Information Systems And Engineering Economics Set 15
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This set of Information systems and engineering economics Multiple Choice Questions & Answers (MCQs) focuses on Information Systems And Engineering Economics Set 15
Q1 | Marginal revenue must exceed marginal cost, in order to carry out a profitable increase of operations
- TRUE
- FALSE
Q2 | A plan for receipts or disbursements (An) that yields a particular cash flow pattern over a specified length of time is called monthly equal payment
- TRUE
- FALSE
Q3 | At 8% interest, what is the equivalent worth of $2,042 after 5 years from now?
- 5000
- 4000
- 2000
- 3000
Q4 | If you had $2,000 now and invested it at 10%, how much would it be worth in 8 years?
- 4200
- 4287
- 5000
Q5 | Money has a time value because its purchasing power changes over time (inflation).
- TRUE
- FALSE
Q6 | Interest is the cost of moneyas a cost to the borrower and an earning to the lender
- TRUE
- FALSE
Q7 | Cash Flow is the movement of money (in or out) of a project
- TRUE
- FALSE
Q8 | the practice of charging an interest rate to an initial sum and to any previously accumulated interest that has not been withdrawn.
- compound interest
- simple interest
Q9 | Given P = $1,000 , i = 8% and N = 3 years calculate future value using Compound interest
- 1200
- 1259.71
Q10 | Calculate future value on the principal amount of Rs. 2000 at the interest rate of 6% for the period of 5 years using simple interest
- 1200
- 1259.71
- 2600
- none
Q11 | If you deposit $100 now (n = 0) and $200 two years from now (n = 2) in a savings account that pays 10% interest, how much would you have at the end of year 10?
- 900
- 688
- 500
- none
Q12 | Economic equivalence refers to the fact that a cash flow-whether a single payment or a series of payments-can be converted to an equivalent cash flow at any point in time.
- TRUE
- FALSE
Q13 | If you deposit P dollars today for N periods at i, you will have F dollars at the end of period N.
- TRUE
- FALSE
Q14 | You want to set aside a lump sum amount today in a savings account that earns 7% annual interest to meet a future expense in the amount of $10,000 to be incurred in 6 years. How much do you need to deposit today?
- 5000
- 6663
- 8000
Q15 | A fund accumulated by periodic deposits and reserved exclusively for a specific purpose, such as retirement of a debt
- sinking fund
- principal
- interest
Q16 | A fund created by making periodic deposits (usually equal) at compound interest in order to accumulate a given sum at a given future time for some specific purpose is sinking fund
- TRUE
- FALSE
Q17 | the practice of charging an interest rate only to an initial sum (principal amount) is _______
- compound interest
- simple interest
Q18 | Given: F = $100,000, N = 8 years, and i = 7% Find: A
- 9999
- 9746.78
- 9700
Q19 | Suppose that you invest $1 for 1 year at 18% compounded monthly. How much interest would you earn?
- 19.56 % compounded annually
- 18.56 % compounded annually
- 20.56 % compounded annually
Q20 | Given: F = $5,000, N = 5 years, and i = 7% , Find: A
- 9999
- 9746.78
- 9700
- 869.7
Q21 | Effective Interest Rate is Actual interest earned or paid in a year or some other time period
- TRUE
- FALSE
Q22 | Suppose that you invest $1 for 1 year at 18% compounded monthly. How much interest would you earn?
- 19.56 % compounded annually
- 18% compounded monthly
- 1.5% per month for 12 months
- all true
Q23 | Nominal Interest Rate is Interest rate quoted based on an annual period
- TRUE
- FALSE
Q24 | The annual equivalent worth (AE) criterion provides a basis for measuring investment worth by determining equal payments on an annual basis.
- TRUE
- FALSE
Q25 | When only costs are involved, the AE method is sometimes called the annual equivalent cost method.
- TRUE
- FALSE