Engineering Economy PDF

ENGINEERING ECONOMY
Choose the letter of the best answer in each questions.Avoid ERASURES.

1. Fi st Be h a k Pu lishi gs g oss a gi is % of sales. The ope ati g osts of the pu lishi g
are estimated at 15% of sales. If the company is within the 40% tax bracket, determine the
percent of sales is their profit after taxes?
A. 21 %
B. 20 %
C. 19 %
D. 18 %
2. A farmer selling eggs at 50 pesos a dozen gains 20%. If he sells the eggs at the same price after
the costs of the eggs rises by 12.5%, how much will be his new gain in percent?
A. 6.89 %
B. 6.65 %
C. 6.58 %
D. 6.12 %
3. A feasibility study shows that a fixed capital investment of P10,000,000 is required for a
proposed construction firm and an estimated working capital of P2,000,000. Annual
depreciation is estimated to be10% of the fixed capital investment. Determine the rate of return
on the total investment if the annual profit is P3,500,000.
A. 28.33 %
B. 29.17 %
C. 30.12 %
D. 30.78 %
4. The monthly demand for ice cans being manufactured by Mr. Camus is 3200 pieces. With a
manual operated guillotine, the unit cutting cost is P25.00. An electrically operated hydraulic
guillotine was offered to Mr. Camus at a price of P275,000.00 and which cuts by 30% the unit
cutting cost. Disregarding the cost of money, how many months will Mr. Camus be able to
recover the cost of the machine if he decides to buy now?
A. 10 months
B. 11 months
C. 12 months
D. 13 months
5. Engr. Trinidad loans from a loan firm an amount of P100,000 with a rate of simple interest of
20% but the interest was deducted from the loan at the time the money was borrowed. If at the
end of one year, she has to pay the full amount of P100,000, what is the actual rate of interest?
A. 23.5 %
B. 24.7 %
C. 25.0 %
D. 25.8 %
6. A loan of P5,000 is made for a period of 15 months, at a simple interest rate of 15%, what future
amount is due at the end of the loan period?
A. 5,937.50
B. 5,873.20
C. 5,712.40
D. 5,690.12
7. Mr. Bacani borrowed money from the bank. He received from the bank P1,842 and promised to
repay P2,000 at the end of 10 months. Determine the rate of simple interest.
A. 12.19 %
B. 12.03 %
C. 11.54 %
D. 10.29 %
8. A college freshman borrowed P2,000 from a bank for his tuition fee and promised to pay the
amount for one year. He received only the amount of P1,920 after the bank collected the
advance interest of P80.00. What was the rate of discount?
A. 3.67 %
B. 4.00 %
C. 4.15 %
D. 4.25 %
9. It is the practice of almost all banks in the Philippines that when they grant a loan, the interest
for one year is automatically deducted from the principal amount upon release of money to a
borrower. Let us therefore assume that you applied for a loan with a bank and the P80,000 was
approved at an interest rate of 14% of which P11,200 was deducted and you were given a check
of P68,800. Since you have to pay the amount of P80,000 one year after, what then will be the
effective interest rate?
A. 16.02 %
B. 16.28 %
C. 16.32 %
. 16.47 %
10. A man invested P110,000 for 31 days. The net interest after deducting 20% withholding tax is
P890.36. Find the rate of return annually.
A. 11.50 %
B. 11.75 %
C. 11.95 %
D. 12.32 %
11. A investor wishes to earn 7% on his capital after payment of taxes. If the income from an
available investment will be taxed at an average rate of 42%, what minimum rate of return,
before payment of taxes, must the investment offer to be justified?
A. 12.07 %
B. 12.34 %
C. 12.67 %
D. 12.87 %
12. Mr. Jun Ramos was granted a loan of P20,000 by his employer Excel First Review and Training
Center, Inc. with an interest of 6% for 180 days on the principal collected in advance. The
corporation would accept a promissory note for P20,000 non-interest for 180 days. If discounted
at once, find the proceeds of the note.
A. P18,000
B. P18,900
C. P19,000
D. P19,100
13. Miss Evilla borrowed money from a bank. She receives from the bank P1,340.00 and promised
to pay P1,500.00 at the end of 9 months. Determine the corresponding discount rate or often
efe ed to as the a ke s dis ou t .
A. 13.15 %
B. 13.32 %
C. 13.46 %
D. 13.73 %
14. The exact simple interest of P5,000 invested from June 21, 1995 to December 25, 1995 is P100.
What is the rate of interest?
A. 3.90 %
B. 3.92 %
C. 3.95 %
D. 3.98 %
15. What is the ordinary interest on P1,500.50 for 182 days at 5.2%?
A. P39.01
B. P39.82
C. P39.45
D. P39.99
16. A loan for P50,000 is to be paid in 3 years at the amount of P65,000. What is the effective rate of
money?
A. 9.01 %
B. 9.14 %
C. 9.31 %
D. 9.41 %
17. What is the effective rate corresponding to 18% compounded daily? Take 1 year is equal to 360
days.
A. 19.61 %
B. 19.44 %
C. 19.31 %
D. 19.72 %
18. What rate of interest compounded annually is the same as the rate of interest of 8%
compounded quarterly?
A. 8.07 %
B. 8.12 %
C. 8.16 %
D. 8.24 %
19. Which of these gives the lowest effective rate of interest?
A. 12.35 % compounded annually
B. 11.90 % compounded annually
C. 12.20 % compounded annually
D. 11.60 % compounded annually
20. An amount of P1,000 becomes P1,608.44 after 4 years compounded bimonthly. Find the
nominal interest.
A. 11.89 %
B. 12.00 %
C. 12.08 %
D. 12.32 %
21. How long will it take money to double itself if invested at 5% compounded annually?
A. 13.7 years
B. 14.7 years
C. 14.2 years
D. 15.3 years
22. By the condition of a will, the sum of P20,000 is left to a girl to be held in trust fund by her
guardian until it amounts to P50,000. When will the girl receive the money if fund invested at
8% compounded quarterly?
A. 11.23 years
B. 11.46 years
C. 11.57 years
D. 11.87 years
23. A sum of P1,000 is invested now and left for eight years, at which time the principal is
withdrawn. The interest has accrued is left for another eight years. If the effective annual
interest rate is 5%, what will be the withdrawal amount at the end of the 16th year?
A. P693.12
B. P700.12
C. P702.15
D. P705.42
24. Mandarin Bank advertises 9.5% account that yields 9.84% annually. Find how often the interest
is compounded.
A. Monthly
B. Bimonthly
C. Quarterly
D. Annually
25. A student plans to deposit P1,500 in the bank now and another P3,000 for the next 2 years. If he
plans to withdraw P5,000 three years from after his last deposit for the purpose of buying shoes,
what will be the amount of money left in the bank after one year of his withdrawal? Effective
annual interest rate is 10%.
A. P1,549.64
B. P1,459.64
C. P1,345.98
D. P1,945.64
26. You borrow P3,500.00 for one year from a friend at an interest rate of 1.5% per month instead
of taking a loan from a bank at a rate of 18% per year. How much lesser you will pay by
borrowing the money from the bank?
A. P 62.44
B. P44.55
C. P54.66
D. P37.56
27. What is the present worth of two P 100 payments at the end of the third year and fourth year?
The annual interest rate is 8%.
A. P 150.56
B. P 152.88
C. P 153.89
D. P 151.09
28. A firm borrows P2,000 for 6 years at 8%. At the end of 6 years, it renews the loan for the
amount due plus P2,000 more for 2 years at 8%. What is the lump sum due?
A. P 3,260.34
B. P 3,280.34
C. P 3,270.34
D. P 3,250.34
29. In year zero, you invest P 10,000.00 in a 15% security for 5 years. During that time, the average
annual inflation is 6%. How much in terms of year zero pesos will be in the account at maturity?
A. P 15,030.03
B. P 20,113.57
C. P 18,289.05
D. P 16,892.34
30. The institute of Electronics and Communications Engineers of the Philippines (IECEP) is planning
to put up its own building. Two proposals being considered are:
A. The construction of the building now to cost P 400,000
B. The construction of a smaller building now to cost P300,000 and at the end of 5 years, an
extension to be added to cost P 200,000.
By how much is proposal B more economical than proposal A if interest rate is 20% and
depreciation to be neglected?
A. P 19,122.15
B. P 19,423.69
C. P 19,518.03
D. P 19,624.49
31. 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
32. 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
33. 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
34. 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
35. 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
36. 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
37. 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
38. 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
39. 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%
40. 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
41. 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
42. 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
43. 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
44. 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
45. 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
46. 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
47. 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
48. 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
49. 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
50. 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
51. What is defines as the analysis and evaluation of the monetary consequences by using the
theories and principles of economics to engineering applications, designs and projects?
A. Economic Analysis
B. Engineering cost analysis
C. Engineering economy
D. Design cost analysis
52. What is o side ed as the sta da d u it hi h fo
supply?
A. Monetary unit
B. Currency
C. Foreign exchange
D. Cash or check
s the asis of a ou t s do esti
o e
53. What is defined as any tangible economic product that contributes directly or indirectly to the
satisfaction of human want?
A. Services
B. Goods
C. Commodities
D. Goods or commodities
54. What is defined as any tangible economic activity that contributes directly or indirectly to the
satisfaction of human want?
A. Services
B. Goods
C. Commodities
D. Goods or commodities
55. What are the two classifications of goods and services?
A. Local and imported
B. Raw and finished
C. Consumer and producer
D. Ready-made and made-to-order
56. What refers to the goods and services that are required to support human life, needs and
activities?
A. Producer products
B. Consumer products
C. Luxury
D. Necessity
57. What refers to the goods and services that are desired by human and will be acquired only after
all the needs have been satisfied?
A. Producer products
B. Consumer products
C. Luxury
D. Necessity
58. What refers to the exchange mechanism that brings together the sellers and the buyers of a
product, factor of production or financial security?
A. Mall
B. Market
C. Store
D. Office
59. What is considered as the basic consuming or demanding unit of a commodity?
A. Seller
B. Manufacturer
C. Producer
D. Buyer or consumer
60. What is defined as an entity which makes product, good or services available to buyer or
consumer in exchange of monetary consideration?
A. Seller
B. Manufacturer
C. Producer
D. Buyer or consumer
61. What is a market situation whereby there is only one buyer of an item for which there is no
goods substitute?
A. Monopsony
B. Monopoly
C. Oligopoly
D. Oligopsony
62. What market situation exists where there are few sellers and few buyers?
A. Oligopoly
B. Oligopsony
C. Bilateral oligopoly
D. Bilateral Oligopsony
63. What market situation exists where there is only one buyer and only one seller?
A. Monopsony
B. Monopoly
C. Bilateral monopsony
D. Bilateral monopoly
64. What is the market situation exist when there are many buyers and many sellers?
A. Perfect competition
B. Oligopoly
C. Oligopsony
D. Monopoly
65. If there is only one seller and many buyers, the market situation is ________ .
A. Duopsony
B. Oligopoly
C. Oligopsony
D. Monopoly
66. If there are many sellers and few buyers, the market situation is _________ .
A. Duopsony
B. Oligopoly
C. Oligopsony
D. Monopoly
67. Oligopoly exists when there is/are:
A. Few sellers and few buyers
B. Few sellers and many buyers
C. Many sellers and few buyers
D. One seller and few buyers
68. Duopsony is a market situation where there is/are:
69. Duopoly is a market situation where there is/are:
70. What is another te fo pe fe t o petitio ?
A. Atomistic competition
B. No-limit competition
C. Free-for-all competition
D. Heterogeneous market
71. What refers to the market situation in which any given product is supplied by a very large
number of vendors and there is no restriction against additional vendors from entering the
market?
B. Oligopoly
C. Oligopsony
D. Monopoly
72. Aside from many sellers and many buyers, which one is a characteristic of perfect competition?
A. Homogeneous product
B. Free market entry and exit
C. Perfect information and absence of all economic friction
D. All of the above
73. What is the opposite of perfect competition?
A. Monopsony
B. Oligopoly
C. Oligopsony
D. Monopoly
74. Perfect monopoly exists only if:
A. the single vendor can prevent the entry of all other vendors in the market
B. the single vendor gets the absolute franchise of the product
C. the single vendor is the only one who has the permit to sell
D. the single vendor is the only one who has the knowledge of the product
75. A ______ is a market situation where economies of scale are so significant that cost are only
minimized when the entire output of an industry is supplied by a single producer so that the
supply costs are lower under monopoly that under perfect competition.
A. Perfect monopoly
B. Bilateral monopoly
C. Natural monopoly
D. Ordinary monopoly
76. Whe o e of the fa to s of p odu tio is fi ed i ua tit o is diffi ult to i ease, i easi g
the other factors of production will esult i a less tha p opo tio ate i ease i output . This
statement is known as the:
A. Law of diminishing return
B. Law of supply
C. Law of demand
D. Law of supply and demand
77. What refers to the need, want or desire for a product backed by the money to purchase it?
A. Supply
B. Demand
C. Product
D. Good
78. What refers to the amount of a product made available for sale?
A. Supply
B. Demand
C. Product
D. Good
79. U de o ditio s of pe fe t o petitio , the p i e at hi h a gi e p odu t ill e supplied

a d pu hased is the p i e that ill esult i the suppl a d the de a d ei g e ual. This
statement is known as the:
B. Law of supply
C. Law of demand
80. What do you call any particular raw material or primary product such as cloth, wool, flour,
coffee, etc.?
A. Utility
B. Necessity
C. Commodity
D. Stock
81. What is defined as the interest on a load or principal that is based only on the original amount of
the loan or principal?
A. Effective rate of interest
B. Nominal rate of interest
C. Compound interest
D. Simple interest
82. Under ordinary simple interest, how many days in one year?
A. 300
B. 360
C. 365
D. 366
83. O e a ke s ear is equivalent to ______ days.
A. 300
B. 360
C. 365
D. 366
84. What refers to the cumulative effect of elapsed time on the money value of an event, based on
the earning power of equivalent invested funds capital should or will earn?
A. Present worth factor
B. Interest rate
C. Time value of money
D. Yield
85. The difference between the present and future worth of money at some time in the future is
called ______.
A. Discount
B. Deduction
C. Inflation
D. Depletion
86. What refers to the present worth of the probable future net earnings?
A. Total fair value
B. Total market value
C. Going concern value
D. Earning value
87. What refers to the amount of money paid for the use of borrowed capital?
A. Interest
B. Rate of interest
C. Simple interest
D. Principal
88. What refers to the ratio of the interest payment to the principal for a given unit of time and
usually expressed as a percentage of the principal?
A. Return of investment
B. Interest rate
C. Yield
D. Rate of return
89. What is defined as the investment of loan or principal which is based not only on the original
amount of the loan or principal but the amount of loaned or principal plus the previous
accumulated interest?
A. Effective rate of interest
B. Nominal rate of interest
C. Compound interest
D. Simple interest
90. What refers to the cost of borrowing money or the amount earned by a unit principal per unit
time?
A. Yield rate
B. Rate of return
C. Rate of interest
D. Economic return
91. A uniform series of payment occurring at equal interval of time is called ______.
A. Annuity
B. Amortization
C. Depreciation
D. Bond
92. What is the term for an annuity with a fixed time span?
A. Ordinary annuity
B. Perpetuity
C. Annuity certain
D. Annuity due
93. What is the type of annuity where the payments are made at the end of each period starting
from the first period?
A. Ordinary annuity
B. Perpetuity
C. Annuity due
D. Deferred annuity
94. What is the type of annuity where the payments are made at the beginning of the each period
starting from the first period?
A. Ordinary annuity
B. Perpetuity
C. Annuity due
D. Deferred annuity
95. What is the type of annuity that does not have a fixed time span but continues indefinitely or
forever?
A. Ordinary annuity
B. Perpetuity
C. Annuity due
D. Deferred annuity
96. What is the type of annuity where the first payment does not begin until some later date in the
cash flow?
A. Ordinary annuity
B. Perpetuity
C. Annuity due
D. Deferred annuity
97. Which is NOT an essential element of an ordinary annuity?
A. The amounts of all payments are equal.
B. The payments are made at equal interval of time.
C. The first payment is made at the beginning of the first period.
D. Compound interest is paid on all amounts in the annuity.
98. What is defined as a financial security note issued by business or corporation and by the
government as a means of borrowing long-term fund?
A. T-bills
B. Securities
C. Bond
D. Bank notes
99. What refers to the present worth of all the amount the bondholder will receive through his
possession of the bond?
A. Par value of bond
B. Face value of bond
C. Redeemed value of bond
D. Value of bond
100.
What is defined as the certificate of indebtedness of corporation usually for a period not
less than 10 years and guaranteed by a mortgage on certain assets of a corporation?
A. Bond
B. T-bills
C. Stock
D. Promissory note
101.
What refers to a document that shows proof of legal ownership of a financial security?
A. Bond
B. Bank note
C. Coupon
D. Check
102.
What type of bond is issued jointly by two or more corporations?
A. Mortgage bond
B. Joint bond
C. Tie-up bond
D. Trust bond
103.
What type of bond whose guaranty is in lien on railroad equipment, such as freight and
passenger cars, locomotives, etc.?
A. Railroad bond
B. Equipment obligation bond
C. Equipment bond
D. Equipment trust bond
104.
A type of bond to which are attached coupons indicating the interest due and the date
when such interest is to be paid is called ______.
A. Registered bond
B. Coupon bond
C. Mortgage bond
D. Collateral trust bond
105.
What bond whose security is a mortgage on certain specified assets of the corporation?
A. Registered bond
B. Collateral trust bond
C. Mortgage bond
D. Debenture bond
106.
A bond without any security behind them except a promise to pay by the issuing
corporation is called ______.
A. Joint bond
B. Debenture bond
C. Trust bond
D. Common bond
107.
A type of bond where the corporation pledges securities which it owns such as the stock
or bonds of one of its subsidiaries.
A. Mortgage bond
B. Joint bond
C. Security bond
D. Collateral trust bond
108.
What t pe of o d he e the o po atio s o e
is paid periodically to the owners with their asking for it?
A. Preferred bond
B. Registered bond
C. Incorporators bond
D. Callable bond
a e a e e o ded a d the i te est
109.
What type of bond which can be redeemed before maturity date?
A. Preferred bond
B. Registered bond
C. Incorporators bond
D. Callable bond
110.
What is the feature of some bonds whereby the issuer can redeem it before it matures?
A. Return clause
B. Callability
C. Recall clause
D. Call class
111.
The price at which the callable bond will be redeemed from the bondholder is called
______.
A. Par value
B. Call value
C. Face value
D. Redemption value
112.
What is defined as the reduction or fall of the value of an asset due to constant use and
passage of time?
A. Depletion
B. Inflation
C. Depreciation
D. Deflation
113.
In what method of computing depreciation where it assumes that the loss in value is
directly proportional to the age of the equipment or asset?
A. Straight line method
B. Sinking fund method
C. Sum-of-year digit method
D. Declining balance method
114.
In what method of computing depreciation where it assumes that a sinking fund is
established in which funds will accumulate for replacement purposes?
115.
In what method of computing depreciation where it assumes that the annual cost of
depreciation is a fixed percentage of the book value at the beginning of the year?
116.
In SYD method of computing depreciation, which of the following is the formula in
fi di g the su of ea s digits?
A.
B.
C.
D.
117.
The declining balance method is also known as ______.
A. Double percentage method
B. Constant percentage method
C. Modified sinking fund method
D. Modified SYD method
118.
What type of depreciation is due to the reduction in the demand for the function that
the equipment or asset was designed to render?
A. Functional depreciation
B. Design depreciation
C. Physical depreciation
D. Demand depreciation
119.
What type of depreciation is due to the reduction of the physical ability of an equipment
or asset to produce results?
A. Functional depreciation
B. Design depreciation
C. Physical depreciation
D. Demand depreciation
120.
The functional depreciation is sometimes called ______.
A. Demand depreciation
B. Adolescence
C. Life depreciation
D. Failure depreciation
121.
What is defined as the reduction of the value of certain natural resources such as mines,
oil, timber, quarries, etc. due to the gradual extraction of its contents?
A. Depletion
B. Inflation
C. Depreciation
D. Deflation
122.
What are the common methods of computing depletion charge?
A. Rational method and irrational method
B. Conservative method and conventional method
C. Unit method and percentage method
D. Discrete method and depletion allowance method
123.
Under the depletion allowance method in computing depreciation, the depletion charge
is equal to either ______ whichever is smaller.
A. Fixed percentage of gross income or the net taxable income
B. Fixed percentage of gross income or 50% of the net taxable income
C. 50% of the fixed percentage of gross income or 50% of the net taxable income
D. 50% of the fixed percentage of gross income or the net taxable income
124.
The depletion allowance method of computing depletion is commonly known as
______.
A. Unit method
B. Percentage method
C. Factor method
D. Sinking fund method
125.
What is a othe te
A. Initial cost method
B. Percentage method
C. Factor method
fo u it
ethod fo o puti g depletio ?
126.
Using factor method, the depletion at any given year is equal to:
A. Initial cost of property times number of unit sold during the year divided
by the total units in property
B. Initial cost of property divided by the number of units sold during the year
C. Initial cost of property times number of units sold during the year
D. Initial cost of property divided by the total units in property
127.
What do you call the after-tax present worth of all depreciation effects over the
depreciation period of the asset?
A. Asset recovery
B. Depreciation recovery
C. Period recovery
D. After-tax recovery
128.
A mathematical expression also known as the present value of annuity of one is called
______.
A. Load factor
B. Demand factor
C. Sinking fund factor
D. Present worth factor
129.
The amount of property in which a willing buyer to a willing seller for the property when
neither one is under the compulsion to buy nor to sell is called ______.
A. Fair value
B. Market value
C. Good will value
D. Book value
130.
Salvage value is sometimes known as ______.
A. Scrap value
B. Going value
C. Junk value
D. Second-hand value
131.
What refers to the value of an asset which a disinterested third party, different from the
buyer and seller, will determine in order to establish a price acceptable to both parties?
A. Book value
B. Market value
C. Fair value
D. Franchise value
132.
What refers to the value of an intangible item which arises from the exclusive right of a
company to provide a specified product and service in a certain region of the country?
A. Company value
B. Going value
C. Goodwill value
D. Franchise value
133.
The first cost to be incurred if the piece of equipment now in place had been bought for
a second hand dealer or some other business is called ______.
A. Material cost
B. Fixed cost
C. First cost
D. In-place value
134.
In computing depreciation of an equipment, which of the following represents the first
cost?
A. The original purchase price and freight charges
B. Installation expenses
C. Initial taxes and permit fees
D. All of the above
135.
The process of determining the value or worth of a physical property for specific reason
is called ______.
A. Investment
B. Valuation
C. Economy
D. Depletion
136.
The unrecovered depreciation which results due to poor estimates as to the life of the
equipment is called ______.
A. Sunk cost
B. Economic life
C. In-place value
D. Annuity
137.
What refers to the present worth of cost associated with an asset for an infinite period
of time?
A. Annual cost
B. Increment cost
C. Capitalized cost
D. Operating cost
138.
Capitalized cost of a project is also known as ______.
A. Infinite cost
B. Life cycle cost
C. Life cost
D. Project cost
139.
What is normally used to compare alternatives that accomplish the same purpose but
have unequal lives?
A. Capitalized cost method
B. Present worth method
C. Annual cost method
D. MARR
140.
What method is often used in municipal project evaluations where benefits and costs
accrue to different segments of the community?
A. Annual cost method
B. Benefit-cost ratio
C. Rate of return method
D. EUAC
141.
What refers to an imaginary cost representing what will not be received if a particular
strategy is rejected?
A. Opportunity cost
B. Ghost cost
C. Horizon cost
D. Null cost
142.
What is the main reason why the sinking fund method of computing depreciation is
seldom used in the industry?
A. Unstable economy
B. Rate of interest cannot be exactly determined
C. The initial deprecation is high
D. The initial depreciation is low
143.
What is the factor name of the formula (1+i)^-n?
A. Uniform gradient future worth
B. Capital recovery
C. Single payment present worth
D. Single payment compound amount
144.
What is the factor name of the formula [i(1+i)^n]/[((1+i)^n)-1]?
A. Uniform series sinking fund
B. Capital recovery
C. Single payment present worth
D. Uniform gradient future worth
145.
A form of business organization in which a person conducts his business alone and
entirely for his own profit, being solely responsible for all its activities and liabilities.
A. Sole proprietorship
B. Entrepreneurship
C. Partnership
D. Corporation
146.
Is an artificial being created by operation of law, having the right of succession and the
process, attributes and properties expressly authorized by the law or incident to its existence.
A. Corporation
B. Property
C. Partnership
D. Organization
147.
What is the simplest form of business organization?
B. Partnership
C. Enterprise
D. Corporation
148.
Double taxation is a disadvantage of which business organization?
B. Partnership
C. Corporation
D. Enterprise
149.
In case of bankruptcy of a partnership,
A. The partners are not liable for the liabilities of the partnership
B. The partnership assets (excluding the partners personal assets) only
will be used to pay the liabilities
C. The partners personal assets are attached to the debt of the partnership
D. The partners nay sell stock to generate additional capital
150.
Which is true about partnership?
A. It has a perpetual life.
B. It will be dissolved if one of the partners ceases to be connected with the partnership.
C. It can be handed down from one generation of partners to another.
D. Its capitalization must be equal for each partner.
151.
Which is true about corporation?
A. It is worse type of business organization.
B. The minimum number of incorporators to start a corporation is three.
C. Its life is dependent on the lives of the incorporators.
D. The stock holders of the corporation are only liable to the extent of their investments.
152.
Aggregation of individuals formed for the purpose of conducting a business and
recognized by law as a fictitious person is called ______.
A. Partnership
B. Investors
C. Corporation
D. Stockholders
153.
An association of two or more persons for the purpose of engaging into a business for
profit is called ______.
A. Entrepreneurship
B. Partnership
C. Proprietorship
D. Corporation
154.
What represents the ownership of stockholders who have a residual claim on the assets
of the corporation after all other claims have been settled?
A. Authorized capital stock
B. Preferred stock
C. Incorporator stock
D. Common stock
155.
What stock represents ownership and enjoys certain preferences than ordinary stock?
A. Authorized stock
B. Preferred stock
C. I o po ato s sto k
D. Presidential stock
156.
The a ou t of o pa s p ofit that the oa d of di e to s of the o po atio de ides
to distribute to ordinary shareholders is called ______.
A. Dividend
B. Return
C. Share of stock
D. Equity
157.
What efe s to the esidual alue of a o pa s assets afte all outside lia ilities
(shareholders excluded) have been allowed for?
A. Dividend
B. Equity
C. Return
D. Par value
158.
What refers to the claim of anyone to ownership?
A. Proprietorship
B. Assets
C. Equity
D. Liability
159.
Cash money and credit necessary to establish and operate an enterprise are generally
called ______.
A. Capital
B. Funds
C. Assets
D. Liabilities
160.
What represents the share of participation in business organizations?
A. Franchise
B. Partnership
C. Stock
D. Corporation
161.
The profit derived from a project or business enterprise without consideration of
obligations to financial contributors and claims of others based on profit is known as ______.
A. Yield
B. Economic return
C. Earning value
D. Gain
162.
______ is the element of value which a business has earned through the favorable
consideration and patronage of its costumers arising from its well known and well conducted
policies and operations.
A. Status company
B. Big income
C. Known owners
D. Goodwill
163.
Which of the following is an example of intangible asset?
A. Cash
B. Investment in subsidiary companies
C. Furnitures
D. Patents
164.
Lands, buildings, plants and machineries are example of what type of asset?
A. Current asset
B. Trade investment asset
C. Fixed asset
D. Intangible asset
165.
What refers to the interest rate at which the present work of the cash flow on a project
is zero of the interest earned by an investment?
A. Economic return
B. Yield
C. Rate of return
D. Return of investment
166.
What is a othe te
A. Fixed assets
B. Non-liquid assets
C. Liquid assets
D. Cash
fo
u e t assets ?
167.
What is an accounting term that represents an inventory account adjustment?
A. Cost of goods sold
B. Cost accounting
C. Standard cost
D. Overhead cost
168.
What is the change in cost per unit variable change called?
A. Variable cost
B. Incremental cost
C. Fixed cost
D. Supplemental cost
169.
What is used to record historical financial transactions?
A. Bookkeeping system
B. Ledger system
C. Balance check
D. General journal system
170.
What is a secondary book of accounts, the information of which is obtained from the
journal is called?
A. Balanced sheet
B. Ledger
C. Worksheet
D. Trial balance
171.
The original record of a business transaction is recorded in this book.
A. Work book
B. Journal
C. Ledger
D. Account book
172.
All the proceeds which are received by the business as a result of the sale of goods is
called ______.
A. Net income
B. Gross income
C. Net revenue
D. Total sales
173.
All are classified under direct labor expenses EXCEPT one. Which one?
A. Inspection cost
B. Testing cost
C. Assembly cost
D. Supervision cost
174.
What is a measure of the average speed with which accounts receivable are collected?
A. Current ratio
B. Quick ratio
C. Acid test ratio
D. Receivable turnover
175.
The ratio of the net income before taxes to net sales is called ______.
A. Current ratio
B. Inventory turnover
C. Profit margin ratio
D. Price-earnings ratio
176.
What do you call a one-time credit against taxes?
A. Due credit
B. Tax credit
C. Credible credit
D. Revenue credit
177.
What is used when a quick estimate of the doubling time for the invested money is
needed?
A. Rule of 48
B. Rule of 36
C. Rule of 24
D. Rule of 72
178.
What is the increase in the money value of a capital asset is called?
A. Profit
B. Capital gain
C. Capital expenditure
D. Capital stock
179.
What is the reduction in the money value of capital asset is called?
A. Capital expenditure
B. Capital loss
C. Loss
D. Deficit
180.
What refers to the negotiable claim issued by a bank in lien of a term deposit?
A. Time deposit
B. Bond
C. Capital gain certificate
D. Certificate of deposit
181.
What denotes in the fall in the exchange rate of one currency in terms of the others?
This term is usually applies to the floating exchange rate.
A. Currency appreciation
B. Currency depreciation
C. Currency devaluation
D. Currency float
182.
The deli e ate lo e i g of the p i e of a atio s u e
i te s of the a epted
standard (Gold, American dollar or the British pound) is known as ______.
A. Currency appreciation
B. Currency depreciation
C. Currency devaluation
D. Currency float
183.
What refers to the saving which takes place because goods are not available for
consumption rather than consumer really want to save?
A. Compulsory saving
B. Consumer saving
C. Forced saving
D. All of the above
184.
The flow back of profit plus depreciation form a given project is called ______.
A. Capital recovery
B. Cash flow
C. Economic return
D. Earning value
185.
As applied to capitalized asset, the distribution of the initial cost by a periodic changes
to operation as in depreciation or the reduction of a debt by either periodic or irregular
prearranged programs is called ______.
A. Annuity
B. Amortization
C. Capital recovery
D. Annuity factor
186.
Capitalized cost of any structure or property is computed by which formula?
A. First cost + interest of first cost
B. Annual cost interest of first cost
C. First cost + cost of perpetual maintenance
D. First cost + salvage value
187.
The true value of interest rate computed by equations for compound interest for a 1
year period is known as ______.
A. Expected return
B. Nominal interest
C. Effective interest
D. Economic return
188.
Return on investment ratio is the ratio of the:
A. Net i o e to o e s e uit
B. Market price per share to earnings per share
C. Cost of goods sold to average cost of inventory at hand
D. Net credit sales to average net receivable
189.
Gross margin is the ratio of the gross profit to ______.
A. Net sale
B. O e s e uit
C. Inventory turnover
D. Quick assets
190.
What is anothe te
A. Current ratio
B. Quick ratio
D. Price-earnings ratio
fo a id-test atio ?
191.
What is a government bond which has an indefinite life rather than a specific maturity?
A. Coupon
B. T-bill
C. Debenture
D. Consol
192.
A form of business firm which is owned and run by a group of individuals for their
mutual benefit is called ______.
A. Cooperative
B. Corporation
C. Enterprise
D. Partnership
193.
What is a stock of a product which is held by a trade body or government as a means of
regulating the price of that product?
A. Stock pile
B. Hoard stock
C. Buffer stock
D. Withheld stock
194.
The ability to meet debts as they become due is known as ______.
A. Solvency
B. Leverage
C. Insolvency
D. Liquidity
195.
The ability to convert assets to cash quickly is known as ______.
A. Solvency
B. Liquidity
C. Leverage
D. Insolvency
196.
What is the basic accounting equation?
A. Assets = lia ilit + o e s e uit
B. Lia ilit = assets + o e s equity
C. O e s e uit = assets + lia ilit
D. O e s e uit = lia ilit assets
197.
The financial health of the company is measured in terms of:
A. Liquidity
B. Solvency
C. Relative risk
D. All of the above
198.
What is an index of short-term paying ability?
A. Price-earnings ratio
B. Current ratio
D. Gross margin
199.
The common ratio is the ratio of:
A. Net credit sales to average net receivable
B. Current assets to current liabilities
C. Gross profit to net sales
D. Net i o e to o e s equity
200.
What is defined as the current assets minus inventories and prepaid expenses?
A. Profit margin ratio
B. Price-earnings ratio
C. Return of investment ratio
D. Quick ratio
201.
What is the ratio of the quick assets to current liabilities?
D. Quick ratio
202.
What is a measure of the average speed with which accounts receivable are collected?
B. Receivables turnover
D. Average age of receivables
203.
Receivable turnover is the ratio of:
A. Net credit sales to average net receivables
B. Market price per share to earnings per share
C. Cost of goods sold to average cost of inventory on hand
D. Co
o sha eholde s e uit to u e of outstanding shares
204.
What is the atio of the et i o e to o
A. Gross margin
B. Return of investment ratio
C. Book value per share of common stock
D. Inventory turnover
e s e uit ?
205.
What is the ratio of the market price per share to earnings per share called?
A. Gross margin
D. Inventory turnover
206.
What is the profit margin ratio?
A. The ratio of the net income before taxes to net sales
B. The ratio of gross profit to net sales
C. The ratio of o
o sha eholde s e uit to the u e of outsta di g sha es
D. The ratio of cost goods sold to average cost of inventory on hand
207.
What is a gross margin?
A. The ratio of net income before taxes to net sales
C. The atio of o
D. The ratio of cost of goods sold to average cost of inventory on hand
208.
Which of the following is a book value share of common stock?
C. The atio of o
209.
What is an inventory turnover?
C. The atio of o
210.
The average age of receivables is computed using which formula?
A. 365 / receivable turnovers
B. 365 / average net receivable
C. 365 / inventory turnover
D. 365 / average cost of inventory on hand
211.
What is a method of determining when the value of one alternative becomes equal to
the value of another?
A. Specific identification method
B. Average cost method
C. Break-even analysis
D. Incremental value method
212.
The days supply of inventory on hand is calculated using which formula?
A. 365 / receivable turnovers
B. 365 / average net receivable
C. 365 / inventory turnover
D. 365 / average cost of inventory on hand
213.
What is defined as the length of time usually in years, for cumulative net annual profit
to equal the initial investment?
A. Return of investment period
B. Turnover period
C. Break-even period
D. Payback period
214.
What is defined as ratio of its return to its cost?
A. Return of an investment
B. Value of an investment
C. Breakeven point of an investment
D. Term of an investment
215.
Which of the following is an accelerated depreciation method?
A. Straight line method and sinking fund method
B. Straight line method and double declining balance method
C. Double declining balance method and SYD method
D. SYD method and sinking fund method
216.
What is an accelerated depreciation method?
A. It is one that calculates a depreciation amount greater than a straight line amount
B. It is one that calculates a depreciation amount lesser than a straight line amount
C. It is one that calculates a depreciation amount equal to straight line amount
D. It is one that calculates a depreciation not in any way related to straight line amount
217.
What refers to the reduction in the level of a national income and output usually
accompanied by a fall in the general price level?
A. Deflation
B. Inflation
C. Devaluation
D. Depreciation
218.
A formal organization of producers within an industry forming a perfect collusion
purposely formed to increase profit and block new comers form the industry is called ______.
A. Monopoly
B. Cartel
C. Corporation
D. Competitors
219.
The pape u e
supply is called ______.
A. T-bills
B. Bank notes
C. Check
D. Coupon
issued
the e t al a k hi h fo
s pa t of the ou t s
o e
220.
Whe o e of the fa to s of p odu tio is fi ed i ua tit o is diffi ult to i rease,
increasing the other factors of production will result in a less than proportionate increase in
output .
B. Law of supply
C. Law of demand
221.
What is the ratio of the market price per share to the earnings per share?
A. Inventory turnover
B. Price-earnings
D. Profit margin
222.
What is the ratio of the et i o e to o
A. Return on investment
B. Inventory turnover
C. Profit margin
D. Price-earnings
e s e uit ?
223.
What refers to the ration of the net income before taxes to net sales?
A. Receivable turnover
B. Acid test ratio
C. Return on investment
D. Profit margin
224.
What refers to the buying or selling of goods between two or more markers in order to
take profitable advantage of any differences in the prices quoted in these markets?
A. Cartel
B. Arbitrage
C. Black market
D. A priority
225.
The suspension of repayment of debt or interest for a specified period of time is called
______.
A. Moratorium
B. Escrow
C. Numeraire
D. Porcupine
226.
The discount of one unit of principal for one unit of time.
a. Rate discount
b. Nominal discount
c. Actual discount
d. Sales discount
227.
An annuity whereby the payment is postponed for a certain period of time is?
a. Ordinary annuity
b. Suspended annuity
c. Deferred annuity
d. Annuity due
228.
The actual interest earned by a given principal is known as?
a. Compounded interest
b. Nominal interest
c. Simple interest
d. Effective interest
229.
A bond where the security behind it are the equipment of the issuing corporation.
a. Debenture
b. Mortgage
c. Collateral
d. Lien
230.
Characterized by a few supplies of a product/services that the action by one will almost
inevitably result in the similar action by the other.
a. Monopoly
b. Oligopoly
c. Competition
d. Necessity
231.
It is the worth of a property as shown on the accounting records.
a. Resale value
b. Face value
c. Book value
d. Written value
232.
The decrease in the value of a property due to gradual extraction of its contents.
a. Depreciation
b. Depletion
c. Devaluation
d. Deviation
233.
It is usually determined by a disinterested third party to establish a price good enough
to both the seller and the buyer.
a. Fair value
b. Market value
c. Common value
d. Safe value
234.
The exclusive right of a company to provide a specific product or services in a given
region of the country.
a. Outlet
b. Branch
c. Extension
d. Franchise
235.
It is the sum of the first cost and the present worth of all costs or replacement,
operation and maintenance.
a. Total cost
b. Capitalized cost
c. Initial cost
d. Variable cost
236.
A certificate of indebtedness of a corporation usually for a period not less than 10 years
and guaranteed by a mortgage on certain assets of the corporation or its subsidiaries.
a. Collateral
b. Bond
c. Mortgage
d. Contract
237.
What the property is worth to the owner as an operating unit.
a. Utility value
b. Present value
c. Salvage value
d. Resale value
238.
Occurs when a commodity or service is supplied by a number of vendors and there is
nothing to prevent additional vendors entering the market.
a. Free market
b. Perfect competition
c. Open market
d. Law of supply and demand
239.
In making economy studies a minimum required profit on the invested capital is
included as a cost. A method called as __________.
a. Rate of return
b. Annual cost pattern
c. Present worth pattern
d. Capital cost
240.
Annuity is required over 10 years to equate to a future amount of P 15, 000 with i=5%
a. P 1, 192.57
b. P 1, 912.75
c. P 1, 219.60
d. P 1, 921.65
241.
A debt of P 1000 is to be paid off in 5 equal yearly payments, each combining an
amortization installment and interest at 4% on the previously unpaid balance of the debt. What
should be the amount of each payment?
a. P 220.50
b. P 224.62
c. P 242.61
d. P 222.50
242.
P 1000 is deposited in a bank at 7% interest. What is the value of the money after 25
years, assuming that nothing was deposited after the initial deposit?
a. P 5, 247.63
b. P 5, 437.34
c. P 5, 427.43
d. P 5, 720.51
243.
What is the interest due on a P 1500 note for 4 years and 3 month, if it bears 12%
ordinary simple interest?
a. P 756
b. P 765
c. P 675
d. P 576
244.
A P 1000-bond which will mature in 10 years and with a bond rate of 10% payable
annually is to be redeemed at P 1040 at the end of this period. If it is sold now at P 1,120.
Determine the yield at this price.
a. 4.68 %
b. 6.48 %
c. 8.64 %
d. 8.46 %
245.
A company sets aside P 300,000 each year as a fund for expansion. If the fund earns 9%
compounded annually, determine how long will it take before a building costing P 3, 000, 000
can be built?
a. 7.34 years
b. 7.44 years
c. 7.20 years
d. 7.54 years
246.
Which is NOT an essential element of an ordinary annuity?
C. The first payment is made at the beginning of each period.
247.
An amortization of a debt is in a form of a gradient series of P5,000 on the first year,
P4,500 on the second year, P4,000 on the third year, P3,500 on the fourth year. What is the
equivalent uniform periodic payment if interest is 5%?
A. P4,280.47
B. P4,378.17
C. P4,259.68
D. P4,325.12
248.
A method of depreciation whereby the amount to recover is spread uniformly over the
estimated life of the asset in terms of the periods or units of output.\
C. Declining balance method
D. SYD method
249.
Which of the following depreciation methods cannot have a salvage value of zero?
A. Declining balance method
C. Straight line method
D. SYD method
250.
A method of depreciation where a fixed sum of money is regularly deposited at
compound interest in a real or imaginary fund in order to accumulate an amount equal to the
total dep e iatio of a asset at the e d of the assets estimated life.
D. SYD method
251.
A price tag of P1200 is specified if paid within 60 days but offers a 3% discount for cash
in 30 days. Find the rate of interest.
A. 37.11%
B. 40.21%
C. 38.51%
D. 39.31%
252.
It is the practice of almost all bank in the Philippines that when they grant a loan, the
interest for 1 year is automatically deducted from the principal amount upon release of money
to a borrower. Let us therefore assume that you applied for a loan with the bank and the
P80000 was approved at an interest rate of 14% of which P11200 was deducted and you were
given ac check of P68800. Since you have to pay the amount of P80000 one year after, what
then will be the effective interest rate?
A. 16.28%
B. 17.30%
C. 38.51%
D. 39.31%
253.
Mr. J. Dela Cruz borrowed money from the bank. He received from the bank P1,340.00
and promised to pay P1,500.00 at the end of 9 months. Determine the simple interest rate and
the corresponding discount rate o ofte efe ed to as the Ba ke s Dis ou t .
A. 15.92% ; 13.73%
B. 12.95% ; 17.33%
C.18.28% ; 13.12%
D. 19.25% ; 13.33%
254.
A man borrowed from the bank under a promissory note that he signed in the amount
of P25000.00 for a period of 1year. He received only the amount of P21,915.00 after the bank
collected the advance interest and an additional amount of P85.00 for notarial and inspection
fees. What was the rate of interest that the bank collected in advance?
A. 13.64%
B. 16.43%
C.18.37%
D. 10.32%
255.
Karen was granted a loan of P20,000 by her employer CPM Industrial Fabricator and
Construction Corporation with an interest at 6% for 180days on the principal collected in
advance. The corporation would accept a promissory note for P20,000 non-interest for 180days.
If discounted at once, find the proceeds in the note.
A. P18,800
B. P18,000
C. P19,000
D. P18,400
256.
P4000 is borrowed for 75days at 16% per annum simple interest. How much will be due
at the end of 75days?
A. P4186.43
B. P4133.33
C. P5124.54
D. P5625.43
257.
Mr. Bautista made a money market placement of P1,000,000 for 30 days at 7.5% per
year. If withholding tax is 20%, what is the net interest that Mr. Bautista will receive at the end
of the month?
A. P3,000
B. P6,000
C. P4,000
D. P5,000
258.
A bill for motorboat specifies the cost as P1,200 due at the end of 100 days but offers a
4% discount for cash in 30days. What is the highest rate, simple interest at which the buyer can
afford to borrow money in order to take advantage of the discount?
A. 18.4%
B. 20.9%
C. 19.6%
D. 21.4%
259.
In buying a computer disk, the buyer was offered the options of paying P250 cash at the
end of 30days or P270 at the end of 120days. At what rate is the buyer paying simple interest if
he agree to pay at the end of 120days?
A. 32%
B. 28%
C.40%
D. 25%
260.
On March 1, 1996 Mr. Sarmiento obtains a loan of P1500 from Mr. Avila and signs a
note promising to pay the principal and accumulated simple interest at the rate of 5% at the end
of 120days. On May 15, 1996, Mr. Avila discounts the note at the bank whose discount rate is
6%. What does he receive?
A. P2,201.48
B. P1,513.56
C. P1,123.29
D. P938.20
261.
A deposit of P110,000 was made for 31days. The net interest after deducting 20%
withholding tax is P890.36. Find the rate of return annually.
A. 12.25
B. 12.75
C. 11.75
D. 11.95
262.
If you borrowed money from your friend with simple interest of 12%, find the present
worth of P50,000 which is due at the end of 7months.
A. P46,200
B. P46,729
C. P44,893
D. P45,789
263.
A man borrowed P2000 from a bank and promise to pay the amount for 1year. He
received only the amount of P1,920 after the bank collected an advance interest of P80. What
was the rate of discount and the rate of interest that the bank collected in advance?
A. 4% ; 4.17%
B. 4% ; 4.71%
C. 3% ; 3.17%
D. 3% ; 3.71%
264.
An engineer promised to pay P36,000 at the end of 90days. He was offered a 10%
discount if he pays in 30 days. Find the rate of interest.
A. 64.6%
B. 66.6%
C. 65.6%
D. 67.6%
265.
A man is required to pay P200 at the end of 160 days or P190 at the end of 40 days.
Determine the rate of interest.
A. 18.4%
B. 15.8%
C. 19.6%
D. 16.4%
266.
Compute the discount if P2000 is discounted for 6 months at 8% simple interest.
A. P29.67
B. P76.92
C. P67.29
D. P92.76
267.
The amount of P12800 in 4years at 5% compounded quarterly is _____.
A. P14,785.34
B. P16,311.26
C. P15,614.59
D. P15,847.33
268.
A man borrows money from a bank which uses a simple discount rate of 14%. He signs a
promissory note promising to pay P500.00 per month at the end of 4th, 6th, and 7th month
respectively. Determine the amount of money that he received from the bank.
A. P1403.68
B. P1102.37
C. P1340.38
D. P1030.28
269.
A nominal interest of 3% compounded continuously is given on the account. What is the
accumulated amount of P10,000 after 10 years?
A. P13,610.10
B. P13,498.60
C. P13,500.10
D. P13,439.16
270.
BY the condition of a will, the sum of P2000 is left to a girl to be held in trust fund by her
guardian until it amount to P50000.00. When will the girl receive the money of the fund is
invested at 8% compounded quarterly?
A. 7.98 years
B. 11.57 years
C. 10.34 years
D. 10.45 years
271.
A man expects to receive P25,000 in 8 years. How much is that worth now considering
interest at 8% compounded quarterly?
A. P13,859.12
B. P13,675.23
C. P13,958.33
D. P13,265.83
272.
P500,000 was deposited at an interest of 6% compounded quarterly. Compute the
compound interest after 4 years and 9 months.
A. P163,475.37
B. P158,270.37
C. P178,362.37
D. P183,327.37
273.
If the nominal interest rate is 3%, how much is P5000 worth in 10 years in a
continuously compounded account?
A. P5750
B. P7500
C. P6750
D. P6350
274.
P200,000 was deposited for a period of 4 years and 6 months and bears on interest of
P85649.25. What is the rate of interest if it is compounded quarterly?
A. 8%
B. 7%
C. 6%
D. 5%
275.
How many years will P100,000 earn a compound interest of P50,000 if the interest rate
is 9% compounded quarterly?
A. 3.25 years
B. 5.86 years
C. 4.55 years
D. 2.11 years
276.
A certain amount was deposited 5 years and 9 months ago at an interest of 8%
compounded quarterly. If the sum now is P315,379.85, how much was the amount deposited?
A. P200,000
B. P240,000
C. P180,000
D. P260,000
For Problems 277-279:
When compounded Bi-monthly, P15000 becomes P22,318.30 after 5years.
277.
What is the nominal rate of interest?
A. 7%
B. 9%
C. 8%
D. 10%
278.
What is the equivalent rate if it is compounded quarterly?
A. 7.03%
B. 9.03%
C. 8.03%
D. 10.03%
279.
What is the effective rate if it is compounded quarterly?
A. 7.28%
B. 9.28%
C. 8.28%
D. 10.28%
280.
How will it take a money to double itself if invested at 5% compounded annually?
A. 12.2 years
B. 14.2 years
C. 13.2 years
D. 15.2years
281.
Compute the effective annual interest rate which is equivalent to 5% nominal annual
interest compounded continuously.
A. 5.13%
B. 5.26%
C. 4.94%
D. 4.90%
282.
Find the time required for a sum of money to triple itself at 5% per annum compounded
continuously.
A. 21.97 years
B. 18.23 years
C. 25.34 years
D. 23.36 years
283.
A man wishes to have P40,000 in a certain fund at the end of 8 years. How much should
he invest in a fund that will pay 6% compounded continuously?
A. P24,751.34
B. P28,864.36
C. P36,421.44
D. P30,468.42
284.
If the effective annual interest rate is 4%, compute the equivalent nominal annual
interest compounded continuously.
A. 3.92%
B. 3.80%
C. 4.10%
D. 4.09%
285.
What is the nominal rate of interest compounded continuously for 10 years if the
compound amount factor is equal to 1.34986?
A. 3%
B. 5%
C. 4%
D. 6%
286.
American Express Corp. charges 1.5% interest per month, compounded continuously on
the unpaid balance purchases made on this credit card. Compute the effective rate of interest.
A. 19.72%
B. 21.20%
C. 20.25%
D. 19.90%
287.
If the nominal interest is 12% compounded continuously, compute the effective annual
rate if interest.
A. 12.75%
B. 12.40%
C. 11.26%
D. 11.55%
288.
Compute the difference in the future amount of P500 compounded annually at nominal
rate of 5% and if it is compounded continuously for 5 years at the same rate.
A. P3.87
B. P5.48
C. P4.21
D. P6.25
289.
If the effective rate is 24%, what nominal rate of interest is charged for a continuously
compounded loan?
A. 21.51%
B. 23.25%
C. 22.35%
D. 21.90%
290.
What is the nominal rate of interest compounded continuously for 8 years if the present
worth factor is equal to 0.6187835?
A. 4%
B. 6%
C. 5%
D. 7%
291.
What is the difference of the amount 3 years from now for a 10% simple interest and
10% compound interest per year? (P5000 accumulated)
A. P155
B. same
C. P100
D. P50
292.
Find the discount if P2,000 is discounted for 6 months at 8% compounded quarterly.
A. P76.92
B. P77.66
C. P80.00
D. P78.42
293.
If a sum of money triples in a certain period of time at a given rate interest, compute the
value of the single payment present worth factor.
A. 0.333
B. 0.292
C. 3.000
D. 1.962
294.
If the single payment amount factor for a period of 5 years is 1.33822. What is the
nearest value of the interest rate?
A. 8%
B. 5%
D. 7%
D. 6%
295.
If the single payment present worth factor for a period of 8 years is equal to 0.58201,
compute the nearest value of the rate of interest for that period.
A. 6%
B. 5%
C. 7%
D. 8%
296.
If money is worth 8% compounded quarterly, compute the single payment amount
factor for a period of 6 years.
A. 1.60844
B. 1.70241
C. 0.62172
D. 0.53162
297.
A sum of P1,000 is invested now and left for 8 years, at which time the principal is
withdrawn. The interest has an accrued left for another 8 years. If the effective annual interest
is 5%, what will be the withdrawn amount at the end of the 16th year?
A. P507.42
B. P750.42
C. P705.42
D. P425.07
For problems 298 - 300:
Compute the interest for an amount of P200,000 for a period of 8 years.
298.
If it was made at a simple interest rate of 16% .
A. P274,000
B. P256,000
C. P265,000
D. P247,000
299.
If it was made at 16% compounded bi-monthly.
A. P507,267.28
B. P407,283.01
C. P507,365.96
D. P459,923.44
300.
If it was made at 16% compounded continuously.
A. P422,462.64
B. P524,242.46
C. P507,233.24
D. P519,327.95
301.
A. 7%
B. 5%
C. 8%
D. 6%
Find the value of x, (F/P, x, 6) if F/P compounded quarterly is equal to 1.612226.
302.
Find the value of y, (P/F, 6%, y) if P/F compounded bi-monthly is equal to 0.787566.
A. 7 years
B. 5 years
C. 6 years
D. 4 years
303.
Find the rate of interest if compound amount factor compounded bi-monthly for 5
years is equal to 1.487887.
A. 7%
B. 5%
C. 8%
D. 6%
304.
Compute the nominal rate for a period of 6 years for an effective rate of 8.33% if it is
compounded continuously.
A. 7%
B. 5%
C. 8%
D. 6%
305.
Compute the equivalent compound amount factor if it is compounded continuously.
A. 1.61607
B. 1.24532
C. 1.24282
D. 0.24245
306.
Compute the equivalent present worth factor if it is compounded continuously.
A. 1.249347
B. 1.243248
C. 1.214359
D. 0.616783
307.
A man loan P2000 from the bank. How long would it take in years for the amount of the
loan and interest to equal P3280 if it was made at 8% simple interest.
A. 7 years
B. 5 years
C. 8 years
D. 6 years
308.
A man loan P2000 from the bank. How long would it take in years if it was made at 8%
compounded quarterly.
A. 5.25 years
B. 7.25 years
C. 6.25 years
D. 8.25 years
309.
A man loan P2000 from the bank. How long would it take in years if it was made at 8%
compounded continuously.
A. 7.18 years
B. 5.18 years
C. 8.18 years
D. 6.18 years
310.
An amount of P1000 becomes P1608.44 after 4 years compounded bi-monthly. Find the
nominal rate of interest, the effective rate of interest, and the equivalent rate of interest if it is
compounded quarterly.
A. 11% ; 12.623% ; 11.42%
B. 12% ; 11.06% ; 12.724%
C. 12% ; 12.616% ; 12.06%
D. 11% ; 11.664% ; 11.93%
311.
How long would it take your money to double itself if it is invested at 6% simple interest,
compounded semi-quarterly, and compounded continuously?
A. 12.67 yrs ; 11.2 yrs ; 15.05 yrs
B. 18.67 yrs ; 11.6 yrs ; 11.24 yrs
C. 16.67 yrs ; 11.6 yrs ; 11.55 yrs
D. 17.67 yrs ; 10.2 yrs ; 11.45 yrs
For problems 312 - 314:
An amount of P50,000 was invested for 3 years.
312.
Compute its interest at the end of 3 years if it is invested at 10% simple interest.
A. P16,550.00
B. P15,000.00
C. P17,492.94
D. P14,242.15
313.
Compute for its compound interest if it is invested at 10% compounded annually.
A. P16,550.00
B. P15,000.00
C. P17,492.94
D. P14,242.15
314.
Compute its interest if it is invested at 10% compounded continuously.
A. P16,550.00
B. P15,000.00
C. P17,492.94
D. P14,242.15
For Problems 315 - 317:
P200,000 was deposited for a period of 4 yrs. And 6 months and bears on interest of P85,659.25.
315.
What is the nominal rate of interest if it is compounded quarterly?
A. 8.00%
B. 7.00%
C. 8.24%
D. 7.96%
316.
What is the actual rate of interest?
A. 8.00%
B. 7.00%
C. 8.24%
D. 7.96%
317.
What is the equivalent nominal rate if it is compounded semi-quarterly?
A. 8.00%
B. 7.00%
C. 8.24%
D. 7.96%
318.
What is the value of (F/P, 8%, 6) if it is compounded semi-quarterly.
A. 0.524273541
B. 1.487886717
C. 0.787566127
D. 1.612226000
319.
What is the value of (P/F, 6%, 4) if it is compounded bi-monthly.
A. 0.524273541
B. 1.487886717
C. 0.787566127
D. 1.612226000
320.
320.What is the single payment compound amount factor for 8% compounded bimonthly for 5 years.
A. 0.524273541
B. 1.487886717
C. 0.787566127
D. 1.612226000
If money is invested at a nominal rate of interest of 8% for a period of 4 years.
321.
What is the effective rate if it is compounded continuously?
A. 8.33%
B. 9.33%
C. 8.93%
D. 9.93%
322.
What is the value of the compound amount factor if it is compounded continuously?
A. 1.377128
B. 1.424231
C. 0.214212
D. 0.122416
323.
What is the value of the present worth factor if it is compounded continuously?
A. 1. 272441
B. 0.272441
C. 1.726419
D. 0.726149
324.
If the single payment amount factor for a period of 5 years is 1.33822, what is the
nominal rate of interest?
A. 6.00%
B. 7.00%
C. 6.92%
D. 7.92%
325.
What is the effective rate of interest if it is compounded semi-annually of problem no.
324?
A. 5.00%
B. 7.24%
C. 6.92%
D. 6.09%
326.
What is the equivalent nominal rate if it is compounded quarterly of problem no. 324?
A. 6.12%
B. 4.24%
C. 5.43%
D. 5.87%
327.
Money was invested at x% compounded quarterly. If it takes money to quadruple in
17.5 years, find the value of x.
A. 6.23%
B. 8.00%
C. 5.92%
D. 9.78%
328.
What is the actual interest rate of problem no. 327?
A. 7.24%
B. 7.92%
C. 8.24%
D. 8.87%
329.
What is the equivalent rate if problem no. 327 is compounded daily?
A. 7.24%
B. 7.92%
C. 8.24%
D. 8.87%
A businessman loaned P500,000 from a local bank that charges an interest rate of 12%.
330.
How much is he going to pay at the end of 5 years if it was made at 12% simple interest?
A. P800,000.00
B. P911,059.20
C. P823,243.09
D. P907,009.21
331.
How much is he going to pay at the end of 5 years if it was made at 12% compound
semi-quarterly?
A. P800,000.00
B. P911,059.20
C. P823,243.09
D. P907,009.21
332.
How much is he going to pay at the end of 5 years if it was made at 12% compound
continuously?
A. P800,000.00
B. P911,059.20
C. P823,243.09
D. P907,009.21
333.
P60,000 was deposited at 6% compounded quarterly, tax free for 9 years and 3 months.
How much interest was earned at the end of the period?
A. P43,214.24
B. P44,086.60
C. P43.242.24
D. P44,215.60
334.
P100,000 was placed in a time deposit which earned 9% compounded quarterly tax free.
After how many years would it be able to earn a total interest of P50,000?
A. 4.56 years
B. 3.45 years
C. 4.23 years
D. 3.64 years
335.
P200,000 was placed in a time deposit at x% compounded quarterly and was free of
taxes. After exactly 5 years, the total interest earned was P120,000. What is the value of x?
A. 9.5%
B. 6.35%
C. 8.21%
D. 7.12%
336.
Which of these gives the lowest effective rate of interest?
A. 12.35% compounded annually
B. 12.2% compounded quarterly
C. 11.9% compounded semi-annually
D. 11.6% compounded monthly
337.
It takes 20.15 years to quadruple your money if it is invested at x% compounded semiannually. Find the value of x.
A. 8%
B. 7%
C. 6%
D. 5%
338.
It takes 13.87 years to treble the money at the rate of x% compounded quarterly.
Compute the value of x.
A. 5%
B. 7%
C. 6%
D. 8%
339.
Money was invested at x% compounded quarterly. If it takes the money into quadruple
in 17.5 years, find the value of x.
A. 8%
B. 7%
C. 6%
D. 5%
340.
Fifteen years ago P1,000.00 was deposited in a bank account, and today it is worth
P2.370.00. The bank pays interest semi-annually. What was the interest rate paid on this
account?
A. 4.9%
B. 5.0%
C. 5.8%
D. 3.8%
341.
You borrow P3,500.00 for one year from a friend at an interest rate of 1.5% per month
instead of taking a loan from a bank at a rate of 18% per year. Compare how much money you
will save or lose on the transaction.
A. pay P155 more if you borrowed from the bank
B. save P55 by borrowing from your friend
C. pay P85 more if you borrowed from the bank
D. save P95 by borrowing from your friend
342.
Find the present worth of a future payment of P1000,000 to be made in 10 years with
an interest of 12% compounded quarterly.
A. P30,444.44
B. P30,655.68
C. P33,000.00
D. P30,546.01
343.
An initial savings deposit of P80,000 in a certain bank earns 6% interest per annum
compounded monthly. If the earnings from the deposit are subject to a 20% tax, what would the
net value of the deposit be after three quarters?
A. P95,324.95
B. P68743.24
C. P82938.28
D. P56244.75
344.
The effective rate of interest of 14% compounded semi-annually is:
A. 14.49%
B. 14.94%
C. 14.36%
D. 14.88%
345.
The amount of P50,000 was deposited in a bank earning an interest of 7.5% per annum.
Determine the total amount at the end of 5 years, if the principal and interest were not
withdrawn during the period.
A. P71,781.47
B. P70,374.90
C. P72,475.23
D. P78,536.34
346.
What is the effective rate corresponding to 18% compounded daily? Take 1 year is equal
to 360 days.
A. 18.35%
B. 18.10%
C. 19.39%
D. 19.72%
347.
If P1,000 becomes P1,126.49 after 4 years when invested at a certain nominal rate of
interest compounded semi-annually, determine the nominal rate and the corresponding
effective rate.
A. 3.00% and 3.02%
B. 2.30% and 2.76%
C. 4.29% and 4.32%
D. 3.97% and 3.95%
348.
Convert 12% semi-annually to compounded quarterly.
A. 19.23%
B. 14.67%
C. 23.56%
D. 11.83%
349.
What is the corresponding effective interest rate of 18% compounded semi-quarterly?
A. 19.25%
B. 18.46%
C. 19.48%
D. 18.95%
350.
If P5000 shall accumulate for 10 years at 8% compounded quarterly, find the
compounded interest at the end of 10 years.
A. P6,005.30
B. P6,040.20
C. P6,000.00
D. P6,010.20
351.
A couple borrowed P4,000 from a lending company for 6 years at 12%. At the end of 6
years, it renews the loan for the amount due plus P4,000 more for 3 years at 12%. What is the
lump sum due?
A. P14,842.40
B. P12,316.40
C. P16,712.03
D. P15,382.60
352.
How long (in years) will it take the money to quadruple if it earns 7% compounded semiannually?
A. 26.30 years
B. 33.15 years
C. 40.30 years
D. 20.15 years
353.
P200,000 was deposited on Jan. 1,1988 at an interest rate of 24% compounded semiannually. How much would the sum be on Jan. 1, 1993?
A. P421,170
B. P401,170
C. P521,170
D. P621,170
354.
If P500,000 is deposited at a rate of 11.25% compounded monthly, determine the
compounded interest after 7 years and 9 months.
A. P690,849
B. P680,686
C. P670,258
D. P660,592
355.
355P200,000 was deposited at an interest rate of 24% compounded semi-annually.
After how many years will the sum be P621,170?
A. 4 years
B. 5 years
C. 3 years
D. 6 years
356.
A bank is advertising 9.5% accounts that yields 9.84% annually. How often is the interest
compounded?
A. monthly
B. quarterly
C. bi-monthly
D. daily
357.
A marketing company established a program to replace the cars of its sales
representatives at the end of every 5 years. If the present price of the approved type of car is
P520,000.00 with a resale value at the end of 5 years of 60% its present value, how much money
must the company accumulate for 5 years if inflation annually is 10%. Release value will also
appreciate at 10% yearly.
A. P120,289.51
B. P110,297.27
C. P129,382.38
D. P122,265.69
358.
In year zero, you invest P10,000.00 in a 15% security for 5 years. During that time, the
average annual inflation is 6%. How much, in terms of year zero will be in the account
atmaturity?
A. P15,386.00
B. P13,382.00
C. P15,030.00
D. P16,653.00
359.
A machine has been purchased and installed at a total cost of P18,000.00. The machine
will be retired at the end of 5 years, at which time it is expected to have a scrap value of
P2,000.00 based on current prices. The machine will then be replaced with an exact duplicate.
The company plans to establish a reserve fund to accumulate the capital needed to replace the
machine. If an average annual rate of inflation of 3% is anticipated, how much capital must be
accumulated?
A. P15,030.00
B. P12,382.00
C. P18,548.39
D. P15,386.00
360.
If the inflation rate is 6%, cost of money is 10%, what interest rate will take care of
inflation and the cost of money?
A. 16.6%
B. 17.7%
C. 15.5%
D. 14.4%
361.
A man bought a government bond which cost P1000 and will pay P50 interest each year
for 20 years. The bond will mature at the end of 20 years and he will receive the original P1000.
If there is 2% annual inflation during this period, what rate of return will the investor receive
after considering the effect of inflation?
A. 2.94%
B. 4.25%
C. 3.16%
D. 5.16%
362.
The inflated present worth of P2000 in two years is equal to P1471.07. What is the rate
of inflation if the interest rate is equal to 10%?
A. 6%
B. 7%
C. 5%
D. 4%
363.
12% rate of interest can take care of the cost of money and inflation. If the nominal rate
of interest is 6%, what is the rate of inflation?
A. 6.62%
B. 7.67%
C. 5.66%
D. 4.64%
364.
An engineer bought an equipment for P500,000. Other expenses including installations
amounted to P30,000. At the end of its estimated useful life of 10 years, the salvage value will
be 10% of the first cost. Using straight line method of depreciation, what is the book value after
5 years?
A. P291,500
B. P242,241
C. P282,242
D. P214,242
365.
A small machine costing P80,000 has a salvage value of x at the end of its life of 5 years.
The book value at the end of the 4th year is P22,400. What is the value of x using the straight
line method depreciation?
A. P6000
B. P8000
C. P7000
D. P9000
366.
A machine has a salvage value of P12,000 at the end of its useful life of 6 years. The
book value at the end of 5 years is P30,833.33. Using a straight line method of
depreciation,what is the first cost of the machine?
A. P125,500
B. P125,000
C. P135,500
D. P135,000
367.
A manufacturing plant was built at a cost of P5M and is estimated to have a life of 20
years with a salvage value of P1M. A certain equipment worth P570,000 was installed at a cost
of P80,000 is expected to operate economically for 15 years with a salvage value of P50,000.
Determine the book value of the plant and equipment after 10 years, use straight line
depreciation method.
A. P3,250,000
B. P4,250,000
C. P3,750,000
D. P4,500,000
368.
A printing equipment costs P73,500 has a life expectancy of 8 years and has a salvage
value of P3,500 at the end of its life. The book value at the end of x years is equal to P38,500.
Using straight line method of depreciation, solve for the value of x.
A. 5 years
B. 6 years
C. 4 years
D. 3 years
369.
The cost of the printing equipment is P500,000 and the cost of handling and installation
is P30,000. If the book value of the equipment at the end of the 3rd year is P242,000 and the life
of the equipment is assumed to be 5 years, determine the salvage value of this equipment at
the end of 5 years.
A. P50,000
B. P53,000
C. P60,000
D. P64,000
370.
An engineer bought an equipment for P500,000. He spent an additional amount of
P30,000 for installation and other expenses. The salvage value is 10% of the first cost. If the
book value at the end of 5 years will be P291,500 using straight line method of depreciation,
compute the useful life of the equipment in years.
A. 10 years
B. 6 years
C. 8 years
D. 15 years
371.
The cost of equipment is P500,000 and the cost of installation is P30,000. If the salvage
value is 10% of the cost of equipment at the end of 5 years, determine the book value at the end
of the fourth year. Use straight line method.
A. P155,000
B. P146,000
C. P140,000
D. P132,600
For Problems 172-174:
The first cost of a machine is P1,800,000 with a salvage value of P300,000 at the end of its life of
5 years. Determine the total depreciation after 3 years.
372.
Using Straight Line Method
A. P800,000
B. P900,000
C. P600,000
D. P700,000
373.
Using Sum of Years Digit Method
A. P1,150,000
B. P1,300,000
C. P1,200,000
D. P1,350,600
374.
Using Constant Percentage Method
A. P1,355,024.24
B. P1,246,422.53
C. P1,185,769.76
D. P1,432,624.84
375.
An asset is purchased for P9,000.00. Its estimated economic life is 10 years after which it
will be sold for P1,000.00. Find the depreciation in the first three years using straight line
method.
A. P2,500
B. P3,000
C. P2,400
D. P2,000
376.
The purchase of a motor for P6000 and a generator for P4000 will allow the company to
produce its own energy. The configuration can be assembled for P500. The service will operate
for 1600 hours per year for 10 years. The maintenance cost is P300 per year, and cost to operate
is P0.85 per hour for fuel and related cost. Using straight line depreciation, what is the annual
cost for the operation? There is a P400 salvage value for the system at the end of 10 year.
A. P2,710
B. P2,630
C. P2,480
D. P2,670
377.
A machine has an initial cost of P50,00.00 and a salvage value of P10,000.00 after 10
years. What is the straight line method depreciation rate as a percentage of the initial cost?
A. 10%
B. 12%
C. 8%
D. 9%
378.
years. What is the book value after 5 years using straight line method depreciation rate?
A. P35,000
B. P15,500
C. P25,000
D. P30,000
379.
A machine has a first of P80,000 and a salvage of P2,000 at the end of its life of 10 years.
Find the book value at the end of the 6th year using straight line method of depreciation.
A. P33,200
B. P34,300
C. P35,400
D. P32,900
380.
An asset is purchased for P90,000.00. Its estimated life is 10 years after which it will be
sold for P1,000.00. Find the book value during the first year if Sum of the Years Digits(SYD)
depreciation is used.
A. P7,545.45
B. P5,245.92
C. P2,980.24
D. P6,259.98
381.
A telephone company purchased a microwave radio equipment for P6M. Freight and
installation charges amounted to 3% of the purchased price. If the equipment shall be
depreciated over a period of 8 years with a salvage value of 5%, determine the depreciation
charge during the 5th year using the Sum of Year Digit Method.
A. P756,632.78
B. P652,333.33
C. P957,902.56
D. P845, 935.76
382.
A consortium of international communications companies contracted for the purchase
and installation of a fiber optic cable linking two major Asian cities at a total cost of P960M. This
amount includes freight and installation charges at 10% of the above total contract price. If the
cable depreciated over a period of 15 years with zero salvage value, what is thedepreciation
charge during the 8th year using the sum of year digits method?
A. P64 M
B. P80 M
C. P23 M
D. P76 M
383.
A machine cost P7,350 has a life of 8 years and has a salvage value of P350 at the end of
8 years. Determine its book value at the end of 4 years using sum years digit method.
A. P3,476.90
B. P6,543.21
C. P2,294.44
D. P5,455.01
384.
A certain equipment costs P7,000 has an economic life of n years and a salvage value
P350 at the end of n years. If the book value at the end of 4 years is equal to P2197.22, compute
for the economic life of the equipment using the sum of years digit method.
A. 10 years
B. 8 years
C. 16 years
D. 11 years
385.
A company purchased an asset for P10000 and plans to keep it for 20 years. If the
salvage value is zero at the end of the 20th year, what is the depreciation in the third year? Use
sum of years digit method.
A. P1000
B. P938
C. P857
D. P747
386.
An equipment costs P7000 and has a life of 8 years and salvage value of x after 8 years.
If the book value of the equipment at the 4th year is equal to P2197.22, compute the salvage
value x using the sum of years digit method.
A. P594
B. P350
C. P430
D. P290
387.
ABC Corporation makes it policy that for every new equipment purchased, the annual
depreciation should not exceed 20% of the first cost at any time without salvage value.
Determine the length of service if the depreciation used is the SYD Method.
A. 9 years
B. 12 years
C. 10 years
D. 19 years
388.
A machine having a certain first cost has a life of 10 years and a salvage value of 6.633%
of the first cost at the end of 10 years. If it has a book value of P58,914 at the end of the
6thyear, how much is the first cost of the machine if the constant percentage of declining value
is used i the o putatio fo its dep e iatio . Matheso s Method
A. P600,000
B. P100,000
C. P300,000
D. P900,000
389.
A machine costing P720,000 is estimated to have a life of 10 years. If the annual rate of
depreciation is 25%, determine the total depreciation using a constant percentage of the
declining balance method.
A. P679,454.27
B. P532,825.73
C. P432,725.45
D. P764,243.33
390.
An earth moving equipment that cost P90,000 will have an estimated salvage value of
P18,000 at the end of 8 years. Using double-declining balance method, compute the book value
and the total depreciation at the end of the 5th year.
A. P21,357.42 ; P68,642.58
B. P24,362.48 ; P65,637.52
C. P15,830.34 ; P74,169.66
D. P19,442.78 ; P70,557.22
391.
A certain office equipment has a first cost of P20,000 and has a salvage value of P1,000
at the end of 10 years. Determine the depreciation at the end of the 6th year using Sinking fund
method at 3% interest.
A. P10,720
B. P11,680
C. P12,420
D. P9,840
392.
An equipment which cost P200,000 has a useful life of 8 years with a salvage value of
P25,000 at the end of its useful life. If the depreciation at the first year is P21,875, what method
is used in the calculation of depreciation?
A. Straight Line
B. Declining Balance
C. Sinking Fund
D. Sum of Years Digit
393.
An equipment costs P8,000 has an economic life of 8 years and salvage value of P400 at
the end of 8 years. The first year depreciation amounts to P1,688.89. What method is used in
the calculation of the depreciation?
A. Straight Line
C. Sinking Fund
394.
The original cost of a certain machine is P150,000 and has an economic life of 8 years
with a salvage value of P9,000 at that time. If the depreciation of the first year is equal to
P44,475, what method is used in the calculation of the depreciation?
A. Straight Line
C. Sinking Fund
395.
A machine has a first cost of P140,000 and a life of 8 years with a salvage value of
P10,000 at the end of its useful life. If the depreciation at the first year amounts to P35,000,
what method is used in the calculation of depreciation?
A. Double Declining Balance
B. Straight Line
C. Declining Balance
396.
A hydraulic machine cost P180,000 and has a salvage value of P15,000 at the end of its
useful life which is 12 years. If the depreciation at the first year is P9,780.71, what method is
used in computing the depreciation. Assume money is worth 6% annually.
A. Straight Line
C. Sinking Fund
397.
An equipment costs P480,000 and has a salvage value of 10% of its cost at the end of its
economic life of 35,000 operating hours. In the first year, it was used for 4,000 hours. Determine
its book value at the end of the first year.
A. P430,629.00
B. P418,360.00
C. P380,420.00
D. P376,420.00
398.
An equipment costs P480,000 and has a salvage value of 10% of its cost at the end of its
economic life of 36,000 operating hours in a period of 5 years. In the first year of service, it was
used for 12,000 hours. If at the end of the 2nd year it was used for 15,000 hours, find the
depreciation at the second year.
A. P180,000
B. P190,000
C. P160,000
D. P150,000
399.
A certain machine cost P40,000 and has a life of 4 years and a salvage value of P5000.
The production output of this machine in units per year is 1000 units for the first year, 2000
units for the second year, 3000 units for the third year, and 4000 units for the fourth year. If the
units produced are in uniform quality, what is the depreciation charge at the end of the fourth
year.
A. P14,000
B. P15,000
C. P13,000
D. P16,000
400.
A lathe machine costs P300,000 brand new with a salvage value of x pesos. The machine
is expected to last for 28500 hours in a period of 5 years. In the first year of service it was used
for 8000 hours. If the book value at the end of the first year is P220,000, compute for the
salvage value x in pesos.
A. P15,000
B. P12,000
C. P18,000
D. P20,000
401.
It is defined to be the capacity of a commodity to satisfy human want
A. Necessity
B. Utility
C. Luxuries
D. Discount
402.
It is the stock that has prior to dividends. It usually does not bring voting right to the
owners and the dividend is fixed and cannot be higher than the specified amount.
A. Common stock
B. Voting stock
C. Pretend stock
D. Non par value stock
403.
It is an amount which a willing buyer will pay to a willing seller for the property where
each has equal advantage and is under no compulsion to buy or sell.
A. Book value
B. Market value
C. Use value
D. Fair value
404.
____ is the loss of value of the equipment with use over a period of time. It could mean
a difference in value between a new asset and the use asset currently in a service.
A. Loss
B. Depreciation
C. Extracted
D. Gain
405.
An economic condition in which there are so few suppliers of a particular product that
o e supplie s a tio s sig ifi a tl affe t p i es a d suppl .
A. Oligopoly
B. Monopsony
C. Monopoly
D. Perfect competition
406.
A market whereby there is only one buyer of an item for when there are no goods
substitute.
A. Monosony
B. Monopoly
C. Oligopoly
D. Oligopsony
407.
It is the worth of a property as recorded in the book of an enterprise.
A. Salvage value
B. Price
C. Book value
D. Scrap value
408.
Reduction in the level of nation income and output usually accompanied by a fall in the
general price level.
A. Devaluation
B. Deflation
C. Inflation
D. Depreciation
409.
A formal organization of producers within industry forming a perfect collusion purposely
formed to increase profit and block new comers from the industry.
A. Cartel
B. Monopoly
C. Corporation
D. Competitors
410.
A market situation where there is only one seller with many buyer.
A. Monopoly
B. Monophony
C. Oligopoly
411.
A market situation where there is one seller and buyer.
A. Bilateral monopoly
B. Monopoly
C. Oligopoly
D. Bilateral Monopoly
412.
Reduction in the level of national income and output usually accompanied by a fall in
the general price level.
A. Deflation
B. Inflation
C. Devaluation
D. Depreciation
413.
A series of equal payments made at equal interval of time.
A. Annuity
B. Amortization
C. Depreciation
D. Bonds
414.
The money paid for the use of borrowed capital.
A. Interest
B. Amortization
C. Annuity
D. Bonds
415.
The place where buyers and sellers come together.
A. Maker
B. Store
C. Bargain center
D. Port
416.
The value of the stock as stated on the stocks certificate
A. Stock value
B. Par value
C. Interest
D. Maturity value
417.
A market situation in which two competing buyers exert controlling influence over many
sellers.
A. Bilateral monopoly
B. Oligopoly
C. Duopsony
D. Duopoly
418.
A market situation in which two powerful groups or organizations dominate commerce
in one business market or commodity.
A. Oligopoly
B. Duopoly
C. Duopsony
D. Duopoly
419.
The type of annuity where the first payment is made after several periods, after the
beginning of the payment.
A. Perpetuity
B. Ordinary annuity
C. Annuity due
D. Deferred annuity
420.
The condition in which the total income equals the total operating expenses.
A. Tally
B. Par value
C. Check and balance
D. Break even
421.
The amount which has been spent or capital invested which for some reasons cannot be
retrieved.
A. Sunk cost
B. Fixed costs
C. Depletion cost
D. Construction cost
422.
An obligation with no condition attach is called
A. Personal
B. Gratuitous
C. Concealed
D. Private
423.
The sum of all the costs necessary to prepare a construction project for operation.
A. Operation costs
B. Construction cost
C. Depletion cost
D. Production cost
424.
The amount received from the sale of an addition unit of a product.
A. Marginal cost
B. Marginal revenue
C. Extra profit
D. Prime cost
425.
The amount that the property would give if sold for junk.
A. Junk value
B. Salvage value
C. Scrap value
D. Book value
426.
The worth of the property which is equal to the original cost less the amount which has
been charged to depreciation.
A. Scrap value
B. Salvage value
C. Book value
D. Market value
427.
The sum of the direct labor cost incurred in the factory and the direct material cost of all
materials that go into production is called
A. Net cost
B. Maintenance cost
C. Prime cost
D. Operating cost
428.
The difference between the present value and the worth of money at some time in the
future is called
A. Market value
B. Net value
C. Discount
D. Interest
429.
The addition cost of producing one more unit is
A. Prime cost
B. Marginal cost
C. Differential cost
D. Sunk cost
430.
A written contract by a debtor to pay final redemption value on an indicated date or
maturity date and pay a certain sum periodically.
A. Annuity
B. Bond
C. Amortization
D. Collateral
431.
Estimated value of the property at the useful life.
A. Market value
B. Fair value
C. Salvage value
D. Book value
432.
Determination of the actual quantity of the materials on hand as of a given date.
A. Physical inventory
B. Counting principle
C. Stock assessment
D. Periodic material update
433.
This consists of a cash and account receivable during the next period or any other
material which will be sold.
A. Fixed assets
B. Deferred charges
C. Current asset
D. Liability
434.
A wrong act that causes injury to a person or property and for which allows a claim by
the injured party to recover damages.
A. Fraud
B. Tort
C. Libel
D. Scam
435.
A series of uniform payment over an infinite period of time
A. Depletion
B. Capitalized cost
C. Perpetuity
D. Inflation
436.
These are products or services that are required to support human life and activities
that will be purchased in somewhat the same quantity event though the price varies
considerably.
A. Commodities
B. Necessities
C. Demands
D. Luxury
437.
The quantity of a certain commodity that is offered for sale at a certain price at a given
place and time.
A. Utility
B. Supply
C. Stocks
D. Goods
438.
It is sometimes called the second hand value
A. Scrap value
B. Salvage value
C. Book value
D. Par value
439.
Decreases in the value of a physical property due to the passage of time.
A. Deflation
B. Depletion
C. Declination
D. Depreciation
440.
An association of two or more individuals for the purpose of engaging business for
profit.
A. Single proprietorship
B. Party
C. Corporation
D. Partnership
441.
The simplest form of business organization where in the business is own entirely by one
person.
A. Partnership
B. Proprietorship
C. Corporation
D. Joint venture
442.
Parties whose consent or signature in a contract is not considered intelligent.
A. Dummy person
B. Minors
C. Demented persons
D. Convict
443.
It is defined as the capacity of a commodity to satisfy human want.
A. Satisfaction
B. Luxury
C. Necessity
D. Utility
444.
This occurs in a situation where a commodity or service is supplied by a number of
vendors and there is nothing to prevent additional vendors entering the market.
B. Monophony
C. Monopoly
D. Cartel
445.
These are products or services that are desired by human and will be purchased if
money is available after the required necessities have been obtained.
A. Commodities
B. Necessities
C. Luxuries
D. Supplies
446.
Grand total of the assets and operational capability of a corporation.
A. Authorized capital
B. Paid off capital
C. Subscribed capital
D. Investment
447.
It is where the original record of a business transaction is recorded.
A. Ledger
B. Spreadsheet
C. Journal
D. Logbook
448.
The length of time which the property may be operated at a profit.
A. Life span
B. Economic life
C. Operating life
D. Profitable life
449.
The right and privilege granted to an individual or corporation to do business in a certain
region.
A. Permit
B. Royalty
C. License
D. Franchise
450.
The worth of an asset as shown in the accounting records of an enterprise.
A. Fair value
B. Par value
C. Market value
D. Book value
451.
A bookstore purchased a best-selling book at P200.00 per copy. At what price should
this book be sold so that by giving a 20% discount, the profit is 30%.
A. P200.00
B. P300.00
C. P400.00
D. P500.00
452.
A businessman wishes to earn 7% on his capital after payment of taxes. If the income
from an available investment will be taxed at an average of 42%, what minimum rate of return,
before payment of taxes, must the investment offer to be justified?
A. 13.02%
B. 12.07%
C. 10.89%
D. 11.08%
453.
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 hour
B. 1 hour and 10 minutes
C. 1 hour and 15 minutes
D. 1 hour and 30 minutes
454.
F o d Co po atio s g oss a gi is % of sales. Ope ati g e pe ses su h as sales a d
administration are 15% of sales. Froyd Corporation is in 40% tax bracket. What percent of sales
is their profit after taxes?
A. 21%
B. 20%
C. 19%
D. 18%
455.
In determining the cost involved in fabricating sub-assembly B within a company, the
following data have been gathered:
Direct material - P0.30 per unit
Direct labor - P0.50 per unit
Testing set-up - P300.00 per set-up
It is decided to subcontract the manufacturing of assembly B to an outside company. For an
order of 100 units, what is the cost per unit that is acceptable to the company?
A. P3.80
B. P4.00
C. P4.10
D. P4.20
456.
By selling balut at P5 per dozen, a vendor gains 20%. The cost of the eggs rises by 12.5%.
If he sells at the same price as before, find his new gain in %.
A. 6.89%
B. 6.67%
C. 6.58%
D. 6.12%
457.
An equipment installation job in the completion stage can be completed in 50 days of 8
hour/day work, with 50 men working. With the contract expiring in 40 days, the mechanical
engineer contractor decided to add 15 men on the job, overtime not being permitted.
If the liquidated damages is P5,000 per day of delay, and the men are paid P150 per day, how
much money would he save with the additional workers?
A. P43,450
B. P43,750
C. P44,250
D. P44,750
458.
In a certain department store, the monthly salary of a saleslady is partly constant and
partly varies as the value of her sales for the month. When the value of her sales for the month
is P10,000.00, her salary for the month is P900.00. When her monthly sales go up to P12,000.00,
her monthly salary goes up to P1,000.00. What must be the value of her sales so that her salary
for the month will be P2,000.00?
A. P30,000
B. P31,000
C. P32,000
D. P33,000
459.
Jojo bought a second-hand Betamax VCR and then sold it to Rudy at a profit of 40%.
Rudy then sold the VCR to Noel at a profit of 20%. If Noel paid P2,856 more than it costs Jojo,
how much did Jojo pay for the unit?
A. P4,100
B. P3,900
C. P4,000
D. P4,200
460.
The selling price of a TV set is double that of its net cost. If the TV set is sold to a
customer at a profit of 25% of the net cost, how much discount was given to the customer?
A. 37.5%
B. 37.9%
C. 38.2%
D. 38.5%
461.
A Mechanical Engineer who was awarded a P450,000 contract to install the machineries
of an oil mill failed to finish the work on time. As provided for in the contract, he has to pay a
daily penalty equivalent to one fourth of one per cent per day for the first 10 days and 0.5% per
day for the next 10 days and one per cent per day for everyday thereafter. If the total penalty
was P60,750.00, how many days was the completion of the contract delayed?
A. 26 days
B. 27 days
C. 28 days
D. 29 days
462.
The quarrying cost of marble and granite blocks plus delivery cost to the processing
plant each is P2,400.00 per cubic meter. Processing cost of marble into tile is P200.00 per square
meter and that of the granite into tiles also is P600.00 per square meter.
If marble has a net yield of 40 square meters of tile per cubic meter of block and sells P400 per
square meter, and granite gives a net yield of 50 square meters of tiles per cubic meter of block and sells
at P1000 per square meter. Considering all other costs to be the same, the granite is more profitable
than the marble by how much?
A. P12,000 per cubic meter
B. P13,000 per cubic meter
C. P14,000 per cubic meter
D. P15,000 per cubic meter
463.
A man would like to invest P50,000 in government bonds and stocks that will give an
overall annual return of about 5%. The money to be invested in government bonds will give an
annual return of 4.5% and the stocks of about 6%. The investments are in units of P100.00 each.
If he desires to keep his stock investment to minimum in order to reduce his risk, determine
how many stocks should be purchased.
A. 165
B. 166
C. 167
D. 168
464.
A 220 V 2 hp motor has an efficiency of 80%. If power costs P3.00 per kw-hr for the first
50 kw-hr, 2.90 per kw-hr for the second 50 kw-hr, P2.80 for the third kw-hr and so on until a
minimum of P2.50 per kw-hr is reached. How much does it cost to run this motor continuously
for 7 days?
A. P800
B. P820
C. P840
D. P860
465.
An 8-meter concrete road pavement 500 meters long is desired to be constructed over a
well-compacted gravel road, together with the necessary concrete curbs and gutters on both
sides. In order to put the subgrade on an even level grade, a 500 cubic meters of sand filling is
necessary, over which the 10 inch concrete pavement will be placed?
Assume the following data:
A. Sand fill, including rolling and watering = P100 per cubic meter
B. Concrete pavement, 10 in thick (labor and materials) including curing = P220 per sq. Meter
C. Curbs and gutters = P12 per linear meter
How much will the project cost allowing 15% for contingency?
A. P1,207,000
B. P1,207,500
C. P1,208,000
D. P1,208,500
466.
An electric utility purchases 2,300,000 kw-hr per month of electric energy from National
Power Corporation at P2.00 per kw-hr and sells all this to consumers after deducting distribution
losses of 20%. At what average rate per kw-hr should this energy be sold to break even if the
following are other monthly expenses in its operation:
Taxes
2.5 % of gross revenue
Salaries
P750,000
Depreciation
P2,250,000
Interest
P700,000
Maintenance
P300,000
Miscellaneous
P200,000
A. P4.90
B. P5.20
C. P5.90
D. P6.30
467.
An engineer bidding on the asphalting of 7 km stretch of road is confronted with a
problem of choosing between two possible sites on which to set-up the asphalt-mixing machine.
Site A
Site B
Average hauling distance
2.5 km
2.75 km
Monthly rental
P35,000
P6,500
Installing and dismantling of machine
P20,000
P10,000
At Site A, it would be necessary to hire 2 flagmen at P150 per working day. The job can be
completed in 32 weeks working 6 days a week. The project requires 16,670 cubic meter of asphalt mix
per kilometre of road. If the asphalt mix is to be hauled by a contractor at P42 per cubic meter per km of
haul. How much is site B more expensive than site A?
A. P949,645
B. P962,101
C. P956,807
D. P974,090
468.
A fixed capital investment of P10,000,000 is required for a proposed manufacturing
plant and an estimated working capital of P2,000,000. Annual depreciation is estimated to be
10% of the fixed capital investment. Determine the rate of return on the total investment if the
annual profit is P2,500,000.
A. 28.33%
B. 29.34%
C. 30.12%
D. 30.78%
469.
A call to bid was advertised in the Philippine Daily Inquirer for the construction of a
transmission line from a mini-hydroelectric power plant to the substation which is 5.035
kilometers away. The tanalized timber electrical posts must be placed at an interval of 50 m. The
electrical posts must be 30 feet long, 8 inches in diameter at the tip and 12 inches in diameter at
the butt. The power house is 15 m from the first electric post and the substation is 20 m from
the last electric post. Compute the estimated cost for the project using the following data:
Cost of one tanalized timber post 30 feet long is P5,000 including delivery to the site. Labourer
at P180 per day and 5 laborers can dig and erect 3 posts per day. Electrician at P250 per day and 4
electricians can strung wires complete 150 meters per day. Electric wire cost P4.00 per meter. Use only
5 laborers and 4 electricians for the project and is supervised by a foreman which is paid at P400 per
day. Contingency is 10% and profit is 25%.
A. P745,890.23
B. P817,692.00
C. P789,120.80
D. P829,592.50
470.
Upon the retirement after 44 years in government service, Mrs. Salud Araoarao was
able to get a retirement lump sum of P2,300,000. As a hedge against inflation, she decided to
use a part of it invested in real state at Pagadian City and the remainder were invested as
follows:
A. 30% in T-bills earning 12% interest
B. 35% in money market placement earning 14%
C. 35% in blue chip stock earning 13%
If her annual earnings from the T-bills, money market and stock is P50,000, How much did she
invests in real estate?
A. P2,091,639.12
B. P1,916,858.24
C. P1,856,120.53
D. P1,790,274.78
471.
The monthly demand for ice cans being manufactured by Mr. Alarde is 3200 pieces.
With a manual operated guillotine, the unit cuffing cost is P25.00. An electrically operated
hydraulic guillotine was offered to Mr. Alarde at a price of P275,000.00 and which cuts by 30%
the unit cuffing cost. Disregarding the cost of money, how many months will Mr. Alarde be able
to recover the cost of the machine if he decides to buy now?
A. 10 months
B. 11 months
C. 12 months
D. 13 months
472. In a new gold mining area in Southern Leyte the ore contains on the average of ten ounces
of gold per ton. Different methods of processing are tabulated as follows:
Processing Method
Cost per ton
% Recovery
P5,500
90
P2,500
80
P400
70
If gold can be sold at P4,000 per ounce, which method of processing yield the biggest return?
A. PRocessing method A
B. Processing method B
C. Processing method C
D. Either of the processing methods B or C
472.
JRT Motors Inc. has been shipping its Suzuki engines in containers to avoid the necessary
crating of the engines. JRT Motors Inc. will pay freight on container load of 40 tons, regardless of
whether or not the container is completely filled with engines. Record shows that due to engine
size, JRT Motors Inc. has shipped only 30 tons per container. Freight of container cost P3.00 per
kilograms.
If the engines are crated so that they can be shipped at the rate of P3.50 per hundred kilograms
with the freight bill computed only on the actual weight shipped. The cost of crating would be P50 per
engine and would increase the shipping weight from 1500 kg to 1520 kg per engine. How much more
economical shipping the engine in crates than in containers?
A. P670 per engine
B. P630 per engine
C. P650 per engine
D. P610 per engine
473.
A paint manufacturing company uses a sand mill for fine grinding of paint with an
output of 100 liters per hour using glass beads as grinding media. Media load in the mill is 25 kg
costing P200.00 per kg and is fully replenished in 2 months time at 8 hours per day operation, 25
days a month. A ceramic grinding media is offered to this paint company, costing P400 per kg
and needs 30 kg load in the sand mill, but guarantees an output of 120 liters per hour and full
replenishment of media in 3 months. If profit on paint reduction is P15 per liter how much is a
difference in profit between the two media?
A. P436,900
B. P462,000
C. P473,000
D. P498,200
474.
If P1000 accumulates to P1500 when invested at a simple interest for three years, what
is the rate of interest?
A. 14.12%
B. 15.89%
C. 16.67%
D. 16.97%
475.
You loan from a loan firm an amount of P100,000 with a rate of simple interest of 20%
but the interest was deducted from the loan at the time the money was borrowed. If at the end
of one year, you have to pay the full amount of P100,000, what is the actual rate of interest?
A. 23.5%
B. 24.7%
C. 25.0%
D. 25.8%
476.
A loan of P5,000 is made for a period of 15 months, at a simple interest rate of 15%,
what future amount is due at the end of the loan period?
A. P5,937.50
B. P5,873.20
C. P5,712.40
D. P5,690.12
477.
If you borrowed money from your friend with simple interest at 12%, find the present
worth of P50,000, which is due at the end of 7 months.
A. P46,728.97
B. P47,098.12
C. P47,890.12
D. P48,090.21
478.
Mr. J. Reyes borrowed money from the bank. He received from the bank P1,842 and
promised to repay P2,000 at the end of 10 months. Determine the rate of simple interest.
A. 12.19%
B. 12.03%
C. 11.54%
D. 10.29%
479.
If you borrowed P10,000 from a bank with 18% interest per annum, what is the total
amount to be repaid at the end of one year?
A. P10,900
B. P11,200
C. P11,800
D. P12,000
480.
A price tag of P1,200 is payable in 60 days but if paid within 30 days it will have a 3%
discount. Find the rate of interest.
A. 35.45%
B. 35.89%
C. 36.18%
D. 37.11%
481.
A man borrowed P2,000 from a bank and promised to pay the amount for one year. He
received only the amount of P1,920 after the bank collected an advance interest of P80.00.
What was the rate of discount?
A. 3.67%
B. 4.00%
C. 4.15%
D. 4.25%
482.
A man borrowed P2,000 from a bank and promised to pay the amount for one year. He
received only the amount of P1,920 after the bank collected an advance interest of P80.00.
What was the rate of interest that the bank collected in advance?
A. 4.00%
B. 4.07%
C. 4.17%
D. 4.25%
483.
What will be the future worth of money after 12 months if the sum of P25,000 is
invested today at simple interest rate of 1% per year?
A. P25,168
B. P25,175
C. P25,189
D. P25,250
484.
What will be the future worth of money after 12 months if the sum of P25,000 is
invested today at simple interest rate of 1% per month?
A. P28,000
B. P28,165
C. P28,289
D. P28,250
485.
480 It is the practice of almost all banks in the Philippines that when they grant a loan,
the interest for one year is automatically deducted from the principal amount upon release of
money to a borrower. Let us therefore assume that you applied for a loan with a bank and the
P80,000 was approved at an interest rate of 14% of which P11,200 was deducted and you were
given a check of P68,800. Since you have to pay the amount of P80,000 one year after, what
then will be the effective interest rate?
A. 16.02%
B. 16.28%
C. 16.32%
D. 16.47%
486.
A deposit of P110,000 was made for 31 days. The net interest after deducting 20%
withholding tax is P890.36. Find the rate of return annually.
A. 11.50%
B. 11.75%
C. 11.95%
D. 12.32%
487.
P5,000 is borrowed for 75 days at 16% per annum simple interest. How much will be
due at the end of 75 days?
A. P5,066.67
B. P5,133.33
C. P5,050.00
D. P5,166.67
488.
A businessman wishes to earn 7% on his capital after payment of taxes. If the income
from an available investment will be taxed at an average rate of 42%, what minimum rate of
return, before payment of taxes, must the investment offer to be justified?
A. 12.07%
B. 12.34%
C. 12.67%
D. 12.87%
489.
A man borrowed P20,000 from a local commercial bank which has a simple interest of
16% but the interest is to be deducted from the loan at the time that the money was borrowed
and the loan is payable at the end of one year. How much is the actual rate of interest?
A. 19.05%
B. 19.34%
C. 19.67%
D. 19.87%
490.
P4,000 is borrowed for 75 days at 16% per annum simple interest. How much will be
due at the end of 75 days?
A. P4,033.33
B. P4,333.33
C. P4,133.33
D. P4,666.67
491.
Agnes Abanilla was granted a loan of P20,000 by her employer CPM Industrial Fabricator
and Construction Corporation with an interest rate of 6% for 180 days on the principal collected
in advance. The corporation would accept a promissory note for P20,000 non-interest for 180
days. If discounted at once, find the proceeds of the note.
A. P18,800
B. P18,900
C. P19,000
D. P19,100
492.
If you borrow money from your friend with simple interest of 12%, find the present
worth of P20,000 which is due at the end of nine months.
A. P18,992.08
B. P18,782.18
C. P18,348.62
D. P18,120.45
493.
A man borrowed from a bank under a promissory note that he signed in the amount of
P25,000.00 for a period of one year. He receives only the amount of P21,915.00 after the bank
collected the advance interest and an additional of P85.00 for notarial and inspection fees. What
was the rate of interest that the bank collected in advance?
A. 13.05%
B. 13.22%
C. 13.46%
D. 13.64%
494.
Mr. Danilo Conde borrowed money from a bank. He received from the bank P1,340.00
and promised to pay P1,500.00 at the end of 9 months. Determine rate of simple interest.
A. 15.92%
B. 15.75%
C. 15.45%
D. 15.08%
495.
Mr. J. Dela Cruz borrowed money from a bank. He receives from the bank P1,340.00 and
promised to pay P1,500.00 at the end of 9 months. Determine the corresponding discount rate
o ofte efe ed to as the a ke s dis ou t.
A. 13.15%
B. 13.32%
C. 13.46%
D. 13.73%
496.
Annie buys a television set from a merchant who ask P1,250.00 at the end of 60 days.
Annie wishes to pay immediately and the merchant offers to compute the cash price on the
assumption that money is worth 8% simple interest. What is the cash price?
A. P1,124.67
B. P1,233.55
C. P1,289.08
D. P1,302.67
497.
A man borrowed money from a loan shark. He receives from the loan shark and amount
of P1,342.00 and promised to repay P1,500.00 at the end of 3 quarters. What is the simple
interest rate?
A. 15.47%
B. 15.69%
C. 15.80%
D. 15.96%
498.
Determine the exact simple interest on P5,000 invested for the period from January
15,1996 to October 12,1996, if the rate interest is 18%.
A. P664.23
B. P664.89
C. P665.21
D. P666.39
499.
The exact simple interest of P5,000 invested from June 21,1995 to December 25,1995 is
P100. What is the rate of interest?
A. 3.90%
B. 3.92%
C. 3.95%
D. 3.98%
500.
A man invested P110,000 for 31 days. The net interest after deducting 20% withholding
tax is P890.36. Find the rate of return annually.
A. 11.50 %
B. 11.75 %
C. 11.95 %
D. 12.32 %
501.
On her recent birthday, April 22, 2001, Nicole was given by her mother a certain sum of
money as birthday present. She decided to invest the said amount on 20% exact simple interest.
If the account will mature on Christmas day at an amount of P10,000.00, how much did Nicole
receive from her mother on her birthday?
A. P8,807.92
B. P8,827.56
C. P8,832.17
D. P8,845.78
502.
What is the ordinary interest on P1,500.50 for 182 days at 5.2%?
A. P39.01
B. P39.45
C. P39.82
D. P39.99
503.
Nicole has P20,400 in cash. She invested it at 7% from March 1, 2006 to November 1,
at % i te est. Ho
u h is the i te est usi g the Ba ke s Rule?
A. P972.12
B. P970.78
C. P973.12
D. P971.83
504.
The amount of P20,000 was deposited in a bank earning an interest of 6.5% per annum.
Determine the total amount at the end of 7 years if the principal and interest were not
withdrawn during this period?
A. P30,890.22
B. P30,980.22
C. P31,079.73
D. P31,179.37
505.
A loan for P50,000 is to be paid in 3 years at the amount of P65,000. What is the
effective rate of money?
A. 9.01%
B. 9.14%
C. 9.31%
D. 9.41%
506.
The amount of P50,000 was deposited in the bank earning an interest of 7.5% per
annum. Determine the total amount at the end of 5 years, if the principal and interest were not
A. P71,781.47
B. P71,187.47
C. P71,817.47
D. P71,718.47
507.
Find the present worth of a future payment of P80,000 to be made in six years with an
interest of 12% compounded annually.
A. P40,540.49
B. P40,450.49
C. P40,350.49
D. P40,530.49
508.
What is the effective rate corresponding to 18% compounded daily? Take 1 year is equal
to 360 days.
A. 19.61%
B. 19.44%
C. 19.31%
D. 19.72%
509.
What nominal rate, compounded semi-annually, yields the same amount as 16%
A. 16.09%
B. 16.32%
C. 16.45%
D. 16.78%
510.
What rate of interest compounded annually is the same as the rate of interest of 8%
A. 8.07%
B. 8.12%
C. 8.16%
D. 8.24%
511.
Find the nominal rate, which if converted quarterly could be used instead of 12%
compounded semi-annually.
A. 11.83%
B. 11.09%
C. 11.65%
D. 11.25%
512.
Which of these gives the lowest effective rate of interest?
A. 12.35% compounded annually
B. 11.90% compounded semi-annually
C. 12.20% compounded quarterly
D. 11.60% compounded monthly
513.
Find the compound amount if P2,500 is invested at 8% compounded quarterly for 5
years and 6 months.
A. P3,864.95
B. P3,846.59
C. P3,889.95
D. P3,844.95
514.
An amount of P1,000 becomes P1,608.44 after 4 years compounded bimonthly. Find the
nominal interest.
A. 11.89%
B. 12.00%
C. 12.08%
D. 12.32%
515.
If P5,000 shall accumulate for 10 years at 8% compounded quarterly, then what is the
compound interest at the end of 10 years?
A. P6,080.40
B. P6,020.40
C. P6,040.20
D. P6,060.20
516.
What is the corresponding effective rate of 18% compounded semi-quarterly?
A. 19.24%
B. 19.48%
C. 19.84%
D. 19.92%
517.
Find the present worth of a future payment of P100,000 to be made in 10 years with an
interest of 12% compounded quarterly.
A. P30,555.68
B. P30,656.86
C. P30,556.86
D. P30,655.68
518.
In how many years is required for P2,000 to increase by P3,000 if interest at 12%
compounded semi-annually?
A. 7.86 years
B. 7.65 years
C. 7.23 years
D. 8.12 years
519.
The amount of P150,000 was deposited in the bank earning an interest of 7.5% per
annum. Determine the total amount at the end of 5 years, if the principal and interest were not
A. P215,344.40
B. P213,544.40
C. P234,153.40
D. P255.443.10
520.
How long will it take money to double itself if invested at 5% compounded annually?
A. 13.7 years
B. 14.2 years
C. 14.7 years
D. 15.3 years
521.
What is the corresponding effective interest rate of 18% compounded semi-monthly?
A. 19.35%
B. 19.84%
C. 19.48%
D. 19.64%
522.
What is the effective rate of 14% compounded semi-annually?
A. 14.49%
B. 14.59%
C. 14.69%
D. 14.79%
523.
At an interest rate of 10% compounded annually, how much will a deposit of P1,500 be
in 15 years?
A. P6,265.87
B. P6,256.78
C. P6,526.87
D. P6,652.78
524.
A man expects to receive P25,000 in 8 years. How much is that money worth now
considering interest at 8% compounded quarterly?
A. P13,256.83
B. P13,655.28
C. P13,625.83
D. P13,265.83
525.
About how many years will P100,000 earn a compound interest of P50,000 if the
interest rate is 9% compounded quarterly?
A. 4 years
B. 5 years
C. 6 years
D. 7 years
526.
Compute the equivalent rate of 6% compounded semi-annually to a rate compounded
quarterly.
A. 5.12%
B. 5.96%
C. 5.78%
D. 6.12%
527.
What is the amount of P12,800 in 4 years at 5% compounded quarterly?
A. P15,461.59
B. P15,146.95
C. P15,641.59
D. P15,614.59
528.
By the condition of a will, the sum of P20,000 is left to a girl to be held in trust fund by
her guardian until it amounts to P50,000. When will the girl receive the money if the fund is
A. 11.23 years
B. 11.46 years
C. 11.57 years
D. 11.87 years
529.
If P50,000 shall accumulate for 10 years at 4% compounded quarterly, find the
compounded interest at the end of 10 years.
A. P2,333.32
B. P2,444.32
C. P2,555.32
D. P2,666.32
530.
A sum of P1,000 is invested now and left for eight years, at which time the principal is
withdrawn. The interest has accrued is left for another eight years. If the effective annual
interest rate is 5%, what will be the withdrawal amount at the end of the 16th year.
A. P693.12
B. P700.12
C. P702.15
D. P705.42
531.
P1,500.00 was deposited in a bank account, 20 years ago. Today, it is worth P3,000.00.
Interest is paid semi-annually. Determine the interest rate paid on this account.
A. 2.9%
B. 3.0%
C. 3.2%
D. 3.5%
532.
A merchant puts in his P2,000.00 to a small business for a period of six years. With a
given interest rate on the investment of 15% per year, compounded annually, how much will he
collect at the end of the sixth year?
A. P4,626.12
B. P4,262.12
C. P4,383.12
D. P4,444.12
533.
A man borrowed P100,000 at the interest rate of 12% per annum, compounded
quarterly. What is the effective rate?
A. 12.75%
B. 12.55%
C. 12.45%
D. 12.35%
534.
Mandarin Bank advertises 9.5% account that yields 9.84% annually. Find how often the
interest is compounded.
A. Monthly
B. Bimonthly
C. Quarterly
D. Annually
535.
When will an amount be tripled with an interest of 11.56%?
A. 9 years
B. 10 years
C. 11 years
D. 12 years
536.
A student plans to deposit P1,500.00 in the bank now and another P3,000.00 for the
next 2 years. If he plans to withdraw P5,000.00 three years from after his last deposit for the
purpose of buying shoes, what will be the amount of money left in the bank after one year of his
withdrawal? Effective annual interest rate is 10%.
A. P1,549.64
B. P1,459.64
C. P1,345.98
D. P1,945.64
537.
How much must be invested on January 1, 1998 in order to accumulate P2,000 on
January 1, 2003? Money is worth 6%.
A. P1,509.34
B. P1,249.64
C. P1,378.98
D. P1,494.52
538.
A nominal interest of 3% compounded continuously is given on the account. What is the
accumulated amount of P10,000 after 10 years?
A. P13,498.59
B. P13,489.59
C. P13,789.98
D. P13,494.52
539.
A mechanical engineer wishes to accumulate a total of P10,000 in a savings account at
the end of 10 years. If the bank pays only 4% compounded quarterly, what should be the initial
deposit?
A. P6,176.35
B. P6,761.35
C. P6,716.53
D. P6,167.35
540.
Funds are deposited in a savings account at an interest of 8% per annum. What is the
initial amount that must be deposited to yield a total of P10,000 in 10 years?
A. P4,196.30
B. P4,721.39
C. P4,796.03
D. P4,631.93
541.
If P500,000 is deposited at a rate of 11.25% compounded monthly, determine the
compounded interest after 7 years and 9 months.
A. P690,848.73
B. P670,651.23
C. P680,649.56
D. P685,781.25
542.
An interest rate is quoted as being 7.5% compounded quarterly. What is the effective
annual interest rate?
A. 7.91%
B. 7.51%
C. 7.71%
D. 7.31%
543.
You borrow P3,500.00 for one year from a friend at an interest rate of 1.5% per month
instead of taking a loan from a bank at a rate of 18% per year. How much lesser you will pay by
borrowing the money from the bank?
A. P53.89
B. P54.66
C. P53.78
D. P54.98
544.
A deposit of P1,000 is made in a bank account that pays 8% interest compounded
annually. Approximately how much money will be in the account after 10 years?
A. P2,187.39
B. P2,145.78
C. P2,176.45
D. P2,158.92
545.
Fifteen years ago P1,000.00 was deposited in a bank account, and today it is worth
P2,370.00. The bank pays interest semi-annually. What was the interest rate paid in this
account?
A. 5.72%
B. 5.78%
C. 5.84%
D. 5.90%
546.
P200,000 was deposited on January 1, 1988 at an interest rate of 24% compounded
semi-annually. How much would the sum be on January 1, 1993?
A. P631,627.78
B. P612,890.76
C. P621,169.64
D. P611,672.18
547.
What is the present worth of two P100 payments at the end of the third year and fourth
year? The annual interest rate is 8%.
A. P150.56
B. P152.88
C. P153.89
D. P151.09
548.
Consider a deposit of P600.00 to be paid back in one year by P700.00. What is the rate
of interest, i% per year compounded annually such that the net present worth of the investment
is positi e? Assu e i .
A. 16.50%
B. 16.75%
C. 16.33%
D. 16.67%
549.
A firm borrows P2,000 for 6 years at 8 %. At the end of 6 years, it renews the loan for
the amount due plus P2,000 more for 2 years at 8%. What is the lump sum due?
A. P3,260.34
B. P3,280.34
C. P3,270.34
D. P3,250.34
550.
A machine has been purchased and installed at a total cost of P18,000.00. The machine
will retire at the end of 5 years, at which time it is expected to have a scrap value of P2,000.00
based on current prices. The machine will then be replaced with an exact duplicate. The
company plans to establish a reserve funds to accumulate the capital needed to replace the
machine. If an average annual rate of inflation of 3% is anticipated, how much capital must be
accumulated?
A. P18,854.38
B. P18,548.38
C. P18,458.38
D. P18,845,38
551.
What is the effective rate corresponding to 16% compounding daily? Take 1 year = 360
days.
A. 17.35%
B. 17.45%
C. 17.55%
D. 17.65%
552.
By the condition of a will, the sum of P25,000 is left to a girl to be held in a trust fund by
her guardian until it amounts to P45,000. When will the girl receive the money if the fund is
A. 7.42 years
B. 7.67 years
C. 7.85 years
D. 7.98 years
553.
P200,000 was deposited at an interest rate of 24% compounded semi-annually. After
how many years will the sum be P621,170?
A. 4 years
B. 5 years
C. 6 years
D. 7 years
554.
In year zero, you invest P10,000.00 in a 15% security for 5 years. During that time, the
average annual inflation is 6%. How much, in terms of year zero pesos will be in the account at
maturity?
A. P15,030.03
B. P20,113.57
C. P18,289.05
D. P16,892.34
555.
A company invests P10,000 today to be repaid in 5 years in one lump sum at 12%
compounded annually. How much profit in present day pesos is realized?
A. P7,563.29
B. P7,498.20
C. P7,340.12
D. P7,623.42
556.
How long (in nearest years) will it take money to quadruple if it earns 7% compounded
semi-annually?
A. 20 years
B. 18 years
C. 21 years
D. 19 years
557.
How much should you put into a 10% savings account in order to have P10,000.00 in five
years?
A. P6,216.21
B. P6,212.12
C. P6,218.21
D. P6,209.21
558.
A man expects to receive P20,000 in 10 years. How much is that money worth now
considering interest at 6% compounded quarterly?
A. P11,042.89
B. P11,035.12
C. P11,025.25
D. P11,012.52
559.
P500,000 was deposited 20.15 years ago at an interest rate of 7% compounded semiannually. How much is the sum now?
A. P2,000,033.33
B. P2,000,166.28
C. P2,001,450.23
D. P2,002,820.12
560.
A bank pays one percent interest on savings accounts four times a year. What is the
effective annual interest rate?
A. 4.06%
B. 4.12%
C. 4.16%
D. 4.28%
561.
Alexander Michael owes P25,000.00 due in 1 year and P75,000 due in 4 years. He agrees
to pay P50,000.00 today and the balance in 2 years. How much must he pay at the end of two
years if money is worth 5% compounded semi-annually?
A. P39,015.23
B. P39,026.25
C. P39,056.21
D. P39,089/78
562.
Find the difference between simple interest and compound interest on a savings deposit
of P50,000 at 10% per annum for 3 years.
A. P1,510
B. P1,530
C. P1,550
D. P1,570
563.
If money is worth 5% compounded quarterly, find the equated time for paying a loan of
P150,000 due in 1 year and P280,000 due in 2 years.
A. 1.52 years
B. 1.64 years
C. 1.69 years
D. 1.72 years
564.
For a loan acquired six years ago, a man paid out the amount of P75,000.00. The interest
was computed at 18% compounded annually. How much was the borrowed amount?
A. P27,367.28
B. P27,278.36
C. P27,782.36
D. P27,872.63
565.
A couple decided that for every child that will be born to them they will place a deposit
i the a k so that o the hilds th i thda , the hild ill e ei e the a ou t of
P300,000.00. If the bank will pay an interest of 18% compounded yearly, how much deposit will
the couple have to make on the birth of a child to them?
A. P15,367.18
B. P15,249.13
C. P15,722.16
D. P15,482.64
566.
On his 6th birthday a boy is left an inheritance. The inheritance will be paid in a lump
su of P ,
o his st i thda . What is the p ese t alue of the i he ita e as of the o s
6th birthday, if the interest is compounded annually? Assume i = 4%.
A. P5,552.64
B. P5,549.10
C. P5,522.12
D. P5,582.63
567.
A man who won P300,000 in a lottery decided to place 50% of his winning in a trust fund
for the college education of his son. If the money will earn 14% per year compounded quarterly,
how much will the man have at the end of 10 years when his son will be starting his college
education?
A. P593,120.12
B. P593,452.12
C. P592,739.96
D. P593,888.96
568.
If the sum of P15,000 is deposited in an account earning 4% per annum compounded
quarterly, what will be the deposited amount at the end of 5 years?
A. P18,302.85
B. P18,450.89
C. P18,512.83
D. P18,638.29
569.
The Philippine Society of Mechanical Engineers is planning to put up its own building.
Two proposals being considered are:
a. The construction of the building now to cost P400,000.
b. The construction of a smaller building now to cost P300,000 and at the end of 5 years,
an extension to be added to cost P200,000.
By how much is proposal B more economical than proposal A if interest rate is 20% and
depreciation is to be neglected?
A. P19,122.15
B. P19,423.69
C. P19,518.03
D. P19,624.49
570.
A credit plan charges interest rate of 36% compounded monthly. Find its effective rate.
A. 42.21%
B. 42.30%
C. 42.41%
D. 42.57%
571.
A master card compounds monthly and charges an interest of 1.5% per month. What is
the effective interest rate per year?
A. 19.23%
B. 19.45%
C. 19.56%
D. 19.65%
572.
A man expects to receive P20,000 in 10 years. If interest is computed at 6%
compounded quarterly, how much is it worth today?
A. P11,025.25
B. P11,035.25
C. P11,045.25
D. P11,055.25
573.
Microsoft CEO, billionaire Bill Gates willed that a sum of $25 million be given to a child
ut ill e held i t ust the hilds othe u til it a ou ts to $45 million. If the amount is
invested and earns 8% compounded quarterly, when will the child receive the money?
A. 8.11 years
B. 7.90 years
C. 7.42 years
D. 7.24 years
574.
Find the present value of installment payments of P1,000 now, P2,000 at the end of the
first year, P3,000 at the end of the second year, P4,000 at the end of the third year and P5,000
at the end of the fourth year, if money is worth 10% compounded annually.
A. P11,411.10
B. P11,530.98
C. P11,621.67
D. P11,717.85
575.
How long will it take money to triple itself if invested at 8% compounded annually?
A. 14.27 years
B. 14.56 years
C. 14.78 years
D. 14.98 years
576.
Two hundred years ago, your great, great, great grandfather deposited P1 in a savings
account. Today, the bank notified you that you are the sole heir to this account. How much is
the account today if it earns 8% per annum?
A. P4,002,450.78
B. P4,102,405.90
C. P4,838,949.58
D. P4,909,289.45
577.
What is the present worth of a future payment of P200,000 to be made in 10 years with
an interest of 10% compounded annually?
A. P76,901.21
B. P77,108.66
C. P78,109.32
D. P79,667.32
578.
A deposit of P1,000.00 is made in a bank account that pays 8% interest compounded
annually. How much money will be in the account after 10 years?
A. P2,374.21
B. P2,158.92
C. P2,734.12
D. P2,400.12
579.
What nominal rate compounded annually would quadruple the principal in 4 years?
A. 41.42%
B. 40.81%
C. 41.79%
D. 40.45%
580.
Five years ago, you paid P34,000 for a residential lot. Today you sell it at P50,000. What
is your annual rate of appreciation?
A. 8.12%
B. 8.00%
C. 7.92%
D. 8.32%
581.
Suppose that P100,000 is invested at a certain rate of interest compounded annually for
2 years. If the accumulated interest at the end of 2 years is P21,000. Find the rate of interest.
A. 10.12%
B. 10.00%
C. 10.92%
D. 10.32%
582.
An investment of P20,000 will be required at the end of the year. The project would
terminate at the end of the 5th year and the assets are estimated to have a salvage value of
P25,000 at that time. What is the rate of interest for this project to break even?
A. 5.74%
B. 5.43%
C. 5.91%
D. 5.67%
583.
Robin Padilla possesses a promissory note, due in 2 years hence, whose maturity value
is P3,200. What is the discount value of this note, based on an interest rate of 7%?
A. P2,795.00
B. P2,975.00
C. P2,579.00
D. P2,759.00
584.
JM borrowed a certain amount on June 1990 from DJ. Two years later, JM borrowed
again from DJ an amount of P5,000. JM paid P1,000 on June 1993 and discharged his balance by
paying P7,500 on June 1995. What was the amount borrowed by JM on June 1990 if the interest
is 8% compounded annually?
A. P1,511.61
B. P1,611.51
C. P1,711.41
D. P1,811.31
585.
Dr. Gary Sy invests P50,000 in a time deposit that yields 10% for his retirement 30 years
from now. If the inflation rate is 5%, what will be the value of the account at maturity in terms
of toda s peso.
A. P201,689.91
B. P201,571.91
C. P201,345.91
D. P201,869.91
586.
First Benchmark Publisher Inc. invests P100,000 today to be repaid in five years in one
lump sum at 12% compounded annually. If the rate of inflation is 4% compounded annually,
ho
u h p ofit, i toda s pesos, is ealized o e the fi e-year period?
A. P44,512.89
B. P44,672.10
C. P44,851.64
D. P44,901.23
587.
A manufacturing firm contemplates retiring an existing machine at the end of 2002. The
new machine to replace the existing one will have an estimated cost of P400,000. This expense
will be partially defrayed by the sale of the old machine as scrap for P30,000. To accumulate the
balance of the required capital, the firm will deposit the following sum in an account earning
interest at 5% compounded quarterly:
P60,000 at the end of 1999
What cash disbursement will be necessary at the end of 2002 to purchase the new machine?
A. P155,890.12
B. P153,085.56
C. P154,200.12
D. P156,930.38
588.
On June 1, 1998, Ms. Brenda Marcial purchased stock of San Miguel Corporation at a
total cost of P144,000. She then received the following semiannual dividends:
P4,200 on December 1, 1998
P4,400 on June 1, 1999
P4,400 on December 1, 1999
P4,000 on June 1, 2000
After receiving the last dividend, Ms. Marcial sold her stock, receiving P152,000 after deduction
of brokerage fees. What semiannual rate did this dividend realize on her investment?
A. 4.26%
B. 4.54%
C. 4.87%
D. 4.91%
589.
Engr. Narito has P13,760 in cash and he would like to invest it in business. His estimates
of the year-by-year receipts and disbursements for all purposes are shown in the tabulation
below:
Year
Receipts
Disbursements
- P13,760
P5,000
+ P1,000
P6,200
+ P1,200
P7,500
+ P1,500
P8,800
+ P1,800
He estimates that his equipment will have a salvage value of P2,000 at the end of useful life.
Find the rate of return of the prospective equipment.
A. 10.11%
B. 11.80%
C. 11.10%
D. 10.51%
590.
What interest rate, compounded monthly, is equivalent to a 10% effective rate?
A. 9.45%
B. 9.26%
C. 9.65%
D. 9.56%
591.
Froyd Wess Network Inc. plans to purchase a piece of land and to build a school building
on this land. However, since the school building is not an immediate requirement, the institute
is considering whether it should purchase this land and build the building now or defer this
action for 3 years. The current costs are as follows:
Land: P800,000 Building: P12,000,000
The purchase price of the land and the cost of the school building are expected to appreciate at
the rate of 15% and 4% per annum, respectively. What will be the total cost of the land and
structure 3 years hence?
A. P14,520,120
B. P14,715,068
C. P14,902,189
D. P15,021,781
592.
Mr. Jimenez owes Mr. Padua the following amounts:
P40,000 due 2 years hence

Having won the lottery, Mr. Jimenez decided to liquidate the debts at the present time. If the
two parties agree on a 5% interest rate, what sum must Mr. Jimenez pay?
A. P147,520.20
B. P147,346.02
C. P147,902.89
D. P147,021.81
593.
Mr. John Bongat working in the United States planned of returning to the Philippines at
the end of 2001. He established a fund starting in 1995 with the following recorded deposits and
withdrawals.
January 1, 1995 Deposit of P40,000
January 1, 1997 Deposit of P80,000
July 1, 1997 Withdrawal of P12,000
July 1, 1998 Deposit of P64,000
January 1, 1999 Withdrawal of P48,000
His fund earned interest at the rate of 3.5% compounded semiannually until the end of 1997. At
that date, the interest was augmented to 4% compounded semiannually. What will be the
principal in the fund at the end of 2001?
A. P146,323.08
B. P146,992.99
C. P146,846.92
D. P146,022.82
594.
JRT Publishers is contemplating of installing a labor-saving printing equipment. It has a
choice between two different models. Model A will cost P1,460,000 while model B will cost
P1,452,000. The anticipated repair costs for each model are as follows:
Model A: P60,000 at the end of 5th year
P80,000 at the end of 10th year
Model B: P152,000 at the end of 9th year
The two models are alike in all other respects. If the publisher is earning a 7% return of its
capital, which model should be purchased? How much savings will be accrued if the publisher
will purchase the more economical model?
A. P8,769.18
B. P8,918.23
C. P9,012.53
D. P9,341.11
595.
What is the future amount of P50,000 if the single payment compound amount factor of
this investment is 1.23%
A. P61,700
B. P61,900
C. P61,200
D. P61,500
596.
A i est e t i di ates a si gle o pou d a ou t fa to of .
years. If the interest rate is 4.7 % pe a u , fi d the alue of .
A. 4
B. 5
C. 6
D. 7
if i ested fo
597.
Mr. Mondragon invests P50,000 today. Several years later, it becomes P60,000. What is
the single payment present worth factor of this investment? If the amount was invested for 5
years, what is the rate of interest?
A. 3.1%
B. 3.3%
C. 3.5%
D. 3.7%
598.
Money is deposited in a certain account for which the interest is compounded
continuously. If the balance doubles in 6 years, what is the annual percentage rate?
A. 11.55%
B. 11.66%
C. 11.77%
D. 11.88%
599.
On January 1, 1999, Ms. Angel Locsin opened an account at Bank of Philippine Islands
with an initial deposit of P1,000,000.00. On March 1, 2000, she opened an additional
P1,000,000.00. If the bank pays 12% interest compounded monthly, how much will be in the
account on April 1, 2000?
A. P2,180,968.95
B. P2,190,968.95
C. P2,160,968.95
D. P2,170,968.95
600.
The pape u e
supply.
A. T-bills
B. Bank note
C. Check
D. Coupon
issued
the Ce t al Ba k hi h fo
s pa t of the ou t s
o e
601.
Reduction in the level of national income and output usually accompanied by the fall in
the general price level.
A. Devaluation
B. Deflation
C. Inflation
D. Depreciation
602.
It is a series of equal payments occurring at equal interval of time.
A. Annuity
B. Debt
C. Amortization
D. Deposit
603.
The place where buyers and sellers come together.
A. Market
B. Business
C. Recreation center
D. Buy and sell section
604.
A market whereby there is only one buyer of an item for which there are no goods
substitute
A. Monopsony
B. Oligopoly
C. Monopoly
D. Oligopsony
605.
It is a series of equal payments occurring at equal interval of time where the first
payment is made after several periods, after the beginning of the payment.
A. Perpetuity
B. Ordinary annuity
C. Annuity due
D. Deferred annuity
606.
The total income equals the total operating cost.
A. Balanced sheet
B. In-place value
C. Check and balance
D. Break even no gain no loss
607.
Kind of obligation which has no condition attached.
A. Analytic
B. Pure
C. Gratuitous
D. Private
608.
Direct labor costs incurred in the factory and direct material costs are the costs of all
materials that go into production. The sum of these two direct costs is known as:
A. GS and A expenses
B. Operating and maintenance costs
C. Prime cost
D. O and M costs
609.
An index of short term paying ability is called:
A. Receivable turn-over
B. Profit margin ratio
C. Current ratio
D. Acid-test ratio
610.
Artificial expenses that spread the purchase price of an asset or another property over a
number of years.
A. Depreciation
B. Sinking fund
C. Amnesty
D. Bond
611.
Estimated value at the end of the useful life.
A. Market value
B. Fair value
C. Salvage value
D. Book value
612.
Consists of the actual counting or determination of the actual quantity of the materials
on hand as of a given date.
B. Material update
C. Technological assessment
D. Material count
613.
Additional information of prospective bidders on contract documents issued prior to
bidding date.
A. Delict
B. Escalatory
C. Technological assessment
D. Bid bulletin
614.
A series of uniform accounts over an infinite period of time.
A. Depreciation
B. Annuity
C. Perpetuity
D. Inflation
615.
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. P727.17
B. P717.17
C. P714.71
D. P731.17
616.
Today, a businessman borrowed money to be paid in 10 equal payments for 10
quarters. If the interest rate is 10% compounded quarterly and the quarterly payment is P2,000,
how much did he borrow?
A. P17,304.78
B. P17,404.12
C. P17,504.13
D. P17,604.34
617.
What annuity is required over 12 years to equate with a future amount of P20,000?
Assume i = 6% annually.
A. P1,290.34
B. P1,185.54
C. P1,107.34
D. P1,205.74
618.
Find the annual payment to extinguish a debt of P10,000 payable for 6 years at 12%
interest annually.
A. P2,324.62
B. P2,234.26
C. P2,432.26
D. P2,342.26
619.
A manufacturer desires to set aside a certain sum of money to provide funds to cover
the yearly operating expenses and the cost of replacing every year the dyes of a stamping
machine used in making radio chassis as model changes for a period of 10 years.
Operating cost per year = P500.00
Cost of dye = P1,200.00
Salvage value of dye = P600.00
The money will be deposited in a savings account which earns 6% interest. Determine the sum
of money that must be provided, including the cost of the initial dye.
A. P8,626.02
B. P8,662.02
C. P8,226.02
D. P8,666.22
620.
A factory operator bought a diesel generator set for P10,000.00 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. P2,500.57
B. P2,544.45
C. P2,540.56
D. P2,504.57
621.
A man paid 10% downpayment of P200,000 for a house and lot and agreed to pay the
90% balance on monthly installment for 60 months at an interest rate of 15% compounded
monthly. Compute the amount of the monthly payment.
A. P42,821.86
B. P42,128.67
C. P42,218.57
D. P42,812.68
622.
What is the present worth of a 3 year annuity paying P3,000.00 at the end of each year,
with interest at 8% compounded annually?
A. P7,654.04
B. P7,731.29
C. P7,420.89
D. P7,590.12
623.
What is the accumulated amount of five-year annuity paying P6,000 at the end of each
year, with interest at 15% compounded annually?
A. P40,519.21
B. P40,681.29
C. P40,454.29
D. P40,329.10
624.
A debt of P10,000 with 10% interest compounded semi-annually is to be amortized by
semi-annual payment over the next 5 years. The first due in 6 months. Determine the semiannual payment.
A. P1,234.09
B. P1,255.90
C. P1,275.68
D. P1,295.05
625.
A man borrowed P300,000 from a lending institution which will be paid after 10 years at
an interest rate of 12% compounded annually. If money is worth 8% per annum, how much
should he deposit to a bank monthly in order to discharge his debt 10 yrs. hence?
A. P5,174.23
B. P5,162.89
C. P5,190.12
D. P5,194.23
626.
A man loans P187,400 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. P43,600.10
B. P43,489.47
C. P43,263.91
D. P43,763.20
627.
Money borrowed today is to be paid in 6 equal payments at the end of 6 quarters. If the
interest is 12% compounded quarterly, how much was initially borrowed if quarterly payment is
P2,000.00?
A. P10,834.38
B. P10,278.12
C. P10,450.00
D. P10,672.90
628.
A person buys a piece of lot for P100,000 downpayment and 10 deferred semi-annual
payments of P8,000 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. P142,999.08
B. P143,104.89
C. P142,189.67
D. P143,999.08
629.
How much must you invest today in order to withdraw P2,000 annually for 10 years if
the interest rate is 9%?
A. P12,835.32
B. P12,992.22
C. P12,562.09
D. P12,004.59
630.
How much must be deposited at 6% each year beginning on January 1, year 1, in order
to accumulate P5,000 on the date of the last deposit, January 1, year 6?
A. P728.99
B. P742.09
C. P716.81
D. P702.00
631.
A piece of machinery can be bought for P10,000 cash or for P2,000 down and payments
of P750 per year for 15 years. What is the annual interest rate for the time payments?
A. 4.61%
B. 4.71%
C. 4.41%
D. 4.51%
632.
A company issued 50 bonds of P1,000.00 face value each, redeemable at par at the end
of 15 years to accumulate the funds required for redemption. The firm established a sinking
fund consisting of annual deposits, the interest rate of the fund being 4%. What was the
principal in the fund at the end of the 12th year?
A. P38,120.00
B. P37,520.34
C. P37,250.34
D. P37,002.00
633.
A house and lot can be acquired by a downpayment of P500,000 and a yearly payment
of P100,000 at the end of each year for a period of 10 years, starting at the end of 5 years from
the date of purchase. If money is worth 14% compounded annually, what is the cash price of the
property?
A. P806,899.33
B. P807,100.12
C. P807,778.12
D. P808,835.92
634.
A parent on the day the child is born wishes to determine what lump sum would have to
be paid into an account bearing interest at 5% compounded annually, in order to withdraw
P ,
ea h o the hilds th, th, th a d st i thda s. Ho
u h is the lu p su
amount?
A. P30,119.73
B. P30,941.73
C. P30,149.37
D. P30,419.73
635.
An instructor plans to retire in exactly one year and want an account that will pay him
P25,000 a year for the next 15 years. Assuming a 6% annual effective interest rate, what is the
amount he would need to deposit now? (The fund will be depleted after 15 years).
A. P242,860.22
B. P242,680.22
C. P242,608.22
D. P242,806.22
636.
A manufacturing firm wishes to give each 80 employees a holiday bonus. How much is
needed to invest monthly for a year at 12% nominal interest rate compounded monthly, so that
each employee will receive a P2,000 bonus?
A. P12,615.80
B. P12,516.80
C. P12,611.80
D. P12,510.80
637.
A man purchased on monthly installment a P100,000 worth of land. The interest rate is
12% nominal and payable in 20 years. What is the monthly amortization?
A. P1,101.08
B. P1,202.08
C. P1,303.08
D. P1,404.08
638.
A young engineer borrowed P10,000 at 12% interest and paid P2,000 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. P6,999.39
B. P6,292.93
C. P6,222.39
D. P6,922.93
639.
An investment of P350,000 is made today and is equivalent to payments of P200,000
each year for 3 years. What is the annual rate of return on investment for the project?
A. 32.7%
B. 33.8%
C. 33.2%
D. 33.6%
640.
Maintenance cost of an equipment is P200,000 for 2 years, P40,000 at the end of 4
years and P80,000 at the end of 8 years. Compute the semi-annual amount that will be set aside
for this equipment. Money worth 10% compounded annually.
A. P7,425.72
B. P7,329.67
C. P7,245.89
D. P7,178.89
641.
Mr. Cruz plans to deposit for the education of his 5 years old son, P500 at the end of
each month for 10 years at 12% annual interest compounded monthly. The amount that will be
available in two years is:
A. P13,100.60
B. P13,589.50
C. P13,982.80
D. P13,486.70
642.
A small machine has an initial cost of P20,000, a salvage value of P2,000 and a life of 10
years. If your cost of operation per year is P3,500 and your revenues per year is P9,000, what is
the approximate rate of return (ROR) on the investment?
A. 24.2%
B. 24.8%
C. 25.1%
D. 25.4%
643.
An employee is about to receive the sum of P300.00 at the end of each year for 5 years.
One year prior to the receipt of the first sum, he decides to discount all 5 sum. If the interest
rate is 6%, what proceeds will he obtain?
A. P1,298.00
B. P1,231.09
C. P1,221.62
D. P1,263.71
644.
The president of a growing engineering firm wishes to give each of 50 employees a
holiday bonus. How much is needed to invest monthly for a year at 12% nominal rate
compounded monthly, so that each employee will receive a P1,000.00 bonus?
A. P3,942.44
B. P3,271.22
C. P3,600.12
D. P3,080.32
645.
Mr. Padilla plans a deposit of P500 at the end of each month for 10 years at 12% annual
interest, compounded monthly. What will be the amount that will be available in 2 years?
A. P13,941.44
B. P13,272.22
C. P13,486.73
D. P13,089.32
646.
Mr. Ramirez borrowed P15,000 two years ago. The terms of the loan are 10% interest
for 10 years with uniform payments. He just made his second annual payment. How much
principal does he still owe?
A. P13,841.34
B. P13,472.22
C. P13,286.63
D. P13,023.52
647.
A man inherited a regular endowment of P100,000 every end of 3 months for 10 years.
However, he may choose to get a single lump sum payment at the end of 4 years. How much is
this lump sum of the cost of money is 14% compounded quarterly?
A. P3,702,939.73
B. P3,607,562.16
C. P3,799,801.23
D. P3,676,590.12
648.
A man paid 10% down payment of P200,000 for a house and lot and agreed to pay the
ala e o
o thl i stall e ts fo
ea s at a i te est ate of % o pou ded o thl .
If the monthly installment was P42,821.87, find the value of x?
A. 3
B. 4
C. 5
D. 6
649.
You need P4,000 per year for four years to go to college. Your father invested P5,000 in
7% account for your education when you were born. If you withdraw P4,000 at the end of your
17th, 18th, 19th and 20th birthday, how much will be left in the account at the end of the 21st
year?
A. P1,666.98
B. P1,699.86
C. P1,623.89
D. P1,645.67
650.
Mr. Ayala borrows P100,000 at 10% effective annual interest. He must pay back the loan
over 30 years with uniform monthly payments due on the first day of each month. What does
Mr. Ayala pay each month?
A. P839.19
B. P842.38
C. P807.16
D. P814.75
651.
A machine is under consideration for investment. The cost of the machine is P25,000.00.
Each year it operates, the machine will generate a savings of P15,000.00. Given the effective
annual interest rate of 18%, what is the discounted payback period, in years, on the investment
of the machine?
A. 3.15
B. 1.75
C. 2.15
D. 2.75
652.
A machine costs P20,000.00 today and has an estimated scrap value of P2,000.00 after 8
years. Inflation is 2% per year. The effective annual interest rate earned on money invested is
8%. How much money needs to be set aside each year to replace the machine with an identical
model 8 years from now?
A. P3,345.77
B. P3,389.32
C. P3,489.11
D. P3,573.99
653.
Engr. Santos borrows P100,000.00 at 10% effective annual interest. He must pay back
the loan over 30 years with uniform monthly payment due on the first day of each month. What
does Engr. Santos pay each month?
A. P838.86
B. P849.12
C. P850.12
D. P840.21
654.
Instead of paying P100,000.00 in annual rent for office space at the beginning of each
year for the next 10 years, an engineering firm has decided to take out a 10-year P1,000,000.00
loan for a new building at 6% interest. The firm will invest P100,000.00 of the rent saved and
earn 18% annual interest on that amount. What ill e the diffe e e et ee the fi s a ual
revenue and expenses?
A. P10,200.12
B. P10,205.13
C. P10,210.67
D. P10,215.56
655.
A service car whose cash price was P540,000 was bought with a downpayment of
P162,000 and monthly installment of P10,874.29 for 5 years. What was the rate of interest if
compounded 5monthly?
A. 20%
B. 24%
C. 21%
D. 23%
656.
What uniform annual amount should be deposited each year in order to accumulate
P100,000.00 at the end of the 5th annual deposit if money earns 10% interest?
A. P16,002.18
B. P15,890.12
C. P16,379.75
D. P15,980.12
657.
In five years, P18,000 will be needed to pay for a building renovation. In order to
generate this sum, a sinking fund consisting of three annual payments is established now. For
tax purposes, no further payment will be made after three years. What payments are necessary
if money worth 15% per annum?
A. P3,919.52
B. P3,871.23
C. P3,781.32
D. P3,199.52
658.
Find the present value in pesos, of a perpetuity of P15,000 payable semi-annually if
money is worth 8% compounded quarterly.
A. P371,719.52
B. P371,287.13
C. P371,670.34
D. P371,802.63
659.
If P500.00 is invested at the end of each year for 6 years, at an annual interest rate of
7%, what is the total peso amount available upon the deposit of the sixth payment?
A. P3,671.71
B. P3,712.87
C. P3,450.12
D. P3,576.64
660.
How many years must you invest today in order to withdraw P1,000.00 per year for 10
years if the interest rate is 12%?
A. P5,467.12
B. P5,560.22
C. P5,650.22
D. P5,780.12
661.
A man paid a 10% down payment of P200,000 for a house and lot and agreed to pay the
balance on monthly installments for 5 years at an interest rate of 15% compounded monthly.
What was the monthly installment in pesos?
A. P42,821.87
B. P42,980.00
C. P43,102.23
D. P43,189.03
662.
A man inherited a regular endowment of P100,000.00 every end of 3 months for x years.
However, he may choose to get a single lump sum of P3,702,939.80 at the end of 4 years. If the
rate of interest was 14% compounded quarterly, what is the value of x?
A. 10
B. 11
C. 12
D. 13
663.
If you obtain a loan of P1M at the rate of 12% compounded annually in order to build a
house, how much must you pay monthly to amortize the loan within a period of 10 years?
A. P13,994.17
B. P14,801.12
C. P13,720.15
D. P14,078.78
664.
Rej Averion borrowed P50,000.00 from Social Security System, in the form of calamity
loan, with interest at 8% compounded quarterly payable in equal quarterly installments for 10
years. Find the quarterly payments.
A. P1,590.83
B. P1.609.23
C. P1,778.17
D. P1,827.79
665.
For having been loyal, trustworthy and efficient, the company has offered a supervisor a
yearly gratuity pay of P20,000.00 for 10 years with the first payment to be made one year after
his retirement. The supervisor, instead, requested that he be paid a lump sum on the date of his
retirement less interact that the company would have earned if the gratuity is to be paid on the
yearly basis. If interest is 15%, what is the equivalently lump sum that he could get?
A. P100,357.37
B. P100,537.73
C. P100,375.37
D. P100,735.37
666.
In anticipation of a much bigger volume of business after 10 years, a fabrication
company purchased an adjacent lot for its expansion program where it hopes to put up a
building projected to cost P4,000,000.00 when it will be constructed 10 years after, To provide
the required capital expense, it plans to put up a sinking fund for the purpose. How much must
the company deposit each year if interest to be earned is computed at 15%?
A. P194,089.17
B. P195,780.12
C. P196,801.56
D. P197,008.25
667.
A man purchased a car with a cash price of P350,000. He was able to negotiate with the
seller to allow him to pay only a downpayment of 20% and the balance payable in equal 48 end
of the month installment at 1.5% interest per month. Once the day he paid the 20th installment,
he decided to pay monthly payment. How much is his monthly payment?
A. P8,929.29
B. P8,225.00
C. P8,552.00
D. P8,008.20
668.
A man purchased a car with a cash price of P350,000. He was able to negotiate with the
seller to allow him to pay only a downpayment of 20% and the balance payable in equal 48 end
of the month installment at 1.5% interest per month. Once the day he paid the 20th installment,
he decided to pay monthly payment. What is the remaining balance that he paid?
A. P186,927.24
B. P188,225.00
C. P187,701.26
D. P185,900.20
669.
A company purchased for a cash price of P500,000.00 a machine which is estimated to
have a salvage value of P50,000.00 at the end of its 10 years economic life. How much yearly
deposit must the company deposit in a sinking fund that will pay 18% interest, compounded
yearly, to accumulate the needed fund to purchase the new machine at the end of the 10th year
economic life of the machine it purchased if a new machine will cost 75% more by that time?
A. P34,859.78
B. P35,890.12
C. P35,074.58
D. P34,074.85
670.
A car dealer advertises the sale of a car model for a cash price of P280,000. If purchased
on installment, the regular downpayment is 15% and balance payable in 18 equal monthly
installments at an interest rate of 1.5% per month. How much will be required monthly
payments?
A. P15,185.78
B. P15,289.12
C. P15,783.90
D. P15,632.11
671.
A machinery supplier is offering a certain machinery on a 10% downpayment and the
balance payable in equal end of the year payments without interest for 2 years. Under this
arrangement, the price is pegged to be P250,000. However, for cash purchase, the machine
would only cost P195,000. What is the equivalent interest rate that is being charged on the 2year payment plan if interest is compounded quarterly?
A. 18.47%
B. 19.21%
C. 19.47%
D. 19.74%
672.
A company has approved a car plan for its six senior officers in which the company will
shoulder 25% of the cost and the difference payable by each officer to a financing company in
48 equal end of the month installments at an interest rate of 1.5% per month. If the cost of each
car is P350,000, determine the amount each officer has to pay the financing company per
month?
A. P7,523.90
B. P7,619.22
C. P7,190.00
D. P7,710.94
673.
If P10,000 is deposited each year for 9 years, how much annuity can a person get
annually from the bank every year for 8 years starting 1 year after the 9th deposit is made. Cost
of money is 14%.
A. P34,467.21
B. P34,567.81
C. P34,675.18
D. P34,867.37
674.
An employee is earning P12,000.00 a month and he can afford to purchase a car which
will require a downpayment of P10,000.00 and a monthly amortization of not more than 30% of
his monthly salary. What should be the maximum cash value of a car he can purchase if the
seller will agree to a downpayment of P10,000.00 and the balance payable in four years at 18%
per year payable on monthly basis? The first payment will be due at the end of the first month?
A. P135,267.21
B. P135,507.42
C. P135,605.48
D. P135,807.30
675.
A new company developed a program in which the employees will be allowed to
purchase shares of stocks of the company at the end of its fifth year of operation, when the
o pa s thought to ha e gai ed sta ilit al ead . The sto k has a pa alue of P100.00 per
share.
Believing in the good potential of the company, an employee decided to save in a bank the
amount of P8,000.00 at the end of every year which will earn for him 9% interest, compounded
annually.
How much shares of stocks will he be able to purchase at the end of the fifth year of his yearly
deposits?
A. 476
B. 478
C. 480
D. 482
676.
Mr. Juan dela Cruz borrows P100,000 at 10% compounded annually, agreeing to repay
the loan in twenty equal annual payments. How much of the original principal is still unpaid
after he has made the tenth payment?
A. P69,890.42
B. P72,000.80
C. P72,173.90
D. P72,311.44
677.
A debt of P12,000 with an interest of 20% compounded quarterly is to be amortized by
equal semi-annual payments over the next three years, the first due in 6 months. How much is
the semi-annual payments?
A. P2,775.50
B. P2,662.89
C. P2,590.04
D. P2,409.78
678.
A fund donated by a benefactor to PICE to provide annual scholarships to deserving CE
students. The fund will grant P5,000 for each of the first five years, P8,000 for the next five years
and P10,000 each year thereafter. The scholarship will start one year after the fund is
established. If the fund earns 8% interest, what is the amount of the donation?
A. P99,490.00
B. P99,507.35
C. P99,601.71
D. P99,723.54
679.
If a low cost house and lot worth P87,000 were offered at 10% downpayment and P500
per month for 25 years, what is the effective monthly interest rate on the diminishing balance?
A. 0.492%
B. 4.92%
C. 0.0492%
D. 49.2%
680.
The average annual cost of damages caused by floods at Dona Rosario Village located
along Butuanon river is estimated at P700,000. To build a gravity dam to protect the area from
the floods, would cost P2,500,000 and would involve an annual maintenance cost of P20,000.
With interest at 8% compounded annually, how many years will it take for the dam to pay for
itself?
A. 4.0 years
B. 4.5 years
C. 5.0 years
D. 5.5 years
681.
A businessman borrowed P10,000.00 from a bank at 12% interest, and paid P2,000.00
per annum for the first 4 years. What does he pay at the end of the fifth year in order to pay-off
the loan?
A. P6,812.54
B. P6,782.31
C. P6,917.72
D. P6,660.90
682.
Engr. Rodel Narito agreed to pay the loan he is borrowing from a development bank in
six annual end-of-the-year payments of P71,477.70. Interest is 18% per annum compounded
annually and is included in the yearly amount he will be paying the bank. How much money
Engr. Narito is borrowing from the bank?
A. P250,000
B. P260,000
C. P270,000
D. P280,000
683.
Rona wishes to purchase a 29-inch flat-screened colored TV at Bodega Appliance Center
an amount of P20,000.00. She made a downpayment of P5,000.00 and the balance payable in
24 equal monthly installments. If financing charge is 12% for each year computed on the total
balance to be paid by installment and interest rate 12%, how much would Rona pay every
month for the colored TV? What will be the actual cost of the money?
A. 36.71%
B. 36.21%
C. 35.89%
D. 35.23%
684.
Engr. Bacolongan of Main Engineering decided to purchase a machine which is to be
used for their refrigeration and airconditioning works at an amount of P1,200,000. The useful
life of the machine is estimated to be 5 years with a salvage value of P80,000 as based on
current prices. The average annual rate of inflation during the next 5 years will be 7%. The
machine will be replaced with a duplicate and the firm will accumulate the necessary capital by
making equal end-of-year deposits in a reserve fund that earns 6% per annum. Determine the
annual deposit.
A. P277,189.56
B. P278,664.54
C. P279,180.00
D. P280,673.12
685.
Engr. Bacolongan of Main Engineering decided to purchase a machine which is to be
used for their refrigeration and air-conditioning works at an amount of P1,200,000. The useful
life of the machine is estimated to be 5 years with a salvage value of P80,000 as based on
current prices. The average annual rate of inflation during the next 5 years will be 7%. The
machine will be replaced with a duplicate and the firm will accumulate the necessary capital by
making equal end-of-year deposits in a reserve fund. If money is worth 6% per annum,
determine the annual deposit.
A. P367,890.12
B. P366,062.33
C. P365,089.34
D. P364,890.43
686.
Because of the peso devaluation, a car costing P150,000 is to be purchased through a
finance company instead of paying cash. If the buyer is required to pay P40,000 as
downpayment and P4,000 each month for 4 years, what is the effective interest rate on the
diminishing balance?
A. 35.28%
B. 35.82%
C. 34.89%
D. 34.29%
687.
Engr. Edwin Astorga plans to purchase a new office building costing P1,000,000. He can
raise the building by issuing 10%, 20-year bond that would pay P150,000 interest per year and
repay the face amount at maturity. Instead of buying the new building, he can least it for
P140,000 per year, first payment being due one year from now. The building has an expected
life of 20 years. Ignoring effects on income tax, what is the difference between buying the
building and leasing the building?
A. P233,779.27
B. P233,070.12
C. P234,070.34
D. P234,560.12
688.
Triple J Construction Firm had put up for sale of some of their heavy equipments for
construction works. There were two interested buyers submitting their respective bids for the
heavy equipments. The bids are as follows:
Buyer A offers P10,000,000 payable 20% downpayment, the balance payable P1,000,000
annually for 8 years. Buyer B offers P9,000,000 payable P2,000,000 down payment, the balance
payable P500,000 semi-annually for 7 years.
How much is the difference between the two bids if money is worth 10% effective?
A. P346,520.05
B. P346,980.12
C. P347,019.45
D. P347,733.29
689.
Froyd Review & Training Center Inc. is expanding its school facilities starting 2001. The
program requires the following estimated expenditures:
P1,000,000 at the end of 2001
P1,200,000 at the end of 2002
P1,500,000 at the end of 2003
To accumulate the required funds, it establish a sinking fund constituting of 15 uniform annual
deposits, the first deposit has been made at the end of 1992. The interest rate of the fund is 2%
per annum. Calculate the annual deposit.
A. P217,520.05
B. P216,980.12
C. P217,679.01
D. P216,733.29
690.
Froyd Review & Training Center Inc. is expanding its school facilities starting 2001. The
program requires the following estimated expenditures:
P1,000,000 at the end of 2001
P1,200,000 at the end of 2002
P1,500,000 at the end of 2003
To accumulate the required funds, it establish a sinking fund constituting of 15 uniform annual
deposits, the first deposit has been made at the end of 1992. The interest rate of the fund is 2%
per annum. Calculate the balance in the fund on January 1, 2002.
A. P2,185,902.11
B. P2,195,600.03
C. P2,165,399.54
D. P2,175,380.00
691.
Padilla Pawnshop sells jewelries on either of the following arrangements:
Cash Price: Discount of 10% of the marked price

Installment: Downpayment of 20% of the marked price and the balance payable in equal annual
installments for the next 4 years.
If you are buying a necklace with a marked price of P5,000, how much is the difference between
buying in cash and buying in installment? Assume that money is worth 5%.
A. P40.76
B. P41.90
C. P43.54
D. P45.95
692.
Lim Bon Fing Y Hermanos Inc has offered for sale its two-storey building in the
commercial district of Cebu City. The building contains two stores on the ground floor and a
number of offices on the second floor.
A prospective buyer estimates that if he buys this property, he will hold it for about 10 years. He
estimates that the average receipts from the rental during this period to be P350,000.00 and the
average expenses for all purpose in connection with its ownership and operation (maintenance
and repairs, janitorial services, insurance, etc.) to be P135,000.00. He believes that the property
can be sold for a net of P2,000,000 at the end of the 10th year. If the rate of return on this type
of investment is 7%, determine the cash price of this property for the buyer to recover his
investment with a 7% return before income taxes.
A. P2,526,768.61
B. P2,490,156.34
C. P2,390,189.00
D. P2,230,120.56
693.
Bicol Hardware Inc is considering two alternative strategies for a new power tool.
According to Jun Ramos who is introducing the power tool, the new product will require an
outlay of P30,000 with a low price strategy. The product will generate cash proceeds of P20,000
per year and will have a life to two years. With a high price strategy, the product will generate
cash proceeds of P36,000 but will have a life of only one year. The cost of money for the
company is 10%. Determine the net present value of the low price strategy.
A. P34,389.12
B. P34,490.10
C. P34,518.89
D. P34,710.74
694.
Bicol Hardware Inc is considering two alternative strategies for a new power tool.
According to Jun Ramos who is introducing the power tool, the new product will require an
outlay of P30,000 with a low price strategy. The product will generate cash proceeds of P20,000
per year and will have a life to two years. With a high price strategy, the product will generate
cash proceeds of P36,000 but will have a life of only one year. The cost of money for the
company is 10%. Determine the net present value of the high price strategy.
A. P32,727.27
B. P33,737.34
C. P33,747.20
D. P33,757.89
695.
John Smith plans to purchase a new house costing P1,000,000. He can raise the building
by issuing a 10%, 20 year old bond that would pay P150,000 interest per year and repay the face
amount at maturity. Instead of buying the new house, Jan Michael has an option of leasing it for
P140,000 per year, the first payment due one year from now. The building has an expected life
of 20 years. If interest charge for leasing is 12%, which of the following is true?
A. Lease is more economical than borrow and buy.
B. Lease has same result with borrow and buy.
C. Borrow and buy is half the value than lease.
D. Borrow and buy is economical by almost a hundred thousand than lease.
696.
Engr. Edward Zuela is considering establishing his own business. An investment of
P100,000 will be required which must be recovered in 15 years. It is estimated that sales will be
P150,000 per year and that annual operating expenses will be as follows:
Materials
P40,000
Labor
P70,000
Overhead
P10,000 + 10% of sales
Selling expenses
P5,000
Engr. Zuela will give up his regular job paying P15,000 per year and devote full time to the
operation of the business. This will result in decreasing labor cost by P10,000 per year, material
cost by P7,000 per year and overhead cost by P8,000 per year. If he expects to earn at least 20%
of his capital, is investing in this business a sound idea?
A. Yes, it is a sound idea
B. No, it is not a sound idea
C. Neither yes nor no because it simply breakeven
D. It depends on the current demand of the market.
697.
A housewife bought a brand new washing machine costing P12,000 if paid in cash.
However, she can purchase it on installment basis to be paid within 5 years. If money is worth
8% compounded annually, what is her yearly amortization if all payments are to be made at the
beginning of each year?
A. P2,617.65
B. P2,782.93
C. P2,890.13
D. P2,589.90
698.
A Civil Engineering student borrowed P2,000.00 to meet college expenses during his
senior year. He promised to repay the loan with interest at 4.5% in 10 equal semi-annual
installments, the first payment to be made 3 years after the date of the loan. How much will this
payment be?
A. P252.12
B. P261.89
C. P273.90
D. P280.94
699.
A fathe ishes to p o ide P ,
fo his so o his so s st i thda . Ho
u h
should he deposit every 6 months in a savings account which pays 3% compounded semiannually, if the first deposit was made when the son was 3 years old?
A. P829.68
B. P815.80
C. P830.12
D. P846.10
700.
A group of Filipino Mechanical Engineers formed a corporation and the opportunity to
invest P8,000,000 in either of the two situations. The first is to expand a domestic operation. It is
estimated that this investment would return a net year end cash flow of P2,000,000 each year
for 10 years and at the end of that time, the physical assets, which would no longer be needed,
could be sold at P5,000,000. The alternative opportunity would involve building and operating a
plant in a foreign country. This operation would involve no net cash flow during the first 3 years,
but it is believed that, beginning with the end of the fourth year, an annual flow of P4,000,000
would be received, running through the end of the 10th year. After that time, it is believed that
the operation and facilities might be expropriated, with little, if any, compensation, being paid.
Which of the following is true?
A. Foreign operation yields bigger rate of return.
B. Domestic and foreign operations yield the same rate of return.
C. Domestic operation has double the rate of return of the foreign operation.
D. Foreign operation yields approximately 3% less rate of return than domestic operation.
701.
A house costs P400,000 cash. A purchaser will pay P90,000 cash, P60,000 at the end of 2
years and a sequence of 6 equal annual payments starting with one at the end of 4 years, to
discharge all his liabilities as to the principal and interest at 7% compounded annually. Find the
annual payment which must be made for 6 years.
A. P66,204.14
B. P65,701.67
C. P67,901.34
D. P68,900.12
702.
Two years ago, the rental for the use of equipment and facilities as paid 5 years in
advance, with option to renew the rent for another years by payment of P15,000 annually at the
start of each year for the renewal period. Now, the lessor asks the lessee if it could be possible
to prepay the rental that will be paid annually in the renewed 5 years period. If the lessee will
consider the request, what would be the fair prepayment to be made to the lessor if interest is
now figured at 8 %?
A. P51,843.90
B. P51,346.58
C. P52,002.45
D. P52,740.20
703.
NSN Builders plans to construct an additional building at the end of 10 years for an
estimated cost of P5,000,000.00. To accumulate the amount, it will have equal year end
deposits in a fund earning 13%. However, at the end of the 5th year, it was decided to have a
larger building that originally intended to an estimated cost of P8,000,000.00. What should be
the annual deposit for the last 5 years?
A. P734,391.48
B. P742,890.10
C. P738,900.45
D. P740,010.86
704.
The quantity of a certain commodity that is offered for sale at a certain price at a given
place and time.
A. Demand
B. Supply
C. Stocks
D. Goods
705.
Work-in process is classified as:
A. An asset
B. A liability
C. An expenses
D. A o e s e uit
706.
What is the highest position in the corporation?
A. President
B. Board of Directors
C. Chairman of the Board
D. Stockholders
707.
Type of ownership in business where individuals exercise and enjoy the right in their
own interest.
A. Equitable
B. Public
C. Private
D. Pure
708.
Decrease in the value of a physical property due to the passage of time.
A. Inflation
B. Depletion
C. Recession
D. Depreciation
709.
An association of two or more individuals for the purpose of operating a business as coowners for profit
B. Company
C. Partnership
D. Corporation
710.
We may classify an interest rate, which specifies the actual rate of interest on the
principal for one year as:
A. Nominal rate
B. Rate of return
C. Exact interest rate
D. Effective rate
711.
It is defined to be the capacity of a commodity to satisfy human want.
A. Discount
B. Luxury
C. Necessity
D. Utility
712.
It is the amount which a willing buyer will pay to a willing seller for a property where
each has equal advantage and is under no compulsion to buy or sell.
A. Fair value
B. Market value
C. Book value
D. Salvage value
713.
B. Oligopoly
C. Monopoly
D. Elastic demand
714.
These are products or services that are desired by human and will be purchased if
money is available after the required necessities have been obtained.
A. Utilities
B. Necessities
C. Luxuries
D. Products, goods and services
715.
These are products or services that are required to support human life and activities,
that will be purchased in somewhat the same quantity even though the price varies
considerably.
A. Utilities
B. Necessities
C. Luxuries
D. Products, goods and services
716.
A condition where only few individuals produce a certain product and that any action of
one will lead to almost the same action of the others.
A. Oligopoly
B. Semi-monopoly
C. Monopoly
717.
Grand total of the assets and operational capability of a corporation.
A. Authorized capital
B. Investment
C. Subscribed capital
D. Money market
718.
The worth of the property equals to the original cost less depreciation.
A. Scrap value
B. Face value
C. Market value
D. Book value
719.
Money paid for the use of borrowed capital.
A. Discount
B. Credit
C. Interest
D. Profit
720.
Liquid assets such as cash, and other assets that can be converted quickly into cash,
such as accounts receivable and merchandise are called:
A. Total assets
B. Fixed assets
C. Current assets
D. None of the above
721.
The length of time which the property may be considered at a profit.
A. Physical life
B. Economic life
C. Operating life
D. All of the above
722.
The provision in the contract that indicates the possible adjustment of material cost and
labor cost.
A. Secondary cause
B. Escalatory clause
C. Contingency clause
D. Main clause
723.
The present worth of all depreciation over the economic life of the item is called
A. Book value
B. Capital recovery
C. Depreciation recovery
D. Sinking fund
724.
Gross profit, sales less cost of goods sold, as a percentage of sales is called:
A. Profit margin
B. Gross margin
C. Net income
D. Rate of return
725.
Worth of the property as shown in the accounting records of an enterprise.
A. Fair value
B. Market value
C. Salvage value
D. Book value
726.
Those funds that are required to make the enterprise or project a going concern.
A. Initial investment
B. Current accounts
C. Working capital
D. Subscribed capital
727.
A market situation where there is only one seller with many buyer.
A. Monopoly
B. Monopsony
C. Oligopoly
D. Oligopsony
728.
A market situation where there are few sellers and few buyers.
A. Oligopoly
B. Oligopsony
C. Bilateral oligopoly
D. Bilateral oligopsony
729.
A market situation where there is one seller and one buyer.
A. Monopoly
B. Monopsony
C. Bilateral monopoly
D. Bilateral monopsony
730.
A market situation where there are only two buyers with many sellers.
A. Duopoly
B. Oligopoly
C. Duopsony
D. Oligopsony
731.
The cumulative effect of elapsed time on the money value of an event, based on the
earning power of equivalent invested funds capital should or will learn.
A. Present worth factor
B. Interest rate
C. Time value of money
D. Yield
732.
Defined as the future value minus the present value.
A. Interest
B. Rate of return
C. Discount
D. Capital
733.
The flow back of profit plus depreciation from a given project is called:
A. Capital recovery
B. Cash flow
C. Economic return
D. Earning value
734.
An investment consisting of deposits of P1,000, P1,500 and P2,000 are made at the end
of the 2nd year, 3rd year and 4th year, respectively. If money is worth 10%, what is the
equivalent present worth of the investment?
A. P3,129.89
B. P3,319.45
C. P3,372.12
D. P3,490.09
735.
Miss Marcial deposited P1,000, P1,500 and P2,000 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. P4,880.00
B. P4,820.00
C. P4,860.00
D. P4,840.00
736.
Miss Santos deposited P1,000, P1,500 and P2,000 at the end of the 2nd year, 3rd year
and 4th year, respectively in a savings account which earned 10% per annum. What is the
equivalent uniform deposit for the uniform gradient only?
A. P670.81
B. P690.58
C. P660.53
D. P680.12
737.
An amortization of a debt is in a form of a gradient series of P5,000 on the first years,
P4,500 on the second year, P4,000 on the third year and P3,500 on the fourth year. What is the
equivalent present worth of the debt if interest is 5%?
A. P15,093.28
B. P15,178.34
C. P15,890.12
D. P15,389.82
738.
P4,500 on the second year, P4,000 on the third year, P3,500 on the fourth year. Determine
future amount of the amortization if interest is 5%.
A. P18,030.56
B. P18,290.12
C. P18,621.89
D. P18,449.37
739.
P4,500 on the second year, P4,000 on the third year, P3,500 on the fourth year. What is the
equivalent uniform periodic payment if interest is 5%?
A. P4,280.47
B. P4,378.17
C. P4,259.68
D. P4,325.12
740.
An NBA Basketball superstar, playing for Los Angeles Lakers is earning an average annual
salary of $5,000,000 for 10 years. Chicago Bulls ball club would like to acquire his services as a
replacement of the retired Michael Jordan, offered him an initial annual salary of $3,000,000 but
is increasing at the rate of $400,000 annually. If he can still play in the NBA for 10 years and
money is worth 10%, which one is true?
A. Chi ago Bulls offe is s alle tha that of LA Lake s
B. Chi ago Bulls offe is e a tl the sa e as LA Lake s
C. Chicago Bulls offe is just fe dolla s o e pe ea tha that of LA Lake s
D. Chi ago Bulls offe is o e $
,
pe ea tha that of LA Lake s
741.
John Grisham, author of the best-selli g o el The Cha e sold its op ight to
Warner Bros. fo the ights to ake it i to a otio pi tu e. M . G isha s has optio s et ee
the following Warner Bros. proposals:
A. An immediate lump sum payment of $5,000,000.
B. A i itial pa e t of $ ,
,
plus % of the o ies g oss e eipts fo the e t 5 years
which is forecasted as follows:
End of year
Gross receipt
4% of Gross Receipt
$10,000,000.00
$400,000.00
$8,000,000.00
$320,000.00
$6,000,000.00
$240,000.00
$4,000,000.00
$160,000.00
$2,000,000.00
$80,000.00
If money is worth 10% and Mr. Grisham will not receive any royalty after the fifth year of
exhibition of the movie, by how much is proposal A bigger than proposal B?
A. P1,532,630
B. P1,390,090
C. P1,478,100
D. P1,289,450
742.
Two sisters, Joan and Jocelyn decided to save money in funds that earns 14%
compounded annually but on different ways. Joan decided to save by making an end-of-year
deposit of P1,000 on the first year, P1,100 on the second year, P1,210 on the third year and so
on increasing the e t ea s deposit
% of the deposit i the p e edi g ea u til the e d
of the 10th year. Jocelyn decided to save by just making an equal deposit of P1,400 annually for
10 years. Who has more savings at the end of 10 years and by how much bigger compared to
the other sister?
A. Jocelyn, P671.18
B. Jocelyn, P763.27
C. Joan, P671.18
D. Joan, P763.27
743.
Engr. Maragat, believing that life begins at 40, decided to retire and start enjoying life at
age 40. He wishes to have upon his retirement the sum of P5,000,000. On his 21st birthday, he
deposited a certain amount and increased his deposit by 15% each year until he will be 40. If the
money is deposited in a super savings account which earns 15% interest compounded annually,
how much was his initial deposit?
A. P17,253.18
B. P17,566.33
C. P17,672.77
D. P17,490.21
744.
A newly-acquired equipment requires an annual maintenance costs of P10,000. If the
annual maintenance cost is increased by 20% each year every year for 10 years, what is the
estimated present worth of the maintenance costs if money is worth 15%?
A. P105,712.33
B. P106,101.37
C. P107,490.12
D. P108,890.11
745.
obligations to financial contributors or claims of other based on profit.
A. Economic return
B. Yield
C. Earning value
D. Expected yield
746.
The payment for the use of borrowed money is called:
A. Loan
B. Maturity value
C. Interest
D. Principal
747.
The interest rate at which the present work of the cash flow on a project is zero of the
interest earned by an investment.
A. Effective rate
B. Nominal rate
C. Rate of return
D. Yield
748.
The ratio of the interest payment to the principal for a given unit of time and usually
expressed as a percentage of the principal.
A. Interest
B. Interest rate
C. Investment
D. All of the above
749.
The true value of interest rate computed by equations for compound interest for a 1
year period is known as:
A. Expected return
B. Interest
C. Nominal interest
D. Effective interest
750.
The intangible item of value from the exclusive right of a company to provide a specific
product or service in a stated region of the country.
A. Market value
B. Book value
C. Goodwill value
D. Franchise value
751.
The recorded current value of an asset is known as:
A. Scrap value
B. Salvage value
C. Book value
D. Present worth
752.
Scrap value of an asset is sometimes known as:
A. Book value
B. Salvage value
C. Replacement value
D. Future value
753.
What is sometimes called second-hand value?
A. Scrap value
B. Salvage value
C. Book value
D. Going value
754.
An intangible value which is actually operating concern has due to its operation.
A. Book value
B. Fair value
C. Goodwill value
D. Going value
755.
A company issued 50 bonds of P1,000.00 face value each, redeemable at par at the end
of 15 years. To accumulate the funds required for redemption the firm established a sinking
fund consisting of annual deposits, the interest rate of the fund being 4%. What was the
principal in the fund at the end of the 12th year?
A. P37,002.54
B. P37,520.34
C. P38,010.23
D. P38,782.34
756.
A local firm is establishing a sinking fund for the purpose of accumulating a sufficient
capital to retire its outstanding bonds at maturity. The bonds are redeemable in 10 years and
their maturity value is P150,000.00. How much should be deposited each year if the fund pays
interest at the rate of 3%?
A. P13,084.58
B. P13,048.85
C. P13,408.58
D. P13,480.58
757.
A P1,000,000 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%
758.
A man was offered a Land Bank certificate with a face value of P100,000 which is
bearing interest of 6% per year payable semiannually and due in 6 years. If he wants to earn 8%
semiannually, how much must he pay the certificate?
A. P90,123.09
B. P90,614.93
C. P90,590.12
D. P90,333.25
759.
A P1,000 bond which will mature in 10 years and with a bond rate of 8% payable
annually is to be redeemed at par at the end of this period. It is sold at P1,030. Determine the
yield at this price.
A. 7.56%
B. 7.65%
C. 7.75%
D. 7.86%
760.
You purchase a bond at P5,100. The bond pays P200 per year. It is redeemable for
P5,050 at the end of 10 years. What is the net rate of interest on your investment?
A. 3.56%
B. 3.85%
C. 3.75%
D. 3.68%
761.
A P1,000, 6% bond pays dividend semiannually and will be redeemed at 110% on June
21, 2004. It is bought on June 21, 2001 to yield 4% interest. Find the price of the bond.
A. P1,122.70
B. P1,144.81
C. P1,133.78
D. P1,155.06
762.
The value which a disinterested third party, different from the buyer and seller, will
determine in order to establish a price acceptable to both parties.
A. Market value
B. Goodwill value
C. Fair value
D. Franchise value
763.
A type of annuity where the payments are made at the end of each payment period
starting from the first period.
A. Ordinary annuity
B. Annuity due
C. Deferred annuity
D. Perpetuity
764.
It is a series of equal payments occurring at equal intervals of time where the first
payment is made after several periods, after the beginning of the payment.
A. Deferred annuity
B. Delayed annuity
C. Progressive annuity
D. Simple annuity
765.
A type of annuity where the payments are made at the start of each period, beginning
from the first period.
A. Ordinary annuity
B. Annuity due
C. Deferred annuity
D. Perpetuity
766.
Which is NOT an essential element of an ordinary annuity?
C. The first payment is made at the beginning of each period.
767.
A is a periodic payment and I is the interest rate, then present worth of a perpetuity =
A. Ai
B. Ain
C. An/i
D. A/i
768.
A mathematical expression also known as the present value of an annuity of 1 is called
A. Load factor
B. Demand factor
C. Sinking fund factor
D. Present worth factor
769.
As applied to a capitalized asset, the distribution of the initial cost by a periodic changes
to operation as in depreciation or the reduction of a debt by either periodic or irregular
prearranged program is called
A. Annuity
B. Capital recovery
C. Annuity factor
D. Amortization
770.
The reduction of the value of an asset due to constant use and passage of time.
A. Scrap value
B. Depletion
C. Depreciation
D. Book value
771.
A method of computing depreciation in which the annual charge is a fixed percentage of
the depreciated book value at the beginning of the year which the depreciation applies.
C. SYD method
772.
A VOM has a selling price of P400. 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. P222.67
B. P212.90
C. P236.20
D. P231.56
773.
A machine costs P8,000 and an estimated life of 10 years with a salvage value of P500.
What is its book value after 8 years using straight line method?
A. P2,000.00
B. P2,100.00
C. P2,200.00
D. P2,300.00
774.
A telephone company purchased a microwave radio equipment for P6 million, freight
and installation charges amounted to 4% of the purchased price. If the equipment will be
depreciated over a period of 10 years with a salvage value of 8%, determine the depreciation
cost during the 5th year using SYD.
A. P626,269.09
B. P623,209.09
C. P625,129.09
D. P624,069.89
775.
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 years
B. 8 years
C. 9 years
D. 10 years
776.
A company purchases an asset for P10,000.00 and plans to keep it for 20 years. If the
salvage value is zero at the end of the 20th year, what is the depreciation in the third year? Use
SYD method.
A. P857.14
B. P862.19
C. P871.11
D. P880.00
777.
An asset is purchased for P500,000.00. The salvage value in 25 years is P100,000.00.
What is the total depreciation in the first three years using straight-line method?
A. P45,000.00
B. P46,000.00
C. P47,000.00
D. P48,000.00
778.
A machine has an initial cost of P50,000 and a salvage value of P10,000 after 10 years.
What is the book value after 5 years using straight line depreciation?
A. P30,000.00
B. P31,000.00
C. P30,500.00
D. P31,500.00
779.
sold for P1,000.00. Find the book value during the first year if SYD depreciation is used.
A. P7,545.45
B. P7,320.11
C. P7,490.00
D. P7,690.12
780.
The cost of equipment is P500,000 and the cost of installation is P30,000. If the salvage
value is 10% of the cost of equipment at the end of years, determine the book value at the end
of the fourth year. Use straight-line method.
A. P146,320.50
B. P146,000.00
C. P146,230.50
D. P146,023.50
781.
sold for P12,000.00. Find the depreciation for the first year using SYD method.
A. P1,545.45
B. P1,454.54
C. P1,344.21
D. P1,245.45
782.
A machine has an initial cost of P50,000 and a salvage value of P10,000 after 10 years.
Find the book value after 5 years using straight-line depreciation.
A. P31,000.00
B. P31,500.00
C. P30,000.00
D. P30,500.00
783.
years. What is the straight line method depreciation rate as a percentage of the initial cost?
A. 10%
B. 8%
C. 7%
D. 9%
784.
A machine costing P45,000 is estimated to have a book value of P4,350 when retired at
the end of 6 years. Depreciation cost is computed using a constant percentage of the declining
book value. What is the annual rate of depreciation in %?
A. 32.50%
B. 32.25%
C. 32.00%
D. 32.75%
785.
An asset is purchased for P120,000.00. Its estimated life is 10 years, after which it will be
sold for P12,000.00. Find the depreciation for the second year using the sum-of- ea s digit
method.
A. P17,578.13
B. P17,412.43
C. P17,344.67
D. P17,672.73
786.
A machine costing P720,000 is estimated to have a book value of P40,545.73 when
retired at the end of 10 years. Depreciation cost is computed using a constant percentage of the
declining book value. What is the annual rate of depreciation in %?
A. 25%
B. 26%
C. 27%
D. 28%
787.
will be sold for P1,000.00. Find the depreciation in the first three years using straight line
method.
A. P2,400.00
B. P2,412.34
C. P2,250.00
D. P2,450.00
788.
An engineer bought an equipment for P500,000. He spent an additional amount of
P30,000 for installation and other expenses. The estimated useful life of the equipment is 10
years. The salvage value is x% of the first cost. Using the straight line method of depreciation,
the book value at the end of 5 years will be P291,500. What is the value of x?
A. 0.2
B. 0.4
C. 0.3
D. 0.1
789.
The initial cost of a paint sand mill, including its installation, is P800,000. The BIR
approved life of this machine is 10 years for depreciation. The estimated salvage value of the
mill is P50,000 and the cost of dismantling is estimated to be P15,000. Using straight-line
depreciation, what is the annual depreciation charge?
A. P75,500.00
B. P76,000.00
C. P76,500.00
D. P77,000.00
790.
The initial cost of a paint sand mill, including its installation, is P800,000. The BIR
approved life of this machine is 10 years for depreciation. The estimated salvage value of the
mill is P50,000 and the cost of dismantling is estimated to be P15,000. Using straight-line
depreciation, what is the book value of the machine at the end of six years?
A. P341,000.00
B. P343,000.00
C. P340,000.00
D. P342,000.00
791.
A unit of welding machine cost P45,000 with an estimated life of 5 years. Its salvage
value is P2,500. Find its depreciation rate by straight-line method.
A. 18.89%
B. 19.21%
C. 19.58%
D. 19.89%
792.
A tax and duty free importation of a 30 hp sandmill for paint manufacturing cost
P360,000.00. Bank charges arrastre and brokerage cost P5,000.00. Foundation and installation
costs were P25,000.00. Other incidental expenses amount to P20,000.00. Salvage value of the
mill is estimated to be P60,000 after 20 years. Find the appraisal value of the mill using straight
line depreciation at the end of 10 years.
A. P234,000.00
B. P235,000.00
C. P234,500.00
D. P235,500.00
793.
An equipment costs P10,000 with a salvage value of P500 at the end of 10 years.
Calculate the annual depreciation cost by sinking-fund method at 4% interest.
A. P791.26
B. P792.61
C. P726.17
D. P771.26
794.
A machine initially worth P50,000 depreciates in value each year by 20% of its value at
the beginning of that year. Find its book value when it is 9 years old.
A. P6,710.89
B. P6,400.89
C. P6,666.89
D. P6,512.78
795.
A consortium of international telecommunications companies contracted for the
purchase and installation of fiber optic cable linking Manila City and Cebu City at a total cost of
P960 million. This amount includes freight and installation charges estimated at 10% of the
above total contract price. If the cable shall be depreciated over a period of 15 years with zero
salvage value and money is worth 6% per annum, what is the annual depreciation charge?
A. P41,044,903.40
B. P41,211,158.40
C. P41,254,000.40
D. P41,244,253.40
796.
will be sold for P1,000.00. Find the depreciation in the first three years using sum-of- ea s digit
method.
A. P3,279.27
B. P3,927.27
C. P3,729.27
D. P3,792.72
797.
A radio service panel truck initially cost P560,000. Its resale value at the end of the 5th
year of the useful life is estimated at P150,000. By means of declining balance method,
determine the depreciation charge for the second year.
A. P99,658.41
B. P99,128.45
C. P99,290.00
D. P99,378.45
798.
Shell Philippines, a multinational company, has a total gross income for a particular year
of P50,000,000. The taxable income after taking all deductions except for depletion is
P18,500,000. What is the allowable depletion allowance for that particular year? Take
percentage of gross income for oil as 22%.
A. P9,358.41
B. P9,228.45
C. P9,250.00
D. P9,308.45
799.
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. $500,000,000
B. $510,000,000
C. $525,000,000
D. $550,000,000
800.
The first cost of a certain equipment is P324,000 and a salvage value of P50,000 at the
end of its life of 4 years. If money is worth 6% compounded annually, find the capitalized cost.
A. P540,090.34
B. P541,033.66
C. P540,589.12
D. P541,320.99
801.
An item is purchased for P100,000. Annual cost is P18,000. Using interest rate of 8%,
what is the capitalized cost of perpetual service?
A. P310,000
B. P315,000
C. P320,000
D. P325,000
802.
A corporation uses a type of motor which costs P5,000 with 2 life years and final salvage
value of P800. How much could the corporation afford to pay for another type of motor of the
same purpose whose life is 3 years a with a final salvage value of P1,000. Money is worth 4%.
A. P7,892.13
B. P7,157.40
C. P7,489.21
D. P7,300.12
803.
A motorcycle costs P50,000 and has an expected life of 10 years. The salvage value is
estimated to be P2,000 and annual operating cost is estimated at P1,000. What is the
appropriate rate of return on the investment if the annual revenue is P10,000?
A. 12.12%
B. 12.54%
C. 12.72%
D. 12.99%
804.
At 6%, find the capitalized cost of a bridge whose cost is P250M and life is 20 years, if
the bridge must be partially rebuilt at a cost of P100M at the end of each 20 years.
A. P297,308,323.10
B. P298,308,323.10
C. P296,308,323.10
D. P295,308,323.10
805.
A new broiler was installed by a textile plant at a total cost of P300,000 and projected to
have a useful life of 15 years. At the end of its useful life, it is estimated to have a salvage value
of P30,000. Determine its capitalized cost if interest is 18% compounded annually.
A. P323,500.33
B. P322,549.33
C. P332,509.33
D. P341,240.33
806.
A man planned of building a house. The cost of construction is P500,000 while annual
maintenance cost is estimated at P10,000. If the interest rate is 6%, what is the capitalized cost
of the house?
A. P666,000.00
B. P666,666.67
C. P633,333.33
D. P650,000.00
807.
An untreated electrical wooden pole that will last 10 years under a certain soil
condition, costs P1,200.00. If a treated pole will last for 20 years, what is the maximum
justifiable amount that can be paid for the treated pole, if the maximum return on investment is
12%. Consider annual taxes and insurance amount to be 1% of the first cost.
A. P1,612.01
B. P1,559.50
C. P1,789.23
D. P1,409.38
808.
A granite quarry purchased for P1,600,000 is expected to be exhausted at the end of 4
years. If the resale value of the land is P100,000, what annual income is required to yield an
investment rate of 12%? Use a sinking fund rate of 3%.
A. P550,540.57
B. P551,540.57
C. P552,540.57
D. P553,540.57
809.
A manufacturer produces certain items at a labor cost per unit of P315, material cost
per unit is P100, variable cost of P3.00 each. If the item has a selling price of P995, how many
units must be manufactured each month for the manufacturer to breakeven if the monthly
overhead is P461,600?
A. 782
B. 800
C. 806
D. 812
810.
The annual maintenance cost of a machine shop is P69,994. If the cost of making a
forging is P56 per unit and its selling price is P135 per forged unit, find the number of units to be
forged to break-even.
A. 892
B. 870
C. 886
D. 862
811.
A manufacturer produces certain items at a labor cost of P115 each, material cost of P76
each and variable cost of P2.32 each. If the item has a unit price of P600, 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
812.
Steel drum manufacturer incurs a yearly fixed operating cost of $200,000. Each drum
a ufa tu ed ost $
to p odu e a d sells $
. What is the a ufa tu e s eak-even sales
volume in drums per year?
A. 5,031
B. 5,017
C. 5,043
D. 5,000
813.
XYZ Corporation manufactures bookcases that sell for P65.00 each. It costs XYZ
corporation P35,000 per year to operate its plant. This sum includes rent, depreciation charges
on equipment, and salary payments. If the cost to produce one bookcase is P50.00, how many
cases must be sold each year for XYZ to avoid taking a loss?
A. 2,334
B. 2,443
C. 2,223
D. 2,322
814.
A company which manufactures electric motors has a production capacity of 200 motors
a month. The variable costs are P150.00 per motor. The average selling price of the motors is
P275.00. Fixed costs of the company amount to P20,000 per month which includes taxes. Find
the number of motors that must be sold each month to breakeven.
A. 160
B. 157
C. 153
D. 163
815.
The annual maintenance cost of a machine is P70,000. If the cost of making a forging is
P56 and its selling price is P125 per forged unit. Find the number of units to be forged to
breakeven.
A. 1,000
B. 1,012
C. 1,015
D. 1,018
816.
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 hours per unit
B. 1.2 hours per unit
C. 1.4 hours per unit
D. 1.6 hours per unit
817.
Compute the number of blocks that an ice plant must be able to sell per month to break
even based on the following data:
Cost of electricity per block - P20.00
Tax to be paid per block - P2.00
Real Estate Tax - P3,500.00 per month
Salaries and Wages - P25,000.00 per month
Others - P12,000.00 per month
Selling price of ice - P55.00 per block
A. 1,220
B. 1,224
C. 1,228
D. 1,302
818.
JRT Industries manufactures automatic voltage regulators at a labor cost of P85.00 per
unit and material cost of P350.00 per unit. The fixed charges on the business are P15,000 per
month and the variable costs are P20.00 per unit. If the automatic voltage regulators are sold to
retailers at P580.00 each, how many units must be produced and sold per month to breakeven?
A. 120
B. 124
C. 128
D. 130
819.
General Electric Company which manufactures electric motor has a capacity of
producing 150 motors a month. The variable costs are P4,000.00 per month, the average selling
price of the motor is P750.00 per motor. Fixed costs of the company amount to P78,000.00 per
month which includes all taxes. Determine the number of motors to be produced per month to
breakeven.
A. 100
B. 104
C. 110
D. 112
820.
A telephone switchboard 100 pair cable can be made up with either enamelled wire or
tinned wire. There will be 400 soldered connections. The cost of soldering a connection on the
enamelled wire will be P1.65, on the tinned wire, it will be P1.15. A 100-pair cable made up with
enamelled wire cost P0.55 per linear foot and those made up of tinned wire cost P0.75 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
821.
A local factory assembling calculators produces 400 units per month and sells them at
P1,800 each. Dividends are 8% on the 8,000 shares with par value of P250 each. The fixed
operating cost per month is P25,000. Other costs are P1,000 per unit. If 200 units were
produced a month, determine the profit or loss.
A. Profit of P121,666.67
B. Profit of P21,666.67
C. Loss of P121,666.67
D. Loss of P21,666.67
822.
Nike shoes manufacturer produces a pair of Air Jordan Shoes at a labor cost of P900.00
a pair and a material cost of P800.00 a pair. The fixed charges on the business are P5,000,000 a
month and the variable costs are P400.00 a pair. Royalty to Michael Jordan is P1,000 per pair of
shoes sold. If the shoes sell at P5,000 a pair, how many pairs must be produced each month for
the manufacturer to breakeven?
A. 2,590
B. 2,632
C. 2,712
D. 2,890
823.
In a steel fabrication shop located somewhere in Cebu, various size rivet holes must be
made in structural members. This may be done by laying out the position of the hole on the
members and using a drill press for this method, a machinist wage rate is P20.25 per hour and
he can drill 27 holes per hour. An alternative method is by the use of the multiple punch
machine. In this process, the machinist wage rate is P20.00 per hour and he can complete 8
holes per minute. This method requires P0.50 per holes to set the multiple punch machine and
an installation cost of P2,000.00. If all other costs are the same, for what number of rivet holes
will the multiple punch machine pay for itself?
A. 9,601
B. 9,592
C. 9,581
D. 9,566
824.
A new civil engineer produces a certain construction material at a labor cost of P16.20
per piece, material cost of P38.50 per piece and variable cost of P7.40 per piece. The fixed
charge on the business is P100,000.00 per month. If he sells the finished product at P95.00 each,
how many pieces must be manufactured in each month to breakeven?
A. 3,045
B. 3,035
C. 3,030
D. 3,040
825.
The Asian Transmission Co. makes and sells certain automotive parts. Present sales
volume is 500,000 units per year at a selling price of fifty centavos (P0.50) per unit. Fixed
expenses total P80,000.00 per year. What is the present total profit for a year?
A. P168,000
B. P170,000
C. P172,000
D. P174,000
826.
The Asian Transmission Co. makes and sells certain automotive parts. Present sales
volume is 500,000 units per year at a selling price of fifty centavos (P0.50) per unit. Fixed
expenses total P80,000.00 per year. What is the present breakeven point in units?
A. 160,000
B. 162,000
C. 165,000
D. 170,000
827.
A factory engaged in the fabrication of an automobile part with a production capacity of
700,000 units per year is only operating at 62% of capacity due to unavailability of the necessary
foreign currency to finance the importation of their raw materials. The annual income is
P430,000.00. Annual fixed costs are P190,000.00 and the variable costs are P0.348 per unit.
What is the current profit or loss?
A. P87,450
B. P88,960
C. P88,450
D. P87,960
828.
A factory engaged in the fabrication of an automobile part with a production capacity of
700,000 units per year is only operating at 62% of capacity due to unavailability of the necessary
foreign currency to finance the importation of their raw materials. The annual income is
P430,000.00. Annual fixed costs are P190,000.00 and the variable costs are P0.348 per unit.
What is the breakeven point?
A. 294,560
B. 291,000
C. 290,780
D. 295,490
829.
A certain firm has the capacity to produce 650,000 units of product per year. At present,
it is ope ati g at % apa it . The fi s annual income is P4,160,000.00. Annual fixed costs are
P ,
,
. a d the a ia le osts a e e ual to P . pe u it of p odu t. What is the fi s
annual profit or loss?
A. P814,320
B. P815,230
C. P816,567
D. P817,239
830.
A certain firm has the capacity to produce 650,000 units of product per year. At present,
it is ope ati g at % apa it . The fi s a ual i o e is P ,
,
. . A ual fi ed osts a e
P1,920,000.00 and the variable costs are equal to P3.56 per unit of product. What volume of
sales does the firm breakeven?
A. P3,354,680
B. P3,534,880
C. P3,155,690
D. P3,254,680
831.
A small shop in Bulacan fabricates threshers for palay producers in the locality. The shop
can produce each thresher at a labor cost of P1,800.00. The cost of materials for each unit is
P2,500.00. The variable costs amounts to P650.00 per unit while fixed charges incurred per
annum totals P69,000.00. If the portable threshers are sold at P7,800.00 per unit, how many
units must be produced and sold per annum to breakeven?
A. 28
B. 25
C. 26
D. 27
832.
The direct labor cost and material cost of a certain product are P300 and P400 per unit,
respectively. Fixed charges are P100,000 per month and other variable costs are P100 per unit. If
the product is sold at P1,200 per unit, how many units must be produced and sold to
breakeven?
A. 280
B. 250
C. 260
D. 270
833.
The following data for year 2000 are available for Cagayan Automotive Company which
manufactures and sells a single automotive product line:
Unit selling price - P40.00
Unit variable cost - P20.00
Unit contribution margin - P20.00
Total fixed costs - P200,000.00
What is the breakeven point in units for the current year?
A. 10,000
B. 10,100
C. 10,050
D. 10,200
834.
The cost of producing a small transistor radio set consists of P230.00 for labor and
P370.00 for material. The fixed charges is operating the plant is P1,000,000.00 per month. The
variable cost is P10.00 per set. The radio set can be sold for P750.00 each. Determine how many
sets must be produced per month to breakeven.
A. 7,123
B. 7,133
C. 7,143
D. 7,153
835.
An item which can be sold for P63.00 per unit wholesale is being produced with the
following cost data:
Labor cost - P10.00 per unit
Material cost - P15.00 per unit
Fixed charges - P10,000.00
Variable cost - P8.00 per unit
What is the breakeven point sales volume if one out of every 10 units produced is defective and
is rejected with only full recovery on materials?
A. P25,011
B. P25,111
C. P25,121
D. P25,132
836.
A method of depreciation whereby the amount to recover is spread uniformly over the
estimated life of the asset in terms of the periods or units of output.
D. SYD method
837.
Which of the following depreciation methods cannot have a salvage value of zero?
A. Declining balance method
D. SYD method
838.
A method of depreciation where a fixed sum of money is regularly deposited at
total dep e iatio of a asset at the e d of the assets esti ated life.
D. SYD method
839.
The function of interest rate and time that determines the cumulative amount of a
sinking fund resulting from specific periodic deposits.
A. Sinking fund factor
B. Present worth factor
C. Capacity factor
D. Demand factor
840.
The first cost of any property includes:
A. The original purchase price and freight and transportation charges
B. Installation expenses
C. Initial taxes and permits fee
D. All of the above
841.
In SYD method, the sum of years digit is calculated using which formula with n = number
of useful years of the equipment.
A. n(n 1)/2
B. n(n + 1)/2
C. n(n+1)
D. n(n-1)
842. Capitalized cost of any property is equal to the:
A. Annual cost
B. First cost + Interest of the first cost
C. First cost + Cost of perpetual maintenance
D. First cost + Salvage value
842.
The lessening of the value of an asset due to the decrease in the quantity available
(referring to the natural resources, coal, oil, etc).
A. Depreciation
B. Depletion
C. Inflation
D. Incremental cost
843.
Is the simplest form of business organization.
B. Partnership
C. Enterprise
D. Corporation
844.
An association of two or more persons for a purpose of engaging in a profitable
business.
B. Enterprise
C. Partnership
D. Corporation
845.
A distinct legal entity which can practically transact any business transaction which a
real person could do.
B. Enterprise
C. Partnership
D. Corporation
846.
Double taxation is a disadvantage of which business organization?
B. Partnership
C. Corporation
D. Enterprise
847.
Which is NOT a type of business organization?
B. Corporation
C. Enterprise
D. Partnership
848.
What is the minimum number of incorporators in order that a corporation be
organized?
A. 3
B. 5
C. 10
D. 7
849.
In case of bankruptcy of a partnership,
A. The partners are not liable for the liabilities of the partnership
B. The pa t e ship assets e ludi g the pa t e s pe so al assets o l ill e used to pa the
liabilities.
C. The pa t e s pe so al assets a e atta hed to the de t of the pa t e ship
D. The partners may sell stock to generate additional capital.
850.
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. P727.17
B. P717.17
C. P714.71
D. P731.17
851.
The method of depreciation where fixed sum of money is regularly deposited at
total dep e iatio of a asset at the e d of the assets esti ated life is k o as;
A. straight line method
B. SYD method
852.
The term used to express the series of uniform payments occurring at equal interval of
time is;
A. compound interest
B. annuity
C. perpetuity
D. depreciation
853.
obligations to financial contributors and claims of others based on profit is known as;
A. yield
B. earning value
C. economic return
D. expected yield
854.
As applied to capitalized asset, the distribution of the initial cost by periodic changes to
operation as in depreciation or the reduction of the depth by either periodic or irregular
prearranged program is called
A. amortization
B. annuity
C. depreciation
D. capital recovery
855.
Those funds that are required to make the enterprise or project going on.
A. banking
B. accumulated amount
C. working capital
D. principal or present worth
856.
These are product or services that are desired by humans and will be purchased if
money is available after the required necessities have been obtained
A. utilities
B. necessities
C. luxuries
D. producer good and services
857.
These are product or services that are required to support human life and activities, that
will be purchased in somewhat the same quantity even though the price varies considerably.
A. utilities
B. necessities
C. luxuries
D. producers goods and services
858.
A condition where only a few individuals produce a certain product and that any action
of one will lead to almost the same action of the others.
A. oligopoly
B. semi-monopoly
C. monopoly
D. perfect competition
859.
A. perfect competition
B. monopoly
C. oligopoly
D. elastic demand
860.
It is the amount that a willing buyer will pay to a willing seller for a property where each
has equal advantage and is under no compulsion to buy or sell.
A. fair value
B. use value
C. market value
D. book value
861.
It is defined to be the capacity of a commodity to satisfy human want.
A. dis ou t
B. luxuries
C. utility
D. necessity
862.
A form a summary of assets, liabilities and net worth;
A. balance method
B. break-even point
C. balance sheet
D. production
863.
The worth of a property, which is equal to the original cost less depreciation, is known
as;
A. earning value
B. scrap value
C. book value
D. face value
864.
When using net present worth calculation to compare two projects, which of the
following could invalidated the calculations?
A. mutually exclusive projects
B. evaluation over different periods
C. non-conventional cash flows
D. difference in the magnitude of the projects
865.
Which of the following is a form of business/company ownership?
A. partnership
B. corporation
C. single proprietorship
D. all of these
866.
What must two investments with the same present worth and unequal lives have?
A. identical salvage value
B. different salvage value
C. identical equivalent uniform annual cash flows
D. different equivalent annual cash flows
867.
What is the formula for a straight-line depreciation rate?
A. (100% - %net salvage value)/Estimated service life
B. %net salvage value/Estimated service life
C. 100%net salvage value/estimated service life
D. average net salvage value/estimated service life
868.
The amount received from the sale of an additional unit of a product is termed as:
A. marginal cost
B. marginal utility
C. marginal unit
D. marginal revenue
869.
An accounting book where the original record of all transaction is ordinarily recorded.
A. journal
B. credit entry
C. debit entry
D. transaction record
870.
An interest-earning fund in which equal deposits are made at equal intervals of time for
the purpose of gradually accumulating a specific sum of money required at some future date.
A. amortization
B. sinking fund
C. annuity
D. capitalized cost
871.
What is work-in-process classified as?
A. an asset
B. liability
C. an expense
D. owner's equity
872.
Which is a form of business/company ownership?
A. partnership
B. corporation
C. single proprietorship
D. all of the list
873.
The decrease in value of a physical property due to the passage of time;
A. inflation
B. depletion
C. recession
D. depreciation
874.
We may classify an interest rate, which specifies the actual rate an interest on the
principal for one year as:
A. Nominal rate
B. Rate of return
C. Exact interest rate
D. Effective rate
875.
This la states that Whe the use of o e of the fa to s of p odu tio is li ited, eithe
in increasing cost or by absolute quantity, a point will be reached beyond which an increase in
the a ia le fa to s ill esult i less tha p opo tio ate i ease i output.
A. Law of Supply and Demand
B. Law of Diminishing Return
C. Law of Gravity
D. Law of diminishing Utility
876.
The difference between the present worth and the worth at some future time is:
A. Discount
B. Profit
C. Credit
D. Debit
877.
The act of charging two or more buyers or sellers different prices for the same product
where the elasticities of supply or demand at each price level differ among market is known as:
A. Price optimization
B. Price discrimination
C. Price manipulation
D. Price war
878.
A formal organization of producers within an industry forming a perfect collision
purposely formed to increase profit and block newcomers from the industry, is termed as;
A. Oligopoly
B. Monopoly
C. Corporation
D. Cartel
879.
A situation in which rival firms drive prices down through attempts to undercut each
othe s p i e is alled;
A. Price war
B. Price discrimination price
C. Price Leadership
D. Oligopolistic monopoly
880.
The price that the quantity per unit time that the buyers want to buy is just equal to the
quantity the sellers want to sell is called;
A. Break-even price
B. Equilibrium price
C. Minimum price
D. Maximum price
881.
The length of time during which a property is capable of performing the function for
which it was designed and manufactured is termed as;
A. economic life
B. Life span
C. Eternal life
D. Physical life
882.
It is a distinct legal entity, separate from individuals who own it and which can engage in
practically any business transaction which real person can do.
A. Partnership
B. Single proprietorship
C. Eternal Life
D. Physical life
883.
A market whereby there is only one buyer of an item for which there are no goods
substitute.
A. Monopoly
B. Oligopoly
C. Oligopsony
D. Monopsony
884.
This form of business ownership is a legal entity possessing many of the legal powers of
individuals. It can hold title to property, sue and be sued in its own name. It is called:
A. corporation
B. company
C. general partnership
D. individual proprietorship
885.
The balance sheet is a statement showing the financial status of the company at any
given time. Which of the statements is not a part of the balance sheet.
A. liabilities
B. assets
C. cost of goods sold
D. net worth
886.
Refers to cost of merchandise which excludes freight and insurance cost;
A. freight-on-board
B. sunk cost
C. debentures
D. book value
887.
A fund into which annual deposits of A are made in order to accumulate fund F at n
years in the future.
A. Amortization
B. Annuity
C. Depreciation
D. Sinking fund
888.
Cash money credit necessary to establish and operate an enterprise.
A. funds
B. capital
C. liabilities
D. assets
889.
The worth of property which is equal to the original cost less depreciation;
A. scrap value
B. earning value
C. book value
D. face value
890.
Intangible assets of a corporation or company
A. dacion-en-pago
B. investment
C. patents
D. equity
891.
Additional information to prospective bidders on contract documents issued to bidding
date;
A. escalatory clause
B. delicts
C. technological assessments
D. bid bulletin
892.
A civil wrong committed by one person causing damage to another person or his
property or reputation;
A. tort
B. negligence
C. material breach
D. fraud
893.
What is an annuity?
A. A series of equal payments at equal time periods.
B. The cost of manufacturing a product
C. An investment that yields an equal amount of interest each year
D. The overhead cost per unit of production
894.
Consist of the actual counting or determination of the actual quantity of the materials
on hands as of a given date;
B. Technological assessment
C. Material update
D. Material count
895.
An artificial expense that spreads the purchase price of an assets or other property over
a number of years
A. Depreciation amnesty
B. Sinking fund
C. Bond
896.
Estimated value at the end of the useful life;
A. salvage value
B. economic life
C. balance sheet
D. compounded annually
897.
The recorded current value of an asset is known as:
A. scrap value
B. book value
C. salvage value
D. present worth
898.
The ratio of the interest payment to the principal for a given unit of time and is usually
expressed as percentage of the principal is known as:
A. investment
B. nominal interest
C. interest
D. interest rate
899.
A method of depreciation whereby the amount to recover is spread over the estimated
life of the asset in terms of the periods or units of output is called
A. SOYD method
B. Declining balance method
900.
The interest rate at which the present worth of cash flow of project is zero, or the
interest earned by an investment.
A. Rate of return
B. Effective rate
C. Nominal rate
D. Yield
901.
It is the amount of money earned by given capital.
A. Interest
B. Annuity
C. Cash flow
902.
Which of the following is a type of simple interest;
A. Ordinary
B. Exact
C. Both A and B
903.
The interest earned by the principal competed at the end of the investment period, it
varies directly with time.
A. Compound interest
B. Simple interest
C. Annuity
D. Perpetuity
904.
The interest is completed every end of each interest period and the interest earned for
the period is added to the principal.
A. Compound interest
B. Simple interest
C. Annuity
D. Perpetuity
905.
It is rate quoted in describing a given variety of compound interest.
A. nominal rate
B. effective rate
C. simple rate
D. compound rate
906.
It is the actual interest earned in one year period.
A. Nominal rate
B. Effective rate
C. Simple rate
D. Compound rate
907.
A series of uniform payments made at equal intervals of time.
A. perpetuity
B. interest
C. rate
D. annuity
908.
Which of the following is type of annuity.
A. Ordinary
B. Deferred
C. Annuity due
D. All of the above
909.
An annuity where the payments periods extend forever or the periodic payments
continue indefinitely.
A. Perpetuity
B. Interest
C. Rate
D. Annuity
910.
The payment is made at the end of each period starting from the first period.
A. Ordinary annuity
B. Deferred annuity
C. Annuity due
D. All of the above
911.
The first payment is deferred a certain number of periods after the first.
A. Ordinary annuity
B. Deferred annuity
C. Annuity due
912.
The payment is made at the beginning of each period starting from the first period.
A. Ordinary annuity
B. Deferred annuity
C. Annuity due
D. None of the due
913.
It is an application of perpetuity.
A. Capitalized cost
B. Machine cost
C. Manpower cost
D. Equipment cost
914.
It refers to the decrease in the value of an asset due to usage of passage of time.
A. Interest
B. Annuity
C. Depreciation
D. Perpetuity
915.
Which of the following is the method of computing depreciation
A. Straight line depreciation
C. Sum of the years method
D. All of the above.
916.
The most common method used in computing depreciation;
C. Sum of the years digit method
917.
The depreciation charge in this method is assumed to vary directly to the number of
ea s a d i e sel to the su of the ea s digit.
C. u of the ea s digit ethod
918.
It is invested yearly at a rate of I to amount to (FC SV) at the end of the life to the
property.
C. Sum of the years digit method
919.
A written contract to pay a certain redemption value on a specified redemption date
and to pay equal dividends periodically.
A. Bond
B. Capital
C. Interest
D. Annuity
920.
A method of determining when cost exactly equal to revenue.
A. Experimental method
B. Break-even method
C. Break-add method
921.
Find the interest on P6,800.00 for 3 years at 11% simple interest.
A. P 1,875.00
B. P 1,987.00
C. P 2,144.00
D. P 2,244.00
922.
A man borrowed P10,000.00 from his friend and agrees to pay at the end of 90 days
under 8% simple interest rate. What is the required amount?
A. P 10,200.00
B. P 11,500.00
C. P 9,500.00
D. P 10,700.00
923.
Annie buys a television set from a merchant who offers P25,000.00 at the end of
60days. Annie wished to pay immediately and the merchant offers to compute the required
amount on the assumption that the money is worth 14% simple interest. What is the required
amount?
A. P 20,234.87
B. P 19,222.67
C. P 24,429.97
D. P 28,456.23
924.
What is the principal amount if the amount of interest at the end of 2 1/2 year is
P4,500.00 for a simple interest of 6% per annum?
A. P 35,000.00
B. P 30,000.00
C. P 40,000.00
D. P 45,000.00
925.
How long must a P40,000 note bearing 4% simple interest run to amount to P41,350.00?
A. 340days
B. 403 days
C. 304 days
D. 430 days
926.
If P16,000 earns P480 in 9monnths, what is the annual rate of interest?
A. 1%
B. 2%
C. 3%
D. 4%
927.
A man lends P6,000 at 6% simple interest for 4 years. At the end of this time he invest
the entire amount (principal plus interest)at 5% compounded annually for 12 years. How much
will he have at the end of the 16-year period.?
A. P 13,361.20
B. P 13,633.20
C. P13,333.20
D. P16,323.20
928.
A time deposit of P110,000 for 31days earns P890.39 on maturity date after deducting
the 20% withholding tax on interest income. Find interest per annum.
A. 12.5%
B. 11.95%
C. 12.25%
D. 11.75%
929.
A bank charges 12% simple interest on a P300.00 loan. How much will be repaid if the
loan is paid back in one lump sum after three years.
A. P 408.00
B. P 551.00
C. P415.00
D. P450.00
930.
A tag price of a certain commodity is for 100 days. If paid in 31 days, there is
3%discount. What is the simple interest paid?
A. 12.5%
B. 6.25%
C. 22.32%
D. 16.14%
931.
Accumulate P5,000.00 for 10 years at 8% compounded quarterly.
A. P 12,456.20
B. P 13,876.50
C. P10,345.80
D. P11,040.20
932.
Accumulate P5,000.00 for 10 years at 8% compounded semi-annually.
A. P 10,955.61
B. P 10,233.67
C. P9,455.67
D. P11,876.34
933.
Accumulate P5,000.00 for 10 years at 8% compounded monthly
A. P 15,456.75
B. P 11,102.61
C. P10,955.61
D. P10,955.61
934.
Accumulate P5,000.00 for 10 years at 8% compounded annually.
A. P 10,794.62
B. P 8,567.97
C. P10,987.90
D. P7,876.87
935.
How long it will take P1,000 to amount to P1,346 if invested at 6% compounded
quarterly.
A. 3 years
B. 4 years
C. 5 years
D. 6 years
936.
How long will it take for an investment to double its amount if invested at an interest
rate of 6% compounded bi-monthly
A. 10 years
B. 12 years
C. 13 years
D. 14 years
937.
If the compound interest on P3,000.00 in years is P500.00 then the compound interest
on P3,000.00 in 4 years is:
A. P 956.00
B. P 1,083.00
C. P1,125.00
D. P1,526.00
938.
The salary of Mr. Cruz is increased by 30%every 2 years beginning January 1, 1982.
Counting from that date, at what year will his salary just exceed twice his original salary?
A. 1988
B. 1989
C. 1990
D. 1991
939.
If you borrowed P10,000 from the bank with 18% interest per annum, what is the total
amount to be repaid at the end of one year.
A. P 11,800.00
B. P 19,000.00
C. P28,000.00
D. P10,180.00
940.
What is the effective rate for an interest rate at 12% compounded continuously?
A. 12.01%
B. 12.89%
C. 12.42%
D. 12.75%
941.
How long it will take for an investment to fivefold its amount if money is worth
14%compounded semiannually.
A. 11
B. 12
C. 13
D. 14
942.
An interest of 8% compounded semiannually is how many percent if compounded
quarterly?
A. 7.81%
B. 7.85%
C. 7.92%
D. 8.01%
943.
A man is expecting to receive P450,000.00 at the end of 7 years. If money is worth 14%
compounded quarterly how much is it worth at present?
A. P 125,458.36
B. P 147,456.36
C. P162,455.63
D. P171,744.44
944.
A man has a will of P650,000.00 from his father. If his father deposited an amount of
P450,000 in a trust fund earning 8% compounded annually, after how many years will he man
receive his will?
A. 4.55 years
B. 4.77 years
C. 5.11 years
D. 5.33 years
945.
Mr. Adam deposited P120,000.00 in a bank who offers 8%interest compounded
quarterly. If the interest is subject to a 14% tax, how much will he receive after 5 years?
A. P 178,313.69
B. P 153,349.77
C. P 170,149.77
D. P 175,343.77
946.
What interest compounded monthly is equivalent to an interest rate of 14%
compounded quarterly
A. 1.15%
B. 13.84%
C. 10.03%
D. 11.52%
947.
What is the worth of two P100,000 payments at the end of the third and the fourth
year? The annual interest rate is 8%.
A. P 152.87
B. P 112.34
C. P 187.98
D. P 176.67
948.
A firm borrows P2,000.00 for 6years at 8%. At the end of 6 years, it renews the loan for
the amount due plus P2,000 more for 2 years at 8%. What is the lump sum due?
A. P 5,679.67
B. P 6,789.98
C. P 6,034.66
D. P 5,888.77
949.
At an annual rate of return of 8%, what is the future worth ofP1,000 at the end of 4
years?
A. P 1,388.90
B. P 1,234.56
C. P 1,765.56
D. P 1,360.50
950.
A student has money given by his grandfather in the amount of P20,000.00. How much
money in the form of interest will he get if the money is put in a bank that offers 8% rate
compounded annually at the end of 7 years?
A. P 34,276.48
B. P 34,270.00
C. P 36,276.40
D. P 34,266.68

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ENGINEERING ECONOMY

Choose the letter of the best answer in each questions.Avoid ERASURES.

s the asis of a ou t s do esti

79. U de o ditio s of pe fe t o petitio , the p i e at hi h a gi e p odu t ill e supplied

a e a e e o ded a d the i te est

ethod fo o puti g depletio ?

Find the value of x, (F/P, x, 6) if F/P compounded quarterly is equal to 1.612226.

Average hauling distance

Installing and dismantling of machine

Cost per ton

Mr. Jimenez owes Mr. Padua the following amounts:

P40,000 due 2 years hence

Padilla Pawnshop sells jewelries on either of the following arrangements:

Cash Price: Discount of 10% of the marked price

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