his investment at the end of 15 years. 39.

What refers to an imaginary cost representing what

Smart EDGE ECE Review Specialist A. P133,454.58

C. P331,454.58
B. P331,545.58
D. P133,545.58
will not be received if a particular strategy is rejected?
A. Opportunity cost
B. Horizon cost
C. Ghost cost
D. Null cost
29. An arithmetic gradient with series of end of period
payments of P 10,000 on the 1st year, P 8,000 on the 40. “Under conditions of perfect competition the price at
MASTERY QUESTION GUIDES in ENGINEERING ECONOMY 2nd year, P 6,000 on the 3rd year, P 4,000 on the 4th which a given product will be supplied and purchased is
year and P 2,000 on the 5th year. If interest rate is the price that will result in the supply and the demand
12%, what is its present worth? being equal.”
INSTRUCTION: Select the correct answer for each of the following questions. A. P 12,125 B. P 23,007 C. P 22,565 D. P 23,254 Law of Supply
30. The maintenance cost for a sewing machine this B. Law of Supply and Demand
1. Find the interest on P6800.00 for 3 years at 11% 12. Monthly? A. P7658.81 C. P5678.81 year is expected to be P500. The cost will increase by C. Law of Demand
simple interest. A. 3.987% B. 4.02% C. 4.06% D. 4% B. P6758.81 D. P5687.81 P50 each year for the subsequent 9 years. The interest D. Law of Diminishing Return
A. P1,875.00 B. P1,987.00 C. P2,144.00 D. P2,244.00 13. Semi – annually? 22. A businessman is faced with the prospect of is 8% compounded annually. What is the present worth 41. A bridge has an initial cost of P600000 and whose
2. How many years will it take the principal amount to A. 3.987% B. 4.02% C. 4.06% D. 4% fluctuating future budget for the maintenance of the of maintenance for the machine over the full 10 years? estimated life is 30 years. The annual maintenance cost is
double if it is invested in an account that gives 10% 14. Annually? generator. During the first 5 years, P1,000 per year will A. P4635.88 B. P6435.88 C. P4653.88 D. P6453.88 P6000 and the cost of repair is P25000 every 5 years.
ordinary simple interest. A. 3.987% B. 4.02% C. 4.06% D. 4% be budgeted. During the second 5 years, the annual 31. A newly acquired machine requires an annual Find the capitalized cost if the salvage value is P30000
A. 5 B. 8 C. 10 D. 16 budget will be P1500 per year. In addition, P3500 will be maintenance cost of 10,000 pesos. If the annual and cost of money is 9%.
15. What is the present worth of money if Php 8000.00
3. A man borrows Php 800.00 from Engr. Ronnie Yu and is paid after 3 years? The money is worth 8% budgeted for an overhaul of the machine at the end of maintenance cost increases by 20% each year for 10 A. P757506.92 C. P757560.92
promised to repay him Php 850.00 after 1.5 years. What compounded continuously. the fourth year and another P3500 for an overhaul at years, what is the estimated present worth of the B. P575706.92 D. P575760.92
is the interest rate assuming ordinary simple interest? A. Php 6293.02 C. Php 2693.02 the end of 8th year. Assuming compounded interest at maintenance costs if money is worth 15%? 42. An item is purchased for P100,000.00. Annual cost
A. 3.7% B. 4.2% C. 2.1% D. 5.6% B. Php 2963.02 D. Php 3296.02 6% per annum, what is the equivalent annual cost of A. P 106,100 B. P 126,100 C. P 116,100 D. P 136,100 are P18,000.00. Using 8%, what is the capitalized cost of
4. From August 22, 2011 to February 22, 2012, maintenance? 32. The annual maintenance cost of a generator is perpetual service?
16. Determine the effective rate of 8% compounded A. P1,888.87 B. P2,888.87
determine the exact simple interest of the principal Php continuously. P1000 after 1 year and it is estimated to increase by A. P532000 B. P352000 C. P523000 D. P325000
5000.00 for 8%. C. P3,888.87 D. P4,888.87 10% each year for the subsequent 7 years. Find the 43. Compute for the number of blocks that an ice plant
A. 8.22% B. 7.95% C. 8.33% D. 7.23%
A. Php 201.49 C. Php 124.22 23. A man owes P12,000 today and agrees to discharge present worth of the maintenance cost if the rate of must be able to sell per month to break even based on
17. Tsupul borrows P10,000 at an interest rate of 8%
B. Php 721.21 D. Php 219.89 the debt by equal payments at the beginning of each 3 interest is 15% compounded annually. the following data:
compounded annually and wishes to repay the loan
Tsupul borrowed Php 2000 from a bank and promised to over a 4 year period with annual payments such that the months for 8 years, where these payments include all A. P5985.14 B. P9585.14 C. P5958.14 D. P9558.14 Cost of electricity per block: P 20.00
pay after 1 year. The bank deducted the interest of Php second is P500 greater than the first payment, the third interest at 8% payable quarterly. Find the quarterly 33. What do you call the amount of property in which a Tax to be paid per block: P 2.00
80.00 in advance. payment. willing buyer will pay to a willing seller for the property Real Estate Tax: P 3500.00/mo
payment is P1000 greater than the second payment and
5. What is the interest rate? A. P501.30 B. P105.30 C. P301.30 D. P103.30 when neither one is under the compulsion to buy nor Salaries and Wages: P 25,000/mo
the fourth payment is P2000 greater than the third
A. 4% B. 2% C. 4.2% D. 7% 24. A man will deposit P200 with a savings and loan sell? Others: P 12,000/mo
payment. The amount of first payments is:
association at the beginning of 3 months for 9 years. If A. Far value C. Market value Selling Price of ice: P 55.00/block
6. What is the rate of discount? A. P1854 B. P1574 C. P1474 D. P1754
A. 4% B. 2% C. 4.2% D. 7% the association pays interest at the rate of B. Book value D. Goodwill value A. 1228 B. 2921 C. 1412 D. 1129
18. A sum of P1000 is invested now and left for eight
5.5%quarterly, find the sum to his credit just after the 34. What is a market situation whereby there is only 44. A manufacturer produces a certain item at a labor
Tsupul borrows Php 8000.00 from a bank that has an years at which time the principal is withdrawn. The
last deposit. one buyer of an item for which there is no goods cost of P115.00 each, material cost of P76.00 each and
interest rate of 2% compounded quarterly. interest that has accrued is left for another eight years.
A. P3639 B. P6393 C. P9363 D. P3936 substitute? variable cost of P2.30 each. If the item has a unit price of
7. How much is the money after 8 years? If the effective annual interest rate is 5%, what will be
A. Php 9384.34 C. Php 8523.66 the withdrawal amount at the end of the 16th year? 25. A wealthy man deposited a certain amount of A. Monopsony B. Oligopoly P600.00, how many number of units must be
B. Php 9348.34 D. Php 8325.66 A. P706 B. P500 C. P774 D. P799 money in a bank at a rate of 12% compounded annually C. Monopoly D. Oligopsony manufactured each month for the manufacturer to break
to be able to pay the following scholarship awards; 35. What is the type of annuity where the payments are even if the monthly overhead cost is P428,000?
8. How much is the money after 8 quarters? 19. An employee obtained a loan of P10,000 at the rate
P4000 per year for the first 5 years, P6000 made at the start of its period, beginning from the first A. 1053 B. 1052 C. 1501 D. 1500
A. Php 9384.34 C. Php 8523.66 of 6% compounded annually to repair a house. How
per year on the next 5 years and P9000 per year on the period?
B. Php 9348.34 D. Php 8325.66 much must he pay monthly to amortize the loan within a
years thereafter. Find the amount of money deposited A. Deferred annuity C. Annuity due
A businessman borrows money from a bank and period of ten years?
by the man. B. Ordinary annuity D. Perpetuity
promised to pay Php 5000.00 after 12 months. How A. P210.22 B. P110.22 C. P310.22 D. P410.22
A. P30839.78 C. P50839.78
much money did the he borrow if: 20. A man inherited a regular endowment of P100,000 B. P40839.78 D. P60839.78 36. It is defined as the future value minus the present
9. Money is worth 8% compounded monthly. every end of 3 months for 10 years. However, he may value on a negotiable paper Critical Thinking Exam
26. Find the present value, in peso, of a perpetuity of A. Discount B. Rate of return
A. Php 6414.81 C. Php 4616.81 choose to get a single lump sum payment at the end of
P15,000 payable semi-annually if money is worth 8% ABCD ABC D
B. Php 1985.57 D. Php 1895.57 4 years. How much is this lump sum if the cost of money compounded quarterly. C. Capital D. Interest
1 8
10. Money is worth 8% monthly. is 14% compounded quarterly? 37. _______ is the amount of company’s profits that
A. P317,287 B. P371,287 C. P287,371 D. P278,371 2 9
A. Php 6414.81 C. Php 4616.81 A. P3,702,939.73 B. P7,302,939.73 the board of directors of the corporation decides to
C. P3, 939,702.73 D. P9, 339,702.73 27. A man deposits P500 each year into his savings distribute to ordinary shareholders 3 10
B. Php 1985.57 D. Php 1895.57
account that pays 5% nominal interest compounded A. Par value B. Return 4 11
11. How long (in years) will it take for an investment to 21. A parent wishes to develop a fund for a newborn continuously. How much will be the worth of the account C. Share of stock
child’s college education. The fund is to pay P50000 on D. Dividend 5 12
fivefold its amount if money is worth 14% compounded at the end of 5 years?
semi-annually? the 18th, 19th, 20th, and 21st birthdays of the child. The A. P2679.84 B. P7629.84 C. P2769.84 D. P7269.84 38. It is defined as the sum of the first cost and the 6 13
A. 11 B. 12 C. 13 D. 14 fund will be built up by the deposit of fixed sum on the present costs of perpetual replacement, operation and 7 14
child’s first to seventeenth birthdays. Find the fixed sum 28. Ryan invest P5,000 at the end of each year in an maintenance.
What is the nominal rate of 4% compounded if money worth 4% per annum. account which gives a nominal annual interest of 7.5%, A. Bond C. Depreciation
quarterly if compounded: compounded continuously. Determine the total worth of B. Capitalized cost D. Collateral