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Free download in PDF Engineering Economics Objective Type Questions and Answers for competitive exams. These short objective type questions with answers are very important for competitive exams. These short solved questions or quizzes are provided by Gkseries.
(21)
A leading shoe manufacturer produces a pair of Lebron James signature shoes at a labor cost of P 900.00 a pair and a material cost of P 800.00 a pair. The fixed charges on the business are P 5,000,000 a month and the variable costs are P 400.00 a pair. Royalty to Lebron James is P 1,000 per pair of shoes 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?
[A]
2.590
[B]
2,632
[C]
2,712
[D]
2,890
(22)
A telephone switchboard 100 pair cable can be made up with either enameled wire or tinned wire. There will be 400 soldered connections. The cost of soldering a connection on the enameled wire will be P 1.65 on the tinned wire, it will be P 1.15. A 100- pair cable made up with enameled wire cost P 0.55 per linear foot and those made up of tinned wire cost P 0.75 per linear foot. Determine the length of cable run in feet so that the cost of each installation would be the same.
[A]
1,000 feet
[B]
1,040 feet
[C]
1,100 feet
[D]
1,120 feet
(23)
A manufacturing firm maintains one product assembly line to produce signal generators. Weekly demand for the generators is 35 units. The line operates for 7 hours per day, 5 days per week. What is the maximum production time per unit in hours required of the line to meet the demand?
[A]
1.0 hour per unit
[B]
1.2 hours per unit
[C]
1.4 hours per unit
[D]
1.6 hours per unit
Answer: 1.0 hour per unit
(24)
A manufacturer produces certain items at a labor 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 price of P 600, how many units must be manufactured each month for the manufacturer to break even if the monthly overhead is P428,000
[A]
1,033
[B]
1,037
[C]
1,043
[D]
1,053
(25)
The Saudi Arabian Oil Refinery developed an oil well which is estimated to contain 5,000,000 barrels of oil at an initial cost of $ 50,000,000. What is the depletion charge during the year where it produces half million barrels of oil? Use Unit or Factor method in computing depletion.
[A]
$ 5,000,000.00
[B]
$ 5,010,000.00
[C]
$ 5,025,000.00
[D]
$ 5,050,000.00
(26)
Shell Philippines, a multinational company, has a total gross income for a particular year of P 50,000,000. The taxable income after taking all deductions except for depletion is P 18,500,000. What is the allowable depletion allowance for that particular year? Take percentage of gross income for oil as 22%.
[A]
P 9,358.41
[B]
P 9,228.45
[C]
P 9,250.00
[D]
P 9,308.45
(27)
An asset is purchased for P 9,000.00. Its estimated economic life is 10 years after which it will be sold for P 1,000.00. Find the depreciation in the first three years using sum-of-years digit method
[A]
P 3,279.27
[B]
P 3,927.27
[C]
P 3,729.27
[D]
P 3,792.72
(28)
ABC Corporation makes it a policy that for any new equipment purchased, the annual depreciation cost should not exceed 20% of the first cost at any time with no salvage value. Determine the length of service life necessary if the depreciation used is the SYD method.
[A]
7 eyars
[B]
8 years
[C]
9 years
[D]
10 years
(29)
A machine costs of P 8,000 and an estimated life of 10 years with a salvage value of P 500. What is its book value after 8 years using straight line method?
[A]
P 2,000.00
[B]
P 2,100.00
[C]
P 2,200.00
[D]
P 2,300.00
(30)
A VOM has a selling price of P 400. If its selling price is expected to decline at a rate of 10% per annum due to obsolescence, what will be its selling price after 5 years?
[A]
P 222.67
[B]
P 212.90
[C]
P 236.20
[D]
P 231.56
31
A P 1, 000, 6% bond pays dividend semiannually and will be redeemed at 110% on June 21, 204. It is bought on June 21, 2001 to yield 4% interest. Find the price of the bond.
[A]
P 1,122.70
[B]
P 1,144.81
[C]
P 1,133.78
[D]
P 1,155.06
32
A P 1,000,000 issue of 3%, 15-year bond was sold at 95%. What is the rate of interest of this investment?
[A]
3.0%
[B]
3.4%
[C]
3.7%
[D]
4.0%
33
Miss Calledo deposited P 1,000, P 1,500 and P 2,000 at the end of the 2nd year, 3rd year and 4th year, respectively in a savings account which earned 10% per annum. How much is in the account at the end of the 4th year?
[A]
P 4,880.00
[B]
P 4,820.00
[C]
P 4,860.00
[D]
P 4,840.00
34
A young engineer borrowed P 10,000 at 12% interest and paid P 2,000 per annum for the last 4 years. What does he have to pay at the end of the fifth year in order to pay off his loan?
[A]
P 6,999.39
[B]
P 6,292.93
[C]
P 6,222.39
[D]
P 6,922.93
35
A person buys a piece of lot for P 100,000 downpayment and 10 deferred semi-annual payments of P 8,000 each, starting three years from now. What is the present value of the investment if the rate of interest is 12% compounded semi-annually?
[A]
P 142,999.08
[B]
P 143,104.89
[C]
P 142,189.67
[D]
P 143,999.08
36
A man loans P 187,400 from a bank with interest at 5% compounded annually. He agrees to pay his obligations by paying 8 equal annual payments, the first being due at the end of 10 years. Find the annual payments.
[A]
P 43,600.10
[B]
P 43,489.47
[C]
P 43,263.91
[D]
P 43,763.20
37
What is the present worth of a year annuity paying P 3,000.00 at the end of each year, with interest at 8% compounded annually?
[A]
P 7,654.04
[B]
P 7,731.29
[C]
P 7,420.89
[D]
P 7,590.12
38
A factory operator bought a diesel generator set for P 10,000.00 and agreed to pay the dealer uniform sum at the end of each year for 5 years at 8% interest compounded annually, that the final payment will cancel the debt for principal and interest. What is the annual payment?
[A]
P 2,500.57
[B]
P 2,544.45
[C]
P 2,540.56
[D]
P 2,504.57
39
What annuity is required over 12 years to equate with a future amount of P 20,000? Assume i= 6% annually.
[A]
P 1,290.34
[B]
P 1,185.54
[C]
P 1,107.34
[D]
P 1,205.74
40
What is the present worth of a P500 annuity starting at the end of the third year and continuing to the end of the fourth year, if the annual interest rate is 10 %?
[A]
P 727.17
[B]
P 717.17
[C]
P 714.71
[D]
P 731.17
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