? partnership
[i(1+i)^n]/[((1+i)^n)-1]?
B. The partnership assets (excluding the partners 153. An association of two or more persons for the 159. Cash money and credit necessary to establish and
personal assets) only will be used to pay the liabilities purpose of engaging into a business for profit is called operate an enterprise are generally called ______.
______.
C. The partner’s personal assets are attached to the A. Capital B. Funds
debt of the partnership A. Entrepreneurship B. Partnership
C. Assets D. Liabilities
D. The partners nay sell stock to generate additional C. Proprietorship D. Corporation
capital
160. What represents the share of participation in
154. What represents the ownership of stockholders business organizations?
150. Which is true about partnership? who have a residual claim on the assets of the
corporation after all other claims have been settled?
A. Franchise B. Partnership
A. It has a perpetual life.
A. Authorized capital stock B. Preferred stock
C. Stock D. Corporation
B. It will be dissolved if one of the partners ceases to
be connected with the partnership. C. Incorporator stock D. Common stock
161. The profit derived from a project or business
enterprise without consideration of obligations to
C. It can be handed down from one generation of 155. What stock represents ownership and enjoys financial contributors and claims of others based on
partners to another. certain preferences than ordinary stock? profit is known as ______.
D. Its capitalization must be equal for each partner. A. Authorized stock B. Preferred stock A. Yield B. Economic return
C. Incorporator’s stock D. Presidential stock C. Earning value D. Gain
151. Which is true about corporation?

156. The amount of company’s profit that the board of 162. ______ is the element of value which a business
directors of the corporation decides to distribute to has earned through the favorable consideration and
A. It is worse type of business organization. ordinary shareholders is called ______. patronage of its costumers arising from its well-
known and well conducted policies and operations.
B. The minimum number of incorporators to start a A. Dividend B. Return
corporation is three. A. Status company B. Big income
C. Share of stock D. Equity
C. Its life is dependent on the lives of the C. Known owners D. Goodwill
incorporators.
157. What refers to the residual value of a company’s
assets after all outside liabilities (shareholders 163. Which of the following is an example of
D. The stock holders of the corporation are only liable excluded) have been allowed for? intangible asset?
to the extent of their investments.
A. Dividend B. Equity A. Cash B. Investment in subsidiary companies
152. Aggregation of individuals formed for the
purpose of conducting a business and recognized by
law as a fictitious person is called ______. C. Return D. Par value C. Furniture D. Patents
A. Partnership B. Investors 158. What refers to the claim of anyone to ownership? 164. Lands, buildings, plants and machineries are
example of what type of asset?
C. Corporation D. Stockholders A. Proprietorship B. Assets

A. Current asset B. Trade investment asset
C. Equity D. Liability
C. Fixed asset D. Intangible asset 171. The original record of a business transaction is A. Rule of 48 B. Rule of 36
recorded in this book.
165. What refers to the interest rate at which the C. Rule of 24 D. Rule of 72
present work of the cash flow on a project is zero of A. Work book B. Journal
the interest earned by an investment?
178. What is the increase in the money value of a
C. Ledger D. Account book capital asset is called?
A. Economic return B. Yield
172. All the proceeds which are received by the A. Profit B. Capital gain
C. Rate of return D. Return of investment business as a result of the sale of goods is called
______.
C. Capital expenditure D. Capital stock
166. What is another term for “current assets”?
A. Net income B. Gross income
179. What is the reduction in the money value of
A. Fixed assets B. Non-liquid assets capital asset is called?
C. Net revenue D. Total sales
C. Liquid assets D. Cash A. Capital expenditure B. Capital loss
173. All are classified under direct labor expenses
EXCEPT one. Which one?
167. What is an accounting term that represents an C. Loss D. Deficit
inventory account adjustment?
A. Inspection cost B. Testing cost
180. What refers to the negotiable claim issued by a
A. Cost of goods sold B. Cost accounting bank in lien of a term deposit?
C. Assembly cost D. Supervision cost
C. Standard cost D. Overhead cost A. Time deposit B. Bond
174. What is a measure of the average speed with
which accounts receivable are collected?
168. What is the change in cost per unit variable C. Capital gain certificate D. Certificate of deposit
change called?
A. Current ratio B. Quick ratio
181. What denotes in the fall in the exchange rate of
A. Variable cost B. Incremental cost one currency in terms of the others? This term is
C. Acid test ratio D. Receivable turnover usually applies to the floating exchange rate.
C. Fixed cost D. Supplemental cost
175. The ratio of the net income before taxes to net A. Currency appreciation B. Currency depreciation
sales is called ______.
169. What is used to record historical financial
transactions? C. Currency devaluation D. Currency float
A. Current ratio B. Inventory turnover
A. Bookkeeping system B. Ledger system 182. The deliberate lowering of the price of a nation’s
C. Profit margin ratio D. Price-earnings ratio currency in terms of the accepted standard (Gold,
American dollar or the British pound) is known as
C. Balance check D. General journal system
______.
176. What do you call a one-time credit against taxes?
170. What is a secondary book of accounts, the
A. Currency appreciation B. Currency depreciation
information of which is obtained from the journal is A. Due credit B. Tax credit
called?
C. Currency devaluation D. Currency float
C. Credible credit D. Revenue credit
A. Balanced sheet B. Ledger
177. What is used when a quick estimate of the
C. Worksheet D. Trial balance doubling time for the invested money is needed?
183. What refers to the saving which takes place 188. Return on investment ratio is the ratio of the: A. Stock pile B. Hoard stock
because goods are not available for consumption
rather than consumer really want to save?
A. Net income to owner’s equity C. Buffer stock D. Withheld stock
A. Compulsory saving B. Consumer saving

B. Market price per share to earnings per share 194. The ability to meet debts as they become due is
known as ______.
C. Forced saving D. All of these
C. Cost of goods sold to average cost of inventory at
hand A. Solvency B. Leverage
184. The flow back of profit plus depreciation form a
given project is called ______.
D. Net credit sales to average net receivable C. Insolvency D. Liquidity
A. Capital recovery B. Cash flow

189. Gross margin is the ratio of the gross profit to 195. The ability to convert assets to cash quickly is
______. known as ______.
C. Economic return D. Earning value
A. Net sale B. Owner’s equity A. Solvency B. Liquidity
185. As applied to capitalized asset, the distribution of
the initial cost by a periodic changes to operation as in
C. Inventory turnover D. Quick assets C. Leverage D. Insolvency
depreciation or the reduction of a debt by either
periodic or irregular prearranged programs is called
______. 190. What is another term for “acid-test ratio”? 196. What is the basic accounting equation?
A. Annuity B. Amortization A. Current ratio B. Quick ratio A. Assets = liability + owner’s equity
C. Capital recovery D. Annuity factor C. Profit margin ratio D. Price-earnings ratio B. Liability = assets + owners’ equity
186. Capitalized cost of any structure or property is 191. What is a government bond which has an C. Owner’s equity = assets + liability
computed by which formula? indefinite life rather than a specific maturity?
D. Owner’s equity = liability – assets
A. First cost + interest of first cost A. Coupon B. T-bill
197. The financial health of the company is measured
B. Annual cost – interest of first cost C. Debenture D. Consol in terms of:
C. First cost + cost of perpetual maintenance A. Liquidity B. Solvency

192. A form of business firm which is owned and run
by a group of individuals for their mutual benefit is
D. First cost + salvage value C. Relative risk D. All of these
called ______.
187. The true value of interest rate computed by 198. What is an index of short-term paying ability?
A. Cooperative B. Corporation
equations for compound interest for a 1 year period is
known as ______. A. Price-earnings ratio B. Current ratio
C. Enterprise D. Partnership
A. Expected return B. Nominal interest C. Profit margin ratio D. Gross margin
193. What is a stock of a product which is held by a
trade body or government as a means of regulating the
C. Effective interest D. Economic return 199. The common ratio is the ratio of:
price of that product?
A. Net credit sales to average net receivable 204. What is the ratio of the net income to owner’s D. The ratio of cost of goods sold to average cost of
equity? inventory on hand
B. Current assets to current liabilities
A. Gross margin 208. Which of the following is a book value share of
common stock?
C. Gross profit to net sales
B. Return of investment ratio
A. The ratio of net income before taxes to net sales
D. Net income to owner’s equity
C. Book value per share of common stock
B. The ratio of gross profit to net sales
200. What is defined as the current assets minus
inventories and prepaid expenses? D. Inventory turnover
C. The ratio of common shareholders’ equity to the
number of outstanding shares
A. Profit margin ratio B. Price-earnings ratio 205. What is the ratio of the market price per share to
earnings per share called?
D. The ratio of cost of goods sold to average cost of
C. Return of investment ratio D. Quick ratio
inventory on hand
A. Gross margin
209. What is an inventory turnover?

B. Price-earnings ratio
201. What is the ratio of the quick assets to current
liabilities? A. The ratio of net income before taxes to net sales
C. Book value per share of common stock
A. Profit margin ratio B. Price-earnings ratio B. The ratio of gross profit to net sales
D. Inventory turnover
C. Return of investment ratio D. Quick ratio C. The ratio of common shareholders’ equity to the
206. What is the profit margin ratio?
number of outstanding shares
202. What is a measure of the average speed with
which accounts receivable are collected? A. The ratio of the net income before taxes to net sales
D. The ratio of cost of goods sold to average cost of
inventory on hand
A. Profit margin ratio B. Receivables turnover B. The ratio of gross profit to net sales
210. The average age of receivables is computed using
C. Return of investment ratio D. Average age of C. The ratio of common shareholders’ equity to the which formula?
receivables number of outstanding shares
A. 365 / receivable turnovers
203. Receivable turnover is the ratio of: D. The ratio of cost goods sold to average cost of
inventory on hand
B. 365 / average net receivable
A. Net credit sales to average net receivables
207. What is a gross margin?
C. 365 / inventory turnover
B. Market price per share to earnings per share
A. The ratio of net income before taxes to net sales
D. 365 / average cost of inventory on hand
C. Cost of goods sold to average cost of inventory on
hand B. The ratio of gross profit to net sales
211. What is a method of determining when the value
of one alternative becomes equal to the value of
D. Common shareholders’ equity to number of C. The ratio of common shareholders’ equity to the another?
outstanding shares number of outstanding shares
A. Specific identification method
B. Average cost method 216. What is an accelerated depreciation method? C. Law of demand D. Law of supply and
demand
C. Break-even analysis A. It is one that calculates a depreciation amount
greater than a straight line amount 221. What is the ratio of the market price per share to
the earnings per share?
D. Incremental value method
B. It is one that calculates a depreciation amount
lesser than a straight line amount A. Inventory turnover B. Price-earnings
212. The days supply of inventory on hand is
calculated using which formula?
C. It is one that calculates a depreciation amount C. Book value per share of common stock D. Profit
equal to straight line amount margin
A. 365 / receivable turnovers
D. It is one that calculates a depreciation not in any 222. What is the ratio of the net income to owner’s
B. 365 / average net receivable
way related to straight line amount equity?
C. 365 / inventory turnover

217. What refers to the reduction in the level of a A. Return on investment B. Inventory turnover
national income and output usually accompanied by a
D. 365 / average cost of inventory on hand fall in the general price level?
C. Profit margin D. Price-earnings
213. What is defined as the length of time usually in A. Deflation B. Inflation

223. What refers to the ration of the net income before
years, for cumulative net annual profit to equal the
taxes to net sales?
initial investment?
C. Devaluation D. Depreciation
A. Receivable turnover B. Acid test ratio
A. Return of investment period B. Turnover
218. A formal organization of producers within an
period
industry forming a perfect collusion purposely formed
C. Return on investment D. Profit margin
to increase profit and block new comers form the
C. Break-even period D. Payback period industry is called ______.
224. What refers to the buying or selling of goods
between two or more markers in order to take
214. What is defined as ratio of its return to its cost? A. Monopoly B. Cartel
profitable advantage of any differences in the prices
quoted in these markets?
A. Return of an investment B. Value of an investment C. Corporation D. Competitors
A. Cartel B. Arbitrage
C. Breakeven point of an investment D. Term of an 219. The paper currency issued by the central bank
investment which forms part of the country’s money supply is
C. Black market D. A priori
called ______.
215. Which of the following is an accelerated
225. The suspension of repayment of debt or interest
depreciation method? A. T-bills B. Bank notes
for a specified period of time is called ______.
A. Straight line method and sinking fund method C. Check D. Coupon

A. Moratorium B. Escrow
B. Straight line method and double declining balance 220. “When one of the factors of production is fixed in
C. Numeraire D. Porcupine
method quantity or is difficult to increase, increasing the other
factors of production will result in a less than
proportionate increase in output”. 226. The discount of one unit of principal for one unit
C. Double declining balance method and SYD method
of time.
D. SYD method and sinking fund method A. Law of diminishing return B. Law of supply
A. Rate discount B. Nominal discount C. Devaluation D. Deviation A. Free market B. Perfect competition
C. Actual discount D. Sales discount 233. It is usually determined by a disinterested third C. Open market D. Law of supply and demand
party to establish a price good enough to both the
seller and the buyer.
227. An annuity whereby the payment is postponed 239. In making economy studies a minimum required
for a certain period of time is? profit on the invested capital is included as a cost. A
A. Fair value B. Market value method called as __________.
A. Ordinary annuity B. Suspended annuity
C. Common value D. Safe value A. Rate of return B. Annual cost pattern
C. Deferred annuity D. Annuity due
234. The exclusive right of a company to provide a C. Present worth pattern D. Capital cost
specific product or services in a given region of the
228. The actual interest earned by a given principal is
country.
known as? 240. Annuity is required over 10 years to equate to a
future amount of P 15, 000 with i=5%
A. Outlet B. Branch
A. Compounded interest B. Nominal interest
A. P 1, 192.57 B. P 1, 912.75
C. Extension D. Franchise
C. Simple interest D. Effective interest
C. P 1, 219.60 D. P 1, 921.65
235. It is the sum of the first cost and the present
229. A bond where the security behind it are the
worth of all costs or replacement, operation and
equipment of the issuing corporation. 241. A debt of P 1000 is to be paid off in 5 equal yearly
maintenance.
payments, each combining an amortization
installment and interest at 4% on the previously
A. Debenture B. Mortgage
A. Total cost B. Capitalized cost unpaid balance of the debt. What should be the
amount of each payment?
C. Collateral D. Lien
C. Initial cost D. Variable cost
A. P 220.50 B. P 224.62
230. Characterized by a few supplies of a
236. A certificate of indebtedness of a corporation
product/services that the action by one will almost
usually for a period not less than 10 years and C. P 242.61 D. P 222.50
inevitably result in the similar action by the other.
guaranteed by a mortgage on certain assets of the
corporation or its subsidiaries.
242. P 1000 is deposited in a bank at 7% interest.
A. Monopoly B. Oligopoly
What is the value of the money after 25 years,
A. Collateral B. Bond assuming that nothing was deposited after the initial
C. Competition D. Necessity deposit?
C. Mortgage D. Contract
231. It is the worth of a property as shown on the A. P 5, 247.63 B. P 5, 437.34
accounting records.
237. What the property is worth to the owner as an
operating unit. C. P 5, 427.43 D. P 5, 720.51
A. Resale value B. Face value
A. Utility value B. Present value 243. What is the interest due on a P 1500 note for 4
C. Book value D. Written value years and 3 month, if it bears 12% ordinary simple
interest?
C. Salvage value D. Resale value
232. The decrease in the value of a property due to
gradual extraction of its contents. A. P 756 B. P 765
238. Occurs when a commodity or service is supplied
by a number of vendors and there is nothing to
A. Depreciation B. Depletion prevent additional vendors entering the market. C. P 675 D. P 576
244. A P 1000-bond which will mature in 10 years and A. Straight line method B. Sinking fund method 253. Mr. J. Dela Cruz borrowed money from the bank.
with a bond rate of 10% payable annually is to be He received from the bank P1,340.00 and promised to
redeemed at P 1040 at the end of this period. If it is pay P1,500.00 at the end of 9 months. Determine the
C. Declining balance method D. SYD method
sold now at P 1,120. Determine the yield at this price. simple interest rate and the corresponding discount
rate or often referred to as the “Banker’s Discount”.
249. Which of the following depreciation methods
A. 4.68 % B. 6.48 %
cannot have a salvage value of zero?
A. 15.92% ; 13.73% B. 12.95% ; 17.33%
C. 8.64 % D. 8.46 %
A. Declining balance method B. Sinking fund
C.18.28% ; 13.12% D. 19.25% ; 13.33%
method
245. A company sets aside P 300,000 each year as a
fund for expansion. If the fund earns 9% compounded 254. A man borrowed from the bank under a
C. Straight line method D. SYD method
annually, determine how long will it take before a promissory note that he signed in the amount of
building costing P 3, 000, 000 can be built? P25000.00 for a period of 1year. He received only the
250. A method of depreciation where a fixed sum of amount of P21,915.00 after the bank collected the
money is regularly deposited at compound interest in advance interest and an additional amount of P85.00
a real or imaginary fund in order to accumulate an for notarial and inspection fees. What was the rate of
amount equal to the total depreciation of an asset at interest that the bank collected in advance?
C. 7.20 years D. 7.54 years the end of the asset’s estimated life.
A. 13.64% B. 16.43%
246. Which is NOT an essential element of an A. Straight line method B. Sinking fund method
ordinary annuity?
C.18.37% D. 10.32%
C. Declining balance method D. SYD method
A. The amounts of all payments are equal.
255. Karen was granted a loan of P20,000 by her
employer CPM Industrial Fabricator and Construction
B. The payments are made at equal interval of time. Corporation with an interest at 6% for 180days on the
251. A price tag of P1200 is specified if paid within 60 principal collected in advance. The corporation would
days but offers a 3% discount for cash in 30 days. Find accept a promissory note for P20,000 non-interest for
C. The first payment is made at the beginning of each the rate of interest.
period. 180days. If discounted at once, find the proceeds in
the note.
A. 37.11% B. 40.21%
D. Compound interest is paid on all amounts in the
annuity. A. P18,800 B. P18,000
C. 38.51% D. 39.31%
247. An amortization of a debt is in a form of a C. P19,000 D. P18,400
gradient series of P5,000 on the first year, P4,500 on 252. It is the practice of almost all bank in the
the second year, P4,000 on the third year, P3,500 on Philippines that when they grant a loan, the interest 256. P4000 is borrowed for 75 days at 16% per annum
the fourth year. What is the equivalent uniform for 1 year is automatically deducted from the principal simple interest. How much will be due at the end of 75
periodic payment if interest is 5%? amount upon release of money to a borrower. Let us days?
therefore assume that you applied for a loan with the
bank and the P80000 was approved at an interest rate
A. P4,280.47 B. P4,378.17 of 14% of which P11200 was deducted and you were A. P4186.43 B. P4133.33
given ac check of P68800. Since you have to pay the
C. P4,259.68 D. P4,325.12 amount of P80000 one year after, what then will be C. P5124.54 D. P5625.43
the effective interest rate?
248. A method of depreciation whereby the amount to 257. Mr. Bautista made a money market placement of
recover is spread uniformly over the estimated life of A. 16.28% B. 17.30% P1,000,000 for 30 days at 7.5% per year. If
the asset in terms of the periods or units of output. withholding tax is 20%, what is the net interest that
C. 38.51% D. 39.31% Mr. Bautista will receive at the end of the month?
A. P3,000 B. P6,000 A. P46,200 B. P46,729 268. A man borrows money from a bank which uses a
simple discount rate of 14%. He signs a promissory
note promising to pay P500.00 per month at the end
C. P4,000 D. P5,000 C. P44,893 D. P45,789
of 4th, 6th, and 7th month respectively. Determine the
amount of money that he received from the bank.
258. A bill for motorboat specifies the cost as P1,200 263. A man borrowed P2000 from a bank and
due at the end of 100days but offers a 4% discount for promise to pay the amount for 1year. He received only
A. P1403.68 B. P1102.37
cash in 30days. What is the highest rate, simple the amount of P1,920 after the bank collected an
interest at which the buyer can afford to borrow advance interest of P80. What was the rate of discount
money in order to take advantage of the discount? and the rate of interest that the bank collected in C. P1340.38 D. P1030.28
advance?
A. 18.4% B. 20.9% 269. A nominal interest of 3% compounded
A. 4% ; 4.17% B. 4% ; 4.71% continuously is given on the account. What is the
accumulated amount of P10,000 after 10 years?
C. 19.6% D. 21.4%
C. 3% ; 3.17% D. 3% ; 3.71%
A. P13,610.10 B. P13,498.60
259. In buying a computer disk, the buyer was offered
the options of paying P250 cash at the end of 30days 264. An engineer promised to pay P36,000 at the end
or P270 at the end of 120days. At what rate is the of 90days. He was offered a 10% discount if he pays in C. P13,500.10 D. P13,439.16
buyer paying simple interest if he agree to pay at the 30 days. Find the rate of interest.
end of 120days?
270. BY the condition of a will, the sum of P2000 is
A. 64.6% B. 66.6% left to a girl to be held in trust fund by her guardian
A. 32% B. 28% until it amount to P50000.00. When will the girl
receive the money of the fund is invested at 8%
C. 65.6% D. 67.6%
compounded quarterly?
C.40% D. 25%
265. A man is required to pay P200 at the end of 160
260. On March 1, 1996 Mr. Sarmiento obtains a loan days or P190 at the end of 40 days. Determine the rate
of P1500 from Mr. Avila and signs a note promising to of interest.
pay the principal and accumulated simple interest at C. 10.34 years D. 10.45 years
the rate of 5% at the end of 120days. On May 15, 1996,
A. 18.4% B. 15.8%
Mr. Avila discounts the note at the bank whose
271. A man expects to receive P25,000 in 8 years.
discount rate is 6%. What does he receive?
How much is that worth now considering interest at
C. 19.6% D. 16.4%
8% compounded quarterly?
A. P2,201.48 B. P1,513.56
266. Compute the discount if P2000 is discounted for
A. P13,859.12 B. P13,675.23
6 months at 8% simple interest.
C. P1,123.29 D. P938.20
C. P13,958.33 D. P13,265.83
A. P29.67 B. P76.92
261. A deposit of P110,000 was made for 31days. The
net interest after deducting 20% withholding tax is
272. P500,000 was deposited at an interest of 6%
P890.36. Find the rate of return annually. C. P67.29 D. P92.76
compounded quarterly. Compute the compound
interest after 4 years and 9 months.
A. 12.25 B. 12.75 267. The amount of P12800 in 4years at 5%
compounded quarterly is _____.
A. P163,475.37 B. P158,270.37
C. 11.75 D. 11.95
A. P14,785.34 B. P16,311.26
C. P178,362.37 D. P183,327.37
262. If you borrowed money from your friend with
simple interest of 12%, find the present worth of C. P15,614.59 D. P15,847.33
P50,000 which is due at the end of 7months.
273. If the nominal interest rate is 3%, how much is 278. What is the equivalent rate if it is compounded A. P24,751.34 B. P28,864.36
P5000 worth in 10 years in a continuously quarterly?
compounded account?
C. P36,421.44 D. P30,468.42
A. 7.03% B. 9.03%
A. P5750 B. P7500
284. If the effective annual interest rate is 4%,
C. 8.03% D. 10.03% compute the equivalent nominal annual interest
C. P6750 D. P6350 compounded continuously.
279. What is the effective rate if it is compounded
274. P200,000 was deposited for a period of 4 years quarterly? A. 3.92% B. 3.80%
and 6 months and bears on interest of P85649.25.
What is the rate of interest if it is compounded
A. 7.28% B. 9.28% C. 4.10% D. 4.09%
quarterly?
C. 8.28% D. 10.28% 285. What is the nominal rate of interest compounded

A. 8% B. 7%
continuously for 10 years if the compound amount
factor is equal to 1.34986?
280. How will it take a money to double itself if
C. 6% D. 5%
invested at 5% compounded annually?
A. 3% B. 5%
275. How many years will P100,000 earn a compound
interest of P50,000 if the interest rate is 9%
C. 4% D. 6%
C. 13.2 years D. 15.2years
286. American Express Corp. charges 1.5% interest
per month, compounded continuously on the unpaid
281. Compute the effective annual interest rate which
balance purchases made on this credit card. Compute
is equivalent to 5% nominal annual interest
C. 4.55 years D. 2.11 years the effective rate of interest.
compounded continuously.
276. A certain amount was deposited 5 years and 9 A. 19.72% B. 21.20%

A. 5.13% B. 5.26%
months ago at an interest of 8% compounded
quarterly. If the sum now is P315,379.85, how much
C. 20.25% D. 19.90%
was the amount deposited? C. 4.94% D. 4.90%
287. If the nominal interest is 12% compounded

A. P200,000 B. P240,000 View Answer:
continuously, compute the effective annual rate if
Answer: Option A
interest.
Explanation:
C. P180,000 D. P260,000
282. Find the time required for a sum of money to A. 12.75% B. 12.40%
For Problems 277-279: triple itself at 5% per annum compounded
When compounded Bi-monthly, P15000 becomes continuously.
C. 11.26% D. 11.55%
P22,318.30 after 5years.
288. Compute the difference in the future amount of
277. What is the nominal rate of interest?
P500 compounded annually at nominal rate of 5%
C. 25.34 years D. 23.36 years and if it is compounded continuously for 5 years at the
A. 7% B. 9% same rate.
283. A man wishes to have P40,000 in a certain fund
C. 8% D. 10% at the end of 8 years. How much should he invest in a A. P3.87 B. P5.48
fund that will pay 6% compounded continuously?
C. P4.21 D. P6.25
289. If the effective rate is 24%, what nominal rate of C. 7% D. 6% 300. If it was made at 16% compounded continuously.
interest is charged for a continuously compounded
loan?
295. If the single payment present worth factor for a A. P422,462.64 B. P524,242.46
period of 8 years is equal to 0.58201, compute the
A. 21.51% B. 23.25% nearest value of the rate of interest for that period.
C. P507,233.24 D. P519,327.95
C. 22.35% D. 21.90% A. 6% B. 5%
301. Find the value of x, (F/P, x, 6) if F/P
compounded quarterly is equal to 1.612226.
290. What is the nominal rate of interest compounded C. 7% D. 8%
continuously for 8 years if the present worth factor is A. 7% B. 5%
equal to 0.6187835?
296. If money is worth 8% compounded quarterly,
compute the single payment amount factor for a C. 8% D. 6%
A. 4% B. 6% period of 6 years.
302. Find the value of y, (P/F, 6%, y) if P/F
C. 5% D. 7% A. 1.60844 B. 1.70241 compounded bi-monthly is equal to 0.787566.
A. 7 years B. 5 years
291. What is the difference of the amount 3 years from C. 0.62172 D. 0.53162
now for a 10% simple interest and 10% compound
interest per year? (P5000 accumulated) C. 6 years D. 4 years
297. A sum of P1,000 is invested now and left for 8
years, at which time the principal is withdrawn. The
A. P155 B. same interest has an accrued left for another 8 years. If the 303. Find the rate of interest if compound amount
effective annual interest is 5%, what will be the factor compounded bi-monthly for 5 years is equal
withdrawn amount at the end of the 16th year? to 1.487887.
C. P100 D. P50
A. 7% B. 5%
A. P507.42 B. P750.42
292. Find the discount if P2,000 is discounted for 6
months at 8% compounded quarterly.
C. 8% D. 6%
C. P705.42 D. P425.07
A. P76.92 B. P77.66
304. Compute the nominal rate for a period of 6 years
For problems 298 – 300:
for an effective rate of 8.33% if it is compounded
Compute the interest for an amount of P200,000 for a
C. P80.00 D. P78.42 continuously.
period of 8 years.
293. If a sum of money triples in a certain period of A. 7% B. 5%

298. If it was made at a simple interest rate of 16% .
time at a given rate interest, compute the value of the
single payment present worth factor. C. 8% D. 6%
A. P274,000 B. P256,000
A. 0.333 B. 0.292 305. Compute the equivalent compound amount
C. P265,000 D. P247,000 factor if it is compounded continuously.
C. 3.000 D. 1.962
299. If it was made at 16% compounded bi-monthly. A. 1.61607 B. 1.24532
294. If the single payment amount factor for a period

of 5 years is 1.33822. What is the nearest value of the A. P507,267.28 B. P407,283.01 C. 1.24282 D. 0.24245
interest rate?
C. P507,365.96 D. P459,923.44 306. Compute the equivalent present worth
A. 8% B. 5% factor if it is compounded continuously.
A. 1.249347 B. 1.243248 C. 16.67 yrs ; 11.6 yrs ; 11.55 yrs 317. What is the equivalent nominal rate if it is
compounded semi-quarterly?
C. 1.214359 D. 0.616783 D. 17.67 yrs ; 10.2 yrs ; 11.45 yrs
A. 8.00% B. 7.00%
307. A man loan P2000 from the bank. How long For problems 312 – 314:
would it take in years for the amount of the loan and An amount of P50,000 was invested for 3 years. C. 8.24% D. 7.96%
interest to equal P3280 if it was made at 8% simple
interest.
312. Compute its interest at the end of 3 years if it is 318. What is the value of (F/P, 8%, 6) if it is
invested at 10% simple interest. compounded semi-quarterly.
A. P16,550.00 B. P15,000.00
A. 0.524273541 B. 1.487886717
C. P17,492.94 D. P14,242.15
C. 0.787566127 D. 1.612226000
308. A man loan P2000 from the bank. How long
would it take in years if it was made at
313. Compute for its compound interest if it is
8% compounded quarterly. 319. What is the value of (P/F, 6%, 4) if it is
invested at 10% compounded annually.
compounded bi-monthly.
A. P16,550.00 B. P15,000.00
A. 0.524273541 B. 1.487886717
C. P17,492.94 D. P14,242.15
C. 0.787566127 D. 1.612226000
309. A man loan P2000 from the bank. How long
314. Compute its interest if it is invested at 10%
would it take in years if it was made 320. What is the single payment compound
compounded continuously.
at 8% compounded continuously. amount factor for 8% compounded bi-monthly for 5
A. P16,550.00 B. P15,000.00 years.
A. 0.524273541 B. 1.487886717
C. P17,492.94 D. P14,242.15
C. 0.787566127 D. 1.612226000
For Problems 315 – 317:
310. An amount of P1000 becomes P1608.44 after
P200,000 was deposited for a period of 4 yrs. And 6
4 years compounded bi-monthly. Find the nominal For Problems 321 – 323:
months and bears on interest of P85,659.25.
rate of interest, the effective rate of interest, and the If money is invested at a nominal rate of interest of
equivalent rate of interest if it is compounded 8% for a period of 4 years.
quarterly. 315. What is the nominal rate of interest if it is
321.) What is the effective rate if it is compounded
A. 11% ; 12.623% ; 11.42% B. 12% ; 11.06% ; 12.724% continuously?
A. 8.00% B. 7.00%
C. 12% ; 12.616% ; 12.06% D. 11% ; 11.664% ; 11.93% A. 8.33% B. 9.33%
C. 8.24% D. 7.96%
311. How long would it take your money to double C. 8.93% D. 9.93%
itself if it is invested at 6% simple interest, 316. What is the actual rate of interest?
compounded semi-quarterly, and compounded 322.) What is the value of the compound amount
continuously? A. 8.00% B. 7.00% factor if it is compounded continuously?
A. 12.67 yrs ; 11.2 yrs ; 15.05 yrs A. 1.377128 B. 1.424231
C. 8.24% D. 7.96%
B. 18.67 yrs ; 11.6 yrs ; 11.24 yrs C. 0.214212 D. 0.122416
323. What is the value of the present worth A. 7.24% B. 7.92% 335. P200,000 was placed in a time deposit at x
factor if it is compounded continuously? % compounded quarterly and was free of taxes.
After exactly 5 years, the total interest earned was
C. 8.24% D. 8.87%
A. 1. 272441 B. 0.272441 P120,000. What is the value of x?
For Problems 330 – 332: A. 9.5% B. 6.35%

C. 1.726419 D. 0.726149
A businessman loaned P500,000 from a local bank
that charges an interest rate of 12%.
324. If the single payment amount factor for a period C. 8.21% D. 7.12%
of 5 years is 1.33822, what is the nominal rate of
330. How much is he going to pay at the end of 5 years
interest? 336. Which of these gives the lowest effective rate of
if it was made at 12% simple interest?
interest?
A. 6.00% B. 7.00%
A. P800,000.00 B. P911,059.20
A. 12.35% compounded annually
C. 6.92% D. 7.92%
C. P823,243.09 D. P907,009.21
B. 12.2% compounded quarterly
325. What is the effective rate of interest if it is
331. How much is he going to pay at the end of 5 years
compounded semi-annually of problem no. 324?
if it was made at 12% compound semi-quarterly? C. 11.9% compounded semi-annually
A. 5.00% B. 7.24%
A. P800,000.00 B. P911,059.20
D. 11.6% compounded monthly
C. 6.92% D. 6.09%
C. P823,243.09 D. P907,009.21
337. It takes 20.15 years to quadruple your money if
326. What is the equivalent nominal rate if it is it is invested at x% compounded semi-annually. Find
332. How much is he going to pay at the end of 5 years the value of x.
compounded quarterly of problem no. 324?
if it was made at 12% compound continuously?
A. 6.12% B. 4.24% A. 8% B. 7%
A. P800,000.00 B. P911,059.20
C. 5.43% D. 5.87% C. 6% D. 5%
C. P823,243.09 D. P907,009.21
327. Money was invested at x% compounded 338. It takes 13.87 years to treble the money at the
333. P60,000 was deposited at 6% compounded rate of x% compounded quarterly. Compute the
quarterly. If it takes money to quadruple in 17.5
quarterly, tax free for 9 years and 3 months. How value of x.
years, find the value of x.
much interest was earned at the end of the period?
A. 6.23% B. 8.00% A. 5% B. 7%
A. P43,214.24 B. P44,086.60
C. 5.92% D. 9.78% C. 6% D. 8%
C. P43.242.24 D. P44,215.60
328.) What is the actual interest rate of problem 339. Money was invested at x% compounded
334. P100,000 was placed in a time deposit which quarterly. If it takes the money into quadruple in
no. 327?
earned 9% compounded quarterly tax free. After 17.5 years, find the value of x.
how many years would it be able to earn a total
A. 7.24% B. 7.92%
interest of P50,000? A. 8% B. 7%
C. 8.24% D. 8.87% A. 4.56 years B. 3.45 years
C. 6% D. 5%
329.) What is the equivalent rate if problem no. 327 C. 4.23 years D. 3.64 years
is compounded daily? 340. Fifteen years ago P1,000.00 was deposited in a
bank account, and today it is worth P2.370.00. The
bank pays interest semi-annually. What was the 345. The amount of P50,000 was deposited in a bank 351. A couple borrowed P4,000 from a lending
interest rate paid on this account? earning an interest of 7.5% per annum. Determine the company for 6 years at 12%. At the end of 6 years, it
total amount at the end of 5 years, if the principal renews the loan for the amount due plus P4,000 more
and interest were not withdrawn during the period. for 3 years at 12%. What is the lump sum due?
A. 4.9% B. 5.0%
A. P71,781.47 B. P70,374.90 A. P14,842.40 B. P12,316.40
C. 5.8% D. 3.8%
C. P72,475.23 D. P78,536.34 C. P16,712.03 D. P15,382.60
341. You borrow P3,500.00 for one year from a friend
at an interest rate of 1.5% per month instead of taking
346. What is the effective rate corresponding to 18% 352. How long (in years) will it take the money to
a loan from a bank at a rate of 18% per year. Compare
compounded daily? Take 1 year is equal to 360 days. quadruple if it earns 7% compounded semi-
how much money you will save or lose on the
annually?
transaction.
A. 18.35% B. 18.10%
A. pay P155 more if you borrowed from the bank
C. 19.39% D. 19.72%
B. save P55 by borrowing from your friend
347. If P1,000 becomes P1,126.49 after 4 years when
invested at a certain nominal rate of interest 353. P200,000 was deposited on Jan. 1,1988 at an
C. pay P85 more if you borrowed from the bank compounded semi-annually, determine the interest rate of 24% compounded semi-annually.
nominal rate and the corresponding effective rate. How much would the sum be on Jan. 1, 1993?
D. save P95 by borrowing from your friend A. P421,170 B. P401,170
A. 3.00% and 3.02% B. 2.30% and 2.76%
342. Find the present worth of a future payment of C. P521,170 D. P621,170

P1000,000 to be made in 10 years with an interest of C. 4.29% and 4.32% D. 3.97% and 3.95%
12% compounded quarterly. 354. If P500,000 is deposited at a rate of 11.25%
348. Convert 12% semi-annually to compounded compounded monthly, determine the compounded
A. P30,444.44 B. P30,655.68 quarterly. interest after 7 years and 9 months.
A. 19.23% B. 14.67% A. P690,849 B. P680,686

C. P33,000.00 D. P30,546.01
C. 23.56% D. 11.83% C. P670,258 D. P660,592
343. An initial savings deposit of P80,000 in a certain
bank earns 6% interest per annum compounded
monthly. If the earnings from the deposit are subject 349. What is the corresponding effective interest 355. P200,000 was deposited at an interest rate of
to a 20% tax, what would the net value of the deposit rate of 18% compounded semi-quarterly? 24% compounded semi-annually. After how
be after three quarters? many years will the sum be P621,170?
A. 19.25% B. 18.46%
A. P95,324.95 B. P68743.24
C. 19.48% D. 18.95%
C. P82938.28 D. P56244.75
350.) If P5000 shall accumulate for 10 years at 8%
compounded quarterly, find the compounded 356. A bank is advertising 9.5% accounts that
344. The effective rate of interest of 14% compounded interest at the end of 10 years. yields 9.84% annually. How often is the interest
semi-annually is: compounded?
A. P6,005.30 B. P6,040.20
A. 14.49% B. 14.94% A. monthly B. quarterly
C. P6,000.00 D. P6,010.20
C. 14.36% D. 14.88% C. bi-monthly D. daily
357. A marketing company established a program to annual inflation during this period, what rate of method of depreciation, what is the first cost of
replace the cars of its sales representatives at the end return will the investor receive after considering the the machine?
of every 5 years. If the present price of the approved effect of inflation?
type of car is P520,000.00 with a resale value at the A. P125,500 B. P125,000
end of 5 years of 60% its present value, how much A. 2.94% B. 4.25%
money must the company accumulate for 5 years
C. P135,500 D. P135,000
if inflation annually is 10%. Release value will also
C. 3.16% D. 5.16%
appreciate at 10% yearly.
367. A manufacturing plant was built at a cost of P5M
A. P120,289.51 B. P110,297.27 362.) The inflated present worth of P2000 in two and is estimated to have a life of 20 years with a
years is equal to P1471.07. What is the rate of salvage value of P1M. A certain equipment worth
inflation if the interest rate is equal to 10%? P570,000 was installed at a cost of P80,000 is
C. P129,382.38 D. P122,265.69
expected to operate economically for 15 years with
A. 6% B. 7% a salvage value of P50,000. Determine the book
358. In year zero, you invest P10,000.00 in a 15% value of the plant and equipment after 10 years, use
security for 5 years. During that time, the average straight line depreciation method.
C. 5% D. 4%
annual inflation is 6%. How much, in terms of year A. P3,250,000 B. P4,250,000
zero will be in the account at maturity?
363. 12% rate of interest can take care of the cost of
C. P3,750,000 D. P4,500,000
A. P15,386.00 B. P13,382.00 money and inflation. If the nominal rate of
interest is 6%, what is the rate of inflation?
368. A printing equipment costs P73,500 has a life
C. P15,030.00 D. P16,653.00
A. 6.62% B. 7.67% expectancy of 8 years and has a salvage value of
P3,500 at the end of its life. The book value at the end
359. A machine has been purchased and installed at a of x years is equal to P38,500. Using straight line
C. 5.66% D. 4.64%
total cost of P18,000.00. The machine will be retired method of depreciation, solve for the value of x.
at the end of 5 years, at which time it is expected to
have a scrap value of P2,000.00 based on current 364. An engineer bought an equipment for P500,000. A. 5 years B. 6 years
prices. The machine will then be replaced with an Other expenses including installations amounted to
exact duplicate. The company plans to establish a P30,000. At the end of its estimated useful life of 10
reserve fund to accumulate the capital needed to years, the salvage value will be 10% of the first cost.
replace the machine. If an average annual rate of Using straight line method of depreciation,
inflation of 3% is anticipated, how much capital must what is the book value after 5 years? 369. The cost of the printing equipment is P500,000
be accumulated? and the cost of handling and installation is P30,000.
A. P291,500 B. P242,241 If the book value of the equipment at the end of the
A. P15,030.00 B. P12,382.00 3rd year is P242,000 and the life of the equipment is
assumed to be 5 years, determine the salvage
C. P282,242 D. P214,242
value of this equipment at the end of 5 years.
C. P18,548.39 D. P15,386.00
365. A small machine costing P80,000 has a salvage A. P50,000 B. P53,000
360. If the inflation rate is 6%, cost of money is value of x at the end of its life of 5 years. The book
10%, what interest rate will take care of inflation and value at the end of the 4th year is P22,400. What is
C. P60,000 D. P64,000
the cost of money? the value of x using the straight line method
A. 16.6% B. 17.7% depreciation?
370. An engineer bought an equipment for P500,000.
A. P6000 B. P8000 He spent an additional amount of P30,000 for
C. 15.5% D. 14.4%
installation and other expenses. The salvage value is
10% of the first cost. If the book value at the end of 5
C. P7000 D. P9000
361. A man bought a government bond which cost years will be P291,500 using straight line method
P1000 and will pay P50 interest each year for 20 of depreciation, compute the useful life of the
years. The bond will mature at the end of 20 years and 366. A machine has a salvage value of P12,000 at the equipment in years.
he will receive the original P1000. If there is 2% end of its useful life of 6 years. The book value at the
end of 5 years is P30,833.33. Using a straight line
A. 10 years B. 6 years 376. The purchase of a motor for P6000 and a P1,000.00. Find the book value during the first year
generator for P4000 will allow the company to if Sum of the Years Digits(SYD) depreciation is used.
produce its own energy. The configuration can be
assembled for P500. The service will operate for 1600 A. P7,545.45 B. P5,245.92
hours per year for 10 years. The maintenance cost is
371. The cost of equipment is P500,000 and the cost P300 per year, and cost to operate is P0.85 per hour
C. P2,980.24 D. P6,259.98
of installation is P30,000. If the salvage value is 10% for fuel and related cost. Using straight line
of the cost of equipment at the end of 5 years, depreciation, what is the annual cost for the
determine the book value at the end of the fourth operation? There is a P400 salvage value for the 381. A telephone company purchased a microwave
year. Use straight line method. system at the end of 10 year. radio equipment for P6M. Freight and installation
charges amounted to 3% of the purchased price. If the
A. P155,000 B. P146,000 A. P2,710 B. P2,630 equipment shall be depreciated over a period of 8
years with a salvage value of 5%, determine the
depreciation charge during the 5th year using
C. P140,000 D. P132,600 C. P2,480 D. P2,670
the Sum of Year Digit Method.
For Problems 372-374: 377. A machine has an initial cost of P50,00.00 and a A. P756,632.78 B. P652,333.33
The first cost of a machine is P1,800,000 with a salvage value of P10,000.00 after 10 years. What is
salvage value of P300,000 at the end of its life of 5 the straight line method depreciation rate as a
C. P957,902.56 D. P845, 935.76
years. Determine the total depreciation after 3 percentage of the initial cost?
years.
A. 10% B. 12% 382. A consortium of international communications
372. Using Straight Line Method companies contracted for the purchase and
installation of a fiber optic cable linking two major
C. 8% D. 9%
Asian cities at a total cost of P960M. This amount
A. P800,000 B. P900,000
includes freight and installation charges at 10% of the
378. A machine has an initial cost of P50,00.00 and a above total contract price. If the cable depreciated
C. P600,000 D. P700,000 salvage value of P10,000.00 after 10 years. What is over a period of 15 years with zero salvage value, what
the book value after 5 years using straight line is the depreciation charge during the 8th year
373. Using Sum of Years Digit Method method depreciation rate? using the sum of year digits method?
A. P35,000 A. P64 M B. P80 M

A. P1,150,000 B. P1,300,000
B. P15,500 C. P23 M D. P76 M
C. P1,200,000 D. P1,350,600
C. P25,000 383. A machine cost P7,350 has a life of 8 years and
374. Using Constant Percentage Method has a salvage value of P350 at the end of 8 years.
Determine its book value at the end of 4 years using
A. P1,355,024.24 B. P1,246,422.53 D. P30,000
sum years digit method.
C. P1,185,769.76 D. P1,432,624.84 379. A machine has a first of P80,000 and a salvage of A. P3,476.90 B. P6,543.21
P2,000 at the end of its life of 10 years. Find the book
value at the end of the 6th year using straight line
375. An asset is purchased for P9,000.00. Its C. P2,294.44 D. P5,455.01
method of depreciation.
estimated economic life is 10 years after which it will
be sold for P1,000.00. Find the depreciation in the A. P33,200 B. P34,300 384. A certain equipment costs P7,000 has an
first three years using straight line method. economic life of n years and a salvage value P350 at
A. P2,500 B. P3,000 the end of n years. If the book value at the end of 4
C. P35,400 D. P32,900
years is equal to P2197.22, compute for
C. P2,400 D. P2,000 the economic life of the equipment using the sum
380. An asset is purchased for P90,000.00. Its of years digit method.
estimated life is 10 years after which it will be sold for
C. P300,000 D. P900,000 C. Sinking Fund D. Sum of Years Digit
389. A machine costing P720,000 is estimated to have 394. The original cost of a certain machine is
C. 16 years D. 11 years a life of 10 years. If the annual rate of depreciation is P150,000 and has an economic life of 8 years with a
25%, determine the total depreciation using a salvage value of P9,000 at that time. If the
constant percentage of the declining balance method. depreciation of the first year is equal to P44,475, what
385. A company purchased an asset for P10000 and
method is used in the calculation of the depreciation?
plans to keep it for 20 years. If the salvage value is
A. P679,454.27 B. P532,825.73
zero at the end of the 20th year, what is
the depreciation in the third year? Use sum of years A. Straight Line B. Declining Balance
digit method. C. P432,725.45 D. P764,243.33
C. Sinking Fund D. Sum of Years Digit
A. P1000 B. P938
390. An earth moving equipment that cost P90,000
will have an estimated salvage value of P18,000 at the
395. A machine has a first cost of P140,000 and a life
C. P857 D. P747 end of 8 years. Using double-declining balance
of 8 years with a salvage value of P10,000 at the end
method, compute the book value and the total
of its useful life. If the depreciation at the first year
depreciation at the end of the 5th year.
386. An equipment costs P7000 and has a life of 8 amounts to P35,000, what method is used in the
years and salvage value of x after 8 years. If the book calculation of depreciation?
A. P21,357.42 ; P68,642.58B. P24,362.48 ; P65,637.52
value of the equipment at the 4th year is equal to
P2197.22, compute the salvage value x using the
A. Double Declining Balance B. Straight Line
sum of years digit method. C. P15,830.34 ; P74,169.66 D. P19,442.78 ; P70,557.22
A. P594 C. Declining Balance D. Sum of Years Digit

391. A certain office equipment has a first cost of
P20,000 and has a salvage value of P1,000 at the end
B. P350 of 10 years. Determine the depreciation at the end 396. A hydraulic machine cost P180,000 and has a
of the 6th year using Sinking fund method at 3% salvage value of P15,000 at the end of its useful life
interest. which is 12 years. If the depreciation at the first year is
C. P430
P9,780.71, what method is used in computing the
A. P10,720 B. P11,680 depreciation. Assume money is worth 6% annually.
D. P290
C. P12,420 D. P9,840 A. Straight Line B. Declining Balance
387. ABC Corporation makes it policy that for every
new equipment purchased, the annual depreciation
392. An equipment which cost P200,000 has a useful C. Sinking Fund D. Sum of Years Digit
should not exceed 20% of the first cost at any time
life of 8 years with a salvage value of P25,000 at the
without salvage value. Determine the length of
end of its useful life. If the depreciation at the first 397. An equipment costs P480,000 and has a salvage
service if the depreciation used is the SYD Method.
year is P21,875, what method is used in the calculation value of 10% of its cost at the end of its economic life
of depreciation? of 35,000 operating hours. In the first year, it was
used for 4,000 hours. Determine its book value at
A. Straight Line B. Declining Balance the end of the first year.
C. Sinking Fund D. Sum of Years Digit A. P430,629.00 B. P418,360.00
388. A machine having a certain first cost has a life of
10 years and a salvage value of 6.633% of the first cost
393. An equipment costs P8,000 has an economic life C. P380,420.00 D. P376,420.00
at the end of 10 years. If it has a book value of P58,914
of 8 years and salvage value of P400 at the end of 8
at the end of the 6thyear, how much is the first cost of
years. The first year depreciation amounts to 398. An equipment costs P480,000 and has a salvage
the machine if the constant percentage of declining
P1,688.89. What method is used in the calculation of value of 10% of its cost at the end of its economic life
value is used in the computation for its depreciation.
the depreciation? of 36,000 operating hours in a period of 5 years. In
(Matheson’s Method)
the first year of service, it was used for 12,000 hours.
A. Straight Line B. Declining Balance
A. P600,000 B. P100,000
If at the end of the 2nd year it was used for 15,000 C. Pretend stock D. Non par value stock A. Devaluation B. Deflation
hours, find the depreciation at the second year.
403. It is an amount which a willing buyer will pay to C. Inflation D. Depreciation
A. P180,000 B. P190,000
a willing seller for the property where each has equal
advantage and is under no compulsion to buy or sell.
409. A formal organization of producers within
C. P160,000 D. P150,000
industry forming a perfect collusion purposely formed
A. Book value B. Market value to increase profit and block new comers from the
399. A certain machine cost P40,000 and has a life of industry.
4 years and a salvage value of P5000. The production
C. Use value D. Fair value
output of this machine in units per year is 1000 units
A. Cartel B. Monopoly
for the first year, 2000 units for the second year, 3000
units for the third year, and 4000 units for the fourth 404. ____ is the loss of value of the equipment with
year. If the units produced are in uniform quality, use over a period of time. It could mean a difference in C. Corporation D. Competitors
what is the depreciation charge at the end of the value between a new asset and the use asset currently
fourth year. in a service.
410. A market situation where there is only one seller
with many buyer.
A. P14,000 B. P15,000 A. Loss B. Depreciation
A. Monopoly B. Monophony
C. P13,000 D. P16,000 C. Extracted D. Gain
C. Oligopoly D. Perfect competition
400. A lathe machine costs P300,000 brand new with 405. An economic condition in which there are so few
a salvage value of x pesos. The machine is expected to suppliers of a particular product that one supplier’s
last for 28500 hours in a period of 5 years. In the first 411. A market situation where there is one seller and
actions significantly affect prices and supply.
year of service it was used for 8000 hours. If the book buyer.
value at the end of the first year is P220,000, compute
for the salvage value x in pesos. A. Oligopoly B. Monopsony
A. Bilateral monopoly B. Monopoly
A. P15,000 B. P12,000 C. Monopoly D. Perfect competition
C. Oligopoly D. Bilateral Monopoly
C. P18,000 D. P20,000 406. A market whereby there is only one buyer of an
412. Reduction in the level of national income and
item for when there are no goods substitute.
output usually accompanied by a fall in the general
price level.
A. Monopsony B. Monopoly
401. It is defined to be the capacity of a commodity to
satisfy human want A. Deflation B. Inflation
C. Oligopoly D. Oligopsony
A. Necessity B. Utility C. Devaluation D. Depreciation
407. It is the worth of a property as recorded in the
book of an enterprise.
C. Luxuries D. Discount 413. A series of equal payments made at equal interval
of time.
A. Salvage value B. Price
402. It is the stock that has prior to dividends. It
usually does not bring voting right to the owners and A. Annuity B. Amortization
the dividend is fixed and cannot be higher than the C. Book value D. Scrap value
specified amount. C. Depreciation D. Bonds
408. Reduction in the level of nation income and
A. Common stock B. Voting stock output usually accompanied by a fall in the general
414. The money paid for the use of borrowed capital.
price level.
A. Interest B. Amortization A. Tally B. Par value C. Book value D. Market value
C. Annuity D. Bonds C. Check and balance D. Break even 427. The sum of the direct labor cost incurred in the
factory and the direct material cost of all materials
that go into production is called
415. The place where buyers and sellers come 421. The amount which has been spent or capital
together. invested which for some reasons cannot be retrieved.
A. Net cost B. Maintenance cost
A. Maker B. Store A. Sunk cost B. Fixed costs
C. Prime cost D. Operating cost
C. Bargain center D. Port C. Depletion cost D. Construction cost
428. The difference between the present value and the
worth of money at some time in the future is called
416. The value of the stock as stated on the stocks 422. An obligation with no condition attach is called
certificate
A. Market value B. Net value
A. Personal B. Gratuitous
A. Stock value B. Par value
C. Discount D. Interest
C. Concealed D. Private
C. Interest D. Maturity value
429. The addition cost of producing one more unit is
423. The sum of all the costs necessary to prepare a
417. A market situation in which two competing construction project for operation.
buyers exert controlling influence over many sellers. A. Prime cost B. Marginal cost
A. Operation costs B. Construction cost
A. Bilateral monopoly B. Oligopoly C. Differential cost D. Sunk cost
C. Depletion cost D. Production cost
C. Duopsony D. Duopoly 430. A written contract by a debtor to pay final
redemption value on an indicated date or maturity
424. The amount received from the sale of an addition
date and pay a certain sum periodically.
418. A market situation in which two powerful groups unit of a product.
or organizations dominate commerce in one business
market or commodity. A. Annuity B. Bond
A. Marginal cost B. Marginal revenue
A. Oligopoly B. Duopoly C. Amortization D. Collateral

C. Extra profit D. Prime cost
C. Duopsony D. Duopoly 431. Estimated value of the property at the useful life.
425. The amount that the property would give if sold
for junk.
419. The type of annuity where the first payment is A. Market value B. Fair value
made after several periods, after the beginning of the
A. Junk value B. Salvage value
payment.
C. Salvage value D. Book value
C. Scrap value D. Book value
A. Perpetuity B. Ordinary annuity
432. Determination of the actual quantity of the
materials on hand as of a given date.
426. The worth of the property which is equal to the
C. Annuity due D. Deferred annuity
original cost less the amount which has been charged
to depreciation. A. Physical inventory B. Counting principle
420. The condition in which the total income equals
the total operating expenses.
A. Scrap value B. Salvage value C. Stock assessment D. Periodic material
update
433. This consists of a cash and account receivable C. Book value D. Par value C. Monopoly D. Cartel
during the next period or any other material which
will be sold.
439. Decreases in the value of a physical property due 445. These are products or services that are desired by
to the passage of time. human and will be purchased if money is available
A. Fixed assets B. Deferred charges after the required necessities have been obtained.
A. Deflation B. Depletion
C. Current asset D. Liability A. Commodities B. Necessities
C. Declination D. Depreciation
434. A wrong act that causes injury to a person or C. Luxuries D. Supplies
property and for which allows a claim by the injured
440. An association of two or more individuals for the
party to recover damages.
purpose of engaging business for profit. 446. Grand total of the assets and operational
capability of a corporation.
A. Fraud B. Tort
A. Single proprietorship B. Party
A. Authorized capital B. Paid off capital
C. Libel D. Scam
C. Corporation D. Partnership
C. Subscribed capital D. Investment
435. A series of uniform payment over an infinite
441. The simplest form of business organization where
period of time
in the business is own entirely by one person. 447. It is where the original record of a business
transaction is recorded.
A. Depletion B. Capitalized cost
A. Partnership B. Proprietorship
A. Ledger B. Spreadsheet
C. Perpetuity D. Inflation
C. Corporation D. Joint venture
C. Journal D. Logbook
436. These are products or services that are required
442. Parties whose consent or signature in a contract
to support human life and activities that will be
is not considered intelligent. 448. The length of time which the property may be
purchased in somewhat the same quantity event
operated at a profit.
though the price varies considerably.
A. Dummy person B. Minors
A. Life span B. Economic life
A. Commodities B. Necessities
C. Demented persons D. Convict
C. Operating life D. Profitable life
C. Demands D. Luxury
443. It is defined as the capacity of a commodity to
satisfy human want. 449. The right and privilege granted to an individual
437. The quantity of a certain commodity that is
or corporation to do business in a certain region.
offered for sale at a certain price at a given place and
time. A. Satisfaction B. Luxury
A. Permit B. Royalty
A. Utility B. Supply C. Necessity D. Utility
C. License D. Franchise
C. Stocks D. Goods 444. This occurs in a situation where a commodity or
service is supplied by a number of vendors and there 450. The worth of an asset as shown in the accounting
is nothing to prevent additional vendors entering the records of an enterprise.
438. It is sometimes called the second hand value
market.
A. Fair value B. Par value
A. Scrap value B. Salvage value
A. Perfect competition B. Monophony
C. Market value D. Book value
Direct material – P0.30 per unit A. P30,000 B. P31,000
451. A bookstore purchased a best-selling book at

P200.00 per copy. At what price should this book be Direct labor – P0.50 per unit C. P32,000 D. P33,000
sold so that by giving a 20% discount, the profit is
30%. Testing set-up – P300.00 per set-up 459. Jojo bought a second-hand Betamax VCR and
then sold it to Rudy at a profit of 40%. Rudy then sold
A. P200.00 B. P300.00 the VCR to Noel at a profit of 20%. If Noel paid
It is decided to subcontract the manufacturing of
P2,856 more than it costs Jojo, how much did Jojo
assembly B to an outside company. For an order of
pay for the unit?
C. P400.00 D. P500.00 100 units, what is the cost per unit that is acceptable
to the company?
A. P4,100 B. P3,900
452. A businessman wishes to earn 7% on his capital
after payment of taxes. If the income from an available A. P3.80 B. P4.00
investment will be taxed at an average of 42%, what C. P4,000 D. P4,200
minimum rate of return, before payment of taxes, C. P4.10 D. P4.20
must the investment offer to be justified? 460. The selling price of a TV set is double that of its
net cost. If the TV set is sold to a customer at a profit
456. By selling balut at P5 per dozen, a vendor gains
A. 13.02% B. 12.07% of 25% of the net cost, how much discount was given
20%. The cost of the eggs rises by 12.5%. If he sells at
to the customer?
the same price as before, find his new gain in %.
C. 10.89% D. 11.08%
A. 37.5% B. 37.9%
A. 6.89% B. 6.67%
453. A manufacturing firm maintains one product
assembly line to produce signal generators. Weekly C. 38.2% D. 38.5%
C. 6.58% D. 6.12%
demand for the generators is 35 units. The line
operates for 7 hours per day, 5 days per week. What is 461. A Mechanical Engineer who was awarded a
457. An equipment installation job in the completion
the maximum production time per unit in hours P450,000 contract to install the machineries of an oil
stage can be completed in 50 days of 8 hour/day work,
required of the line to meet the demand? mill failed to finish the work on time. As provided for
with 50 men working. With the contract expiring in
in the contract, he has to pay a daily penalty
40 days, the mechanical engineer contractor decided
A. 1 hour B. 1 hour and 10 minutes equivalent to one fourth of one per cent per day for
to add 15 men on the job, overtime not being
the first 10 days and 0.5% per day for the next 10 days
permitted.
and one per cent per day for everyday thereafter. If the
C. 1 hour and 15 minutes D. 1 hour and 30 minutes total penalty was P60,750.00, how many days was the
If the liquidated damages is P5,000 per day of delay, completion of the contract delayed?
454. Froyd Corporation’s gross margin is 45% of sales. and the men are paid P150 per day, how much money
Operating expenses such as sales and administration would he save with the additional workers?
A. 26 days B. 27 days
are 15% of sales. Froyd Corporation is in 40% tax
bracket. What percent of sales is their profit after A. P43,450 B. P43,750
taxes? C. 28 days D. 29 days
C. P44,250 D. P44,750
A. 21% B. 20% 462. The quarrying cost of marble and granite blocks
plus delivery cost to the processing plant each is
458. In a certain department store, the monthly salary P2,400.00 per cubic meter. Processing cost of marble
C. 19% D. 18% of a saleslady is partly constant and partly varies as into tile is P200.00 per square meter and that of the
the value of her sales for the month. When the value of granite into tiles also is P600.00 per square meter.
455. In determining the cost involved in fabricating her sales for the month is P10,000.00, her salary for
sub-assembly B within a company, the following data the month is P900.00. When her monthly sales go up
If marble has a net yield of 40 square meters of tile
have been gathered: to P12,000.00, her monthly salary goes up to
per cubic meter of block and sells P400 per square
P1,000.00. What must be the value of her sales so that
meter, and granite gives a net yield of 50 square
her salary for the month will be P2,000.00?
meters of tiles per cubic meter of block and sells at
P1000 per square meter. Considering all other costs to B. Concrete pavement, 10 in thick (labor and weeks working 6 days a week. The project requires
be the same, the granite is more profitable than the materials) including curing = P220 per sq. Meter 16,670 cubic meter of asphalt mix per kilometre of
marble by how much? road. If the asphalt mix is to be hauled by a contractor
at P42 per cubic meter per km of haul. How much
C. Curbs and gutters = P12 per linear meter
is site B more expensive than site A?
A. P12,000 per cubic meterB. P13,000 per cubic meter
How much will the project cost allowing 15% for A. P949,645 B. P962,101
C. P14,000 per cubic meterD. P15,000 per cubic contingency?
meter
C. P956,807 D. P974,090
A. P1,207,000 B. P1,207,500
463. A man would like to invest P50,000 in
468. A fixed capital investment of P10,000,000 is
government bonds and stocks that will give an overall
C. P1,208,000 D. P1,208,500 required for a proposed manufacturing plant and an
annual return of about 5%. The money to be invested
estimated working capital of P2,000,000. Annual
in government bonds will give an annual return of
466. An electric utility purchases 2,300,000 kw-hr per depreciation is estimated to be 10% of the fixed capital
4.5% and the stocks of about 6%. The investments are
month of electric energy from National Power investment. Determine the rate of return on the total
in units of P100.00 each. If he desires to keep his
Corporation at P2.00 per kw-hr and sells all this to investment if the annual profit is P2,500,000.
stock investment to minimum in order to reduce his
risk, determine how many stocks should be consumers after deducting distribution losses of 20%.
purchased. At what average rate per kw-hr should this energy be A. 28.33% B. 29.34%
sold to break even if the following are other monthly
expenses in its operation:
A. 165 B. 166 C. 30.12% D. 30.78%
C. 167 D. 168 Salaries P750,000 469. A call to bid was advertised in the Philippine
Daily Inquirer for the construction of a transmission
Depreciation P2,250,000 line from a mini-hydroelectric power plant to the
464. A 220 V 2 hp motor has an efficiency of 80%. If
substation which is 5.035 kilometers away. The
power costs P3.00 per kw-hr for the first 50 kw-hr,
Interest P700,000 tanalised timber electrical posts must be placed at an
2.90 per kw-hr for the second 50 kw-hr, P2.80 for the
interval of 50 m. The electrical posts must be 30 feet
third kw-hr and so on until a minimum of P2.50 per
kw-hr is reached. How much does it cost to run this Maintenance P300,000 long, 8 inches in diameter at the tip and 12 inches in
diameter at the butt. The power house is 15 m from
motor continuously for 7 days?
Miscellaneous P200,000 the first electric post and the substation is 20 m from
the last electric post. Compute the estimated cost for
A. P800 B. P820 A. P4.90 B. P5.20 the project using the following data:
C. P840 D. P860 C. P5.90 D. P6.30 Cost of one tanalised timber post 30 feet long is
P5,000 including delivery to the site. Labourer at
465. An 8-meter concrete road pavement 500 meters 467. An engineer bidding on the asphalting of 7 km P180 per day and 5 laborers can dig and erect 3 posts
long is desired to be constructed over a well- stretch of road is confronted with a problem of per day. Electrician at P250 per day and 4 electricians
compacted gravel road, together with the necessary choosing between two possible sites on which to set- can strung wires complete 150 meters per day. Electric
concrete curbs and gutters on both sides. In order to up the asphalt-mixing machine. wire cost P4.00 per meter. Use only 5 laborers and 4
put the subgrade on an even level grade, a 500 cubic electricians for the project and is supervised by a
meters of sand filling is necessary, over which the 10 foreman which is paid at P400 per day. Contingency is
inch concrete pavement will be placed? 10% and profit is 25%.
Average hauling distance
Assume the following data: Monthly rental A. P745,890.23 B. P817,692.00
Installing and dismantling of machine C. P789,120.80 D. P829,592.50

A. Sand fill, including rolling and watering = P100 per
cubic meter At Site A, it would be necessary to hire 2 flagmen at
P150 per working day. The job can be completed in 32
470. Upon the retirement after 44 years in 475. If P1000 accumulates to P1500 when invested at
C P400 70
government service, Mrs. Salud Araoarao was able to a simple interest for three years, what is the rate of
get a retirement lump sum of P2,300,000. As a hedge If gold can be sold at P4,000 per ounce, which method interest?
against inflation, she decided to use a part of it of processing yield the biggest return?
invested in real state at Pagadian City and the
A. 14.12% B. 15.89%
remainder were invested as follows:
A. Processing method A B. Processing method B
C. 16.67% D. 16.97%
A. 30% in T-bills earning 12% interest
C. Processing method C D. Either of the processing
methods B or C 476. You loan from a loan firm an amount of
B. 35% in money market placement earning 14%
P100,000 with a rate of simple interest of 20% but the
473. JRT Motors Inc. has been shipping its Suzuki interest was deducted from the loan at the time the
C. 35% in blue chip stock earning 13% engines in containers to avoid the necessary crating of money was borrowed. If at the end of one year, you
the engines. JRT Motors Inc. will pay freight on have to pay the full amount of P100,000, what is the
container load of 40 tons, regardless of whether or not actual rate of interest?
If her annual earnings from the T-bills, money market
the container is completely filled with engines. Record
and stock is P50,000, How much did she invests in
shows that due to engine size, JRT Motors Inc. has
real estate? A. 23.5% B. 24.7%
shipped only 30 tons per container. Freight of
container cost P3.00 per kilograms.
A. P2,091,639.12 B. P1,916,858.24 C. 25.0% D. 25.8%
If the engines are crated so that they can be shipped at
C. P1,856,120.53 D. P1,790,274.78 the rate of P3.50 per hundred kilograms with the 477. A loan of P5,000 is made for a period of 15
freight bill computed only on the actual weight months, at a simple interest rate of 15%, what future
shipped. The cost of crating would be P50 per engine amount is due at the end of the loan period?
471. The monthly demand for ice cans being
manufactured by Mr. Alarde is 3200 pieces. With a and would increase the shipping weight from 1500 kg
manual operated guillotine, the unit cuffing cost is to 1520 kg per engine. How much more economical A. P5,937.50 B. P5,873.20
P25.00. An electrically operated hydraulic guillotine shipping the engine in crates than in containers?
was offered to Mr. Alarde at a price of P275,000.00
C. P5,712.40 D. P5,690.12
and which cuts by 30% the unit cuffing cost. A. P670 per engine B. P630 per engine
Disregarding the cost of money, how many months
will Mr. Alarde be able to recover the cost of the 478. If you borrowed money from your friend with
C. P650 per engine D. P610 per engine simple interest at 12%, find the present worth of
machine if he decides to buy now?
P50,000, which is due at the end of 7 months.
474. A paint manufacturing company uses a sand mill
A. 10 months B. 11 months
for fine grinding of paint with an output of 100 liters A. P46,728.97 B. P47,098.12
per hour using glass beads as grinding media. Media
C. 12 months D. 13 months load in the mill is 25 kg costing P200.00 per kg and is
fully replenished in 2 months time at 8 hours per day C. P47,890.12 D. P48,090.21
472. In a new gold mining area in Southern Leyte the operation, 25 days a month. A ceramic grinding media
ore contains on the average of ten ounces of gold per is offered to this paint company, costing P400 per kg 479. Mr. J. Reyes borrowed money from the bank. He
ton. Different methods of processing are tabulated as and needs 30 kg load in the sand mill, but guarantees received from the bank P1,842 and promised to repay
follows: an output of 120 liters per hour and full P2,000 at the end of 10 months. Determine the rate of
replenishment of media in 3 months. If profit on paint simple interest.
reduction is P15 per liter how much is a difference in
Processing Cost per profit between the two media?
A. 12.19% B. 12.03%
Method ton % Recovery
A. P436,900 B. P462,000
A P5,500 90 C. 11.54% D. 10.29%
C. P473,000 D. P498,200
B P2,500 80
480. If you borrowed P10,000 from a bank with 18% 485. What will be the future worth of money after 12 C. 12.67% D. 12.87%
interest per annum, what is the total amount to be months if the sum of P25,000 is invested today at
repaid at the end of one year? simple interest rate of 1% per month?
490. A man borrowed P20,000 from a local
commercial bank which has a simple interest of 16%
A. P10,900 B. P11,200 A. P28,000 B. P28,165 but the interest is to be deducted from the loan at the
time that the money was borrowed and the loan is
payable at the end of one year. How much is the actual
C. P11,800 D. P12,000 C. P28,289 D. P28,250
rate of interest?
481. A price tag of P1,200 is payable in 60 days but if 486. 480 It is the practice of almost all banks in the
A. 19.05% B. 19.34%
paid within 30 days it will have a 3% discount. Find Philippines that when they grant a loan, the interest
the rate of interest. for one year is automatically deducted from the
principal amount upon release of money to a C. 19.67% D. 19.87%
borrower. Let us therefore assume that you applied for
A. 35.45% B. 35.89%
a loan with a bank and the P80,000 was approved at
491. P4,000 is borrowed for 75 days at 16% per
an interest rate of 14% of which P11,200 was deducted
annum simple interest. How much will be due at the
C. 36.18% D. 37.11% and you were given a check of P68,800. Since you
end of 75 days?
have to pay the amount of P80,000 one year after,
482. A man borrowed P2,000 from a bank and what then will be the effective interest rate?
A. P4,033.33 B. P4,333.33
promised to pay the amount for one year. He received
only the amount of P1,920 after the bank collected an A. 16.02% B. 16.28%
advance interest of P80.00. What was the rate of C. P4,133.33 D. P4,666.67
discount?
C. 16.32% D. 16.47%
492. Agnes Abanilla was granted a loan of P20,000 by
A. 3.67% B. 4.00% her employer CPM Industrial Fabricator and
487. A deposit of P110,000 was made for 31 days. The
Construction Corporation with an interest rate of 6%
net interest after deducting 20% withholding tax is
for 180 days on the principal collected in advance. The
C. 4.15% D. 4.25% P890.36. Find the rate of return annually.
corporation would accept a promissory note for
P20,000 non-interest for 180 days. If discounted at
483. A man borrowed P2,000 from a bank and A. 11.50% B. 11.75% once, find the proceeds of the note.
promised to pay the amount for one year. He received
only the amount of P1,920 after the bank collected an
C. 11.95% D. 12.32% A. P18,800 B. P18,900
advance interest of P80.00. What was the rate of
interest that the bank collected in advance?
488. P5,000 is borrowed for 75 days at 16% per C. P19,000 D. P19,100
annum simple interest. How much will be due at the
A. 4.00% B. 4.07%
end of 75 days?
493. If you borrow money from your friend with
simple interest of 12%, find the present worth of
C. 4.17% D. 4.25%
A. P5,066.67 B. P5,133.33 P20,000 which is due at the end of nine months.
484. What will be the future worth of money after 12

C. P5,050.00 D. P5,166.67 A. P18,992.08 B. P18,782.18
months if the sum of P25,000 is invested today at
simple interest rate of 1% per year?
489. A businessman wishes to earn 7% on his capital C. P18,348.62 D. P18,120.45
after payment of taxes. If the income from an available
A. P25,168 B. P25,175
investment will be taxed at an average rate of 42%,
494. A man borrowed from a bank under a promissory
what minimum rate of return, before payment of
note that he signed in the amount of P25,000.00 for a
C. P25,189 D. P25,250 taxes, must the investment offer to be justified?
period of one year. He receives only the amount of
P21,915.00 after the bank collected the advance
A. 12.07% B. 12.34% interest and an additional of P85.00 for notarial and
inspection fees. What was the rate of interest that the A. 15.47% B. 15.69%
bank collected in advance?
C. 15.80% D. 15.96%
A. 13.05% B. 13.22%
499. Determine the exact simple interest on P5,000
C. 13.46% D. 13.64% invested for the period from January 15,1996 to
October 12,1996, if the rate interest is 18%.
495. Mr. Danilo Conde borrowed money from a bank.
He received from the bank P1,340.00 and promised to A. P664.23
pay P1,500.00 at the end of 9 months. Determine rate
of simple interest.
B. P664.89
A. 15.92% B. 15.75%
C. P665.21
C. 15.45% D. 15.08%
D. P666.39
496. Mr. J. Dela Cruz borrowed money from a bank.

500. The exact simple interest of P5,000 invested
He receives from the bank P1,340.00 and promised to
from June 21,1995 to December 25,1995 is P100.
pay P1,500.00 at the end of 9 months. Determine the
What is the rate of interest?
corresponding discount rate or often referred to as the
“banker’s discount.”
A. 3.90% B. 3.92%
A. 13.15% B. 13.32%
C. 3.95% D. 3.98%
C. 13.46% D. 13.73%
497. Annie buys a television set from a merchant who

ask P1,250.00 at the end of 60 days. Annie wishes to
pay immediately and the merchant offers to compute
the cash price on the assumption that money is worth
8% simple interest. What is the cash price?
A. P1,124.67 B. P1,233.55
C. P1,289.08 D. P1,302.67
498. A man borrowed money from a loan shark. He

receives from the loan shark and amount of P1,342.00
and promised to repay P1,500.00 at the end of 3
quarters. What is the simple interest rate?

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Engineering Economy looksfam an interest rate of 14% of which P11,200 was deducted

and you were given a check of P68,800. Since you

A. 6.89 % B. 6.65 % A. 5,937.50 B. 5,873.20

18. What rate of interest compounded annually is the A. P 150.56 B. P 152.88

31. What is the present worth of a P500 annuity A. P 43,600.10 B. P 43,489.47

36. A person buys a piece of lot for P 100,000

A. Seller B. Manufacturer 70. What is another term for “perfect competition”?

C. Producer D. Buyer or consumer A. Atomistic competition B. No-limit competition

A. Annuity B. Amortization 102. What type of bond is issued jointly by two or

A. Fair value B. Market value

A. Company value B. Going value

C. Incorporator’s stock D. Presidential stock C. Earning value D. Gain

151. Which is true about corporation?

C. Corporation D. Stockholders A. Proprietorship B. Assets

A. Compulsory saving B. Consumer saving

A. Capital recovery B. Cash flow

C. First cost + cost of perpetual maintenance A. Liquidity B. Solvency

209. What is an inventory turnover?

C. 365 / inventory turnover

213. What is defined as the length of time usually in A. Deflation B. Inflation

A. Straight line method and sinking fund method C. Check D. Coupon

C. 8.28% D. 10.28% 285. What is the nominal rate of interest compounded

276. A certain amount was deposited 5 years and 9 A. 19.72% B. 21.20%

287. If the nominal interest is 12% compounded

293. If a sum of money triples in a certain period of A. 7% B. 5%

294. If the single payment amount factor for a period

For Problems 330 – 332: A. 9.5% B. 6.35%

342. Find the present worth of a future payment of C. P521,170 D. P621,170

A. 19.23% B. 14.67% A. P690,849 B. P680,686

A. P35,000 A. P64 M B. P80 M

A. P594 C. Declining Balance D. Sum of Years Digit

A. Oligopoly B. Duopoly C. Amortization D. Collateral

451. A bookstore purchased a best-selling book at

Assume the following data: Monthly rental A. P745,890.23 B. P817,692.00

Installing and dismantling of machine C. P789,120.80 D. P829,592.50

484. What will be the future worth of money after 12

496. Mr. J. Dela Cruz borrowed money from a bank.

497. Annie buys a television set from a merchant who

498. A man borrowed money from a loan shark. He

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