Information Systems And Engineering Economics Set 25 MCQs

Q1 | 34. Rate of depreciation chargeable on temporary wooden structure for the assessment year 2019- 20 is - A. 40% B. 10% C. 100% D. 50%.

a. 40%

b. 10%

c. 100%

d.50%

Q2 | 47. DS acquired a building for Rs. ` 15 lakh in June, 2016 in addition to cost of land beneath the buildingof ` 3 lakh. It was used for personal purposes until he commenced business in June, 2018 and since thenit was used for business purposes. The amount of depreciation eligible in his case for the assessment year 2019-20 would be -

a. rs.` 1,50,000

b. rs.` 75,000

c. rs.` 37,500

d. rs.` 1,21,500

Q3 | 51. XYZ Ltd is engaged in production of textile articles. Opening WDV of the block of assets was Rs.` 15, 00,000. During the year, plant was acquired under this block on 15th June 2018 amounting to Rs.` 10, 00,000. One of the asset falling within the block was sold for Rs. ` 5, 50,000 on 14-01- 2019. Rate of depreciation of the block is 15%.Calculate the total amount of depreciation including additional depreciation available during the previous year for the block. C

a. rs.` 2,92,500

b. rs.`4,92,500

c. rs.` 3,92,500 88

d. rs.` 3,52,500

Q4 | What is the rate of depreciation charged on computer software?

a. 40%

b. 15%

c. 60%

d. 100%

Q5 | Which of the following statements is correct?

the reason why the u.s. congress allows business to use macrs depreciation as opposed to conventional methods is to reduce the business tax burden over the project life.

under the declining balance depreciation system, it is always desirable to switch to straight line depreciation.

when determining the cost basis for anasset’s depreciation, you must include all the costs that were incurred to keep the asset in operable condition.

the main reason why a typical ?rm may use a straight line depreciation method in reporting an income to outside investors (as opposed to any other accelerated tax depreciation methods) is to abide by the accounting principle— that is to report the truecost of doing business

Q6 | A company purchased an industrial fork-lift for $75,000 in year 0. The company expects to use it for the next 7 years after which it plans to sell it for $10,000. The estimated gross income and expenses excluding depreciation for the ?rst year are given below. The fork-lift will be depreciated according to a 5-year MACRS.:Determine the average tax rate applicable in the ?rst year of operation, using the current corporate tax rate schedule.

18.75%

17.31%

25%

15%

Q7 | What effect would have on the break-even point and expected pro?t if there is an increase in ?xed cost?

(decrease, decrease)

(increase, decrease)

(increase, increase)

(decrease, decrease)

Q8 | What effect would have on the break-even point and expected pro?t if there is an increase in labor cost?

(decrease, decrease)

(increase, decrease)

(increase, increase)

Q9 | What effect would have on the break-even point and expected pro?t if there is an increase in unit price?

(increase, decrease)

(decrease, decrease)

(increase, increase)

(decrease, increase)

Q10 | What effect would have on the break-even point and expected pro?t if there is an increase in ?nancing cost?

(decrease, decrease)

(increase, decrease)

(increase, increase)

(decrease, increase)

Q11 | What effect would have on the break-even point and expected pro?t if there is an increase in sales expense?

(increase, increase)

(decrease, decrease)

(increase, decrease)

(decrease, decrease)

Q12 | Which of the following statements is most correct?

investment in working capital must be depreciated over the project life according to a straight-line method.

if a project incurs an operating loss (a negative taxable income) during a typical tax year, the ?rm pays no income taxes during that year.

whenever a project requires an investment in working capital, the pro?tability of theproject will be affected negatively.

all of the above