Top 350+ Solved Information systems and engineering economics MCQ Questions Answer

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Q. Given: F = $100,000, N = 8 years, and i = 7% Find: A

a. 9999

b. 9746.78

  • b. 9746.78
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Q. Suppose that you invest $1 for 1 year at 18% compounded monthly. How much interest would you earn?

a. 19.56 % compounded annually

b. 18.56 % compounded annually

  • a. 19.56 % compounded annually
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Q. Given: F = $5,000, N = 5 years, and i = 7% , Find: A

a. 9999

b. 9746.78

c. 9700

d. 869.7

  • d. 869.7
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Q. Effective Interest Rate is Actual interest earned or paid in a year or some other time period

a. true

b. false

  • a. true
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Q. Suppose that you invest $1 for 1 year at 18% compounded monthly. How much interest would you earn?

a. 19.56 % compounded annually

b. 18% compounded monthly

c. 1.5% per month for 12 months

d. all true

  • d. all true
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Q. Nominal Interest Rate is Interest rate quoted based on an annual period

a. true

b. false

  • a. true
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Q. The annual equivalent worth (AE) criterion provides a basis for measuring investment worth by determining equal payments on an annual basis.

a. true

b. false

  • a. true
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Q. When only costs are involved, the AE method is sometimes called the annual equivalent cost method.

a. true

b. false

  • a. true
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Q. In AE analysis revenues must cover two kinds of costs:– Operating costs and Capital recovery costs

a. true

b. false

  • a. true
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Q. Operating costs are incurred by the operation of physical plants or equipment needed to provide service

a. true

b. false

  • a. true
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Q. Capital recovery costs are incurred by purchasing assets to be used in production and service.

a. true

b. false

  • a. true
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Q. _______________ are incurred by purchasing assets to be used in production and service.

a. operating costs

b. capital recovery costs

  • b. capital recovery costs
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Q. ____________ are incurred by the operation of physical plants or equipment needed to provide service

a. operating costs

b. capital recovery costs

  • a. operating costs
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Q. Consider a machine that costs $20,000 and has a five-year useful life.At the end of the five years, it can be sold for $4,000 after all tax adjustments have been factored in. If the firm could earn an after-tax revenue of $4,400 per year with this machine, should it be purchased at an interest rate of 10%? (All benefits and costs associated with the machine are accounted for in these figures.)

a. -220.76

b. -200

  • a. -220.76
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Q. Inflation is a loss in the purchasing power of money over time.

a. true

b. false

  • a. true
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