1.) What is the term for an annuity with a fixed time span?

- C. annuity certain
2.) What is the type of annuity where the payments are made at the end of each period starting
from the first period?
- A. ordinary annuity
3.) What is the type of annuity where the payments are made at the beginning of each period
starting from the first period?
- B. annuity due
4.) What is the type of annuity that does not have a fixed time span but continues indefinitely or
forever?
- C. perpetuity
5.) What is the type of annuity where the first payment does not begin until some later date in the
cash flow?
- D. deferred annuity
6.) Carefully define the problem! Then the choice (decision) is among alternatives.
- T
7.) Only the differences in expected future outcomes among the alternatives are irrelevant to their
comparison and should be considered in the decision.
- F
8.) The prospective outcomes of the alternatives, economic and other, should be consistently
developed from a defined viewpoint (perspective).
- T
9.) Using a common unit of measurement to enumerate as many of the prospective outcomes as
possible will not simplify the analysis of the alternatives.
- F
10.) Selection of a preferred alternative (decision making) requires the use of a criterion (or several
criteria).
- T
11.) The analysis of the alternatives do not involves projecting or estimating the future
consequences associated with each of them.
- F
12.) A good decision-making process can result in a decision that has an undesirable outcome.
- T
13.) The decision maker in an organization will normally select the alternative that will best serve
the short-term interests of the owners of the organization.
- F
14.) The time value of money explains the change in the amount of money over time for funds that
are owned (invested) or owed (borrowed)
- T
15.) Economic equivalence is a combination of interest rate and time value of money to determine
the same amounts of money at different points in time that are equal in economic value
- F
16.) What is defined as the analysis and evaluation of the monetary consequences by using the
theories and principles of economics to engineering applications, designs and projects?
- C. engineering economy
17.) What is considered as the standard unit which forms the basis of a country’s domestic money
supply?
- A. monetary unit
18.) What is defined as the interest on a loan or principal that is based only on the original amount
of the loan or principal?
- D. simple interest
19.) Under ordinary simple interest, how many days is one year?
- B. 360
20.) Under exact simple interest, how many days is one year if it is not leap year?
- C. 365
21.) What refers to the cumulative effect of elapsed time on the money value of an event, based on
the earning power of equivalent invested fund or capital should or will earn?
- C. time value of money
22.) What refers to the ratio of the interest payment to the principal for a given unit of time and
usually expressed as a percentage of the principal?
- B. interest rate
23.) What is defined as the interest of loan or principal which is based not only on the original
amount of the loan or principal but the amount of loaned or principal plus the previous
accumulated interest?
- C. compound interest
24.) A uniform series of payment occurring at equal interval of time is called ____.
- A. annuity
25.) A mathematical expression also known as the present value of annuity of one is called ___.
- D. present worth factor
26.) The unrecovered depreciation which results due to poor estimates as to the life of the
equipment is called ____.
- A. sunk cost
27.)What refers to the present worth of cost associated with an asset for an infinite period of time?
- C. capitalized cost
28.)The true value of interest rate computed by equations for compound interest for a 1 year period
is known as ___.
- C. effective interest
29.)What refers to the need, want or desire for a product backed by the money to purchase it?
- B. Demand
30.)What refers to the amount of a product made available for sale?
- A. Supply
31.) What refers to an imaginary cost representing what will not be received if a particular strategy
is rejected?
- A. Opportunity cost
32.)Cash money and credit necessary to establish and operate an enterprise are generally called
______.
- A. Capital
33.)This cost changed based on the sales activity.
- A. Variable cost
34.)Capitalized cost of any structure or property is computed by which formula?
- C. First cost + cost of perpetual maintenance
35.)It is defined as basic annual rate of interest computed by equations for compound interest for a
1 year period is known as ______.
- B. Nominal interest
36.)Determine if the given cost is fixed or variable cost:
interest on borrowed capital
- A. Fixed
37.)Determine if the given cost is fixed or variable cost:
rental cost of a warehouse
- A. Fixed 
38.)Determine if the given cost is fixed or variable cost:
Taxes
- B. Variable 
39.)Determine if the given cost is fixed or variable cost:
raw material cost
- B. Variable 
40.)Determine if the given cost is fixed or variable cost:
administrative salaries
- A. Fixed 
41.)Determine if the given cost is fixed or variable cost:
direct labor cost
- B. Variable 
42.)Determine if the given cost is fixed or variable cost:
power cost
- B. Variable 
43.)Determine if the given cost is fixed or variable cost:
license fees
- A. Fixed 
44.)Determine if the given cost is fixed or variable cost:
Cellphone and Internet Plans
- A. Fixed 
45.)Determine if the given cost is fixed or variable cost:
shipping charges
- B. Variable 
46.) Assume an employee has a meeting with a potential client. The employee spends P3500 on
airfare, P500 on Uber rides, P3500 on a hotel, and P1300 on meals—all charged to their own
credit card. After the trip, the employee submits an expense report for the trip. The employer
then issues a reimbursement check to the employee. How much is the out-of-pocket cost?
- P8,800
47.)If the cost of alternative A is P12,000 per year and the cost of alternative B is P8,000 per year.
The differential cost is?
- P4,000
48.)A Company XYZ is into the manufacturing of kid toys. They manufacture different kinds of small
or big size toys, soft toys, and automatic toys. They initially spent P 130,000 on purchasing
equipment and machinery for their manufacturing plant. Over time, due to the change in the
toy industry, the company needed advance kind of machinery, and the board has decided to
replace old machinery with a new one. The company has sold old machinery at P 20,000. How
much is the sunk cost of the machinery?
- P110,000
49.)You have a job in a company that pays you P400,000 per year. For a better future, you want to
get a Master’s degree that could cost P100,000 but cannot continue your job while studying. If
you decide to give up your job and return to school to earn a Master’s degree, how much would
be your opportunity cost?
- P500,000
50.)Big Trucks INC. is a company that provides car rental services. The company’s fleet is mostly
made up of big trucks for people in the construction business. The company has to replace one
of his cars because it is too old and clients don’t want to lease it anymore. The truck was initially
bought at P2,000,000 and can be sold at P50,000, but the current market price of a similar truck
is P2,300,000. How much is the replacement cost?
- P2,250,000