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1. First Benchmark Publishings gross margin is 50% of sales.

The operating costs of the publishing 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 %

D. 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 referred to as the
bankers discount.

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 2 nd 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 considered as the standard unit which forms the basis of a countrys domestic money supply?

A. Monetary unit

B. Currency

C. Foreign exchange

D. Cash or check

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:

A. Few sellers and few buyers

B. Few sellers and many buyers

C. Many sellers and few buyers

D. One seller and few buyers

69. Duopoly is a market situation where 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

70. What is another term for perfect competition?

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?

A. Perfect competition

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. When one of the factors of production is fixed in quantity or is difficult to increase, increasing the
other factors of production will result in a less than proportionate increase in 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. Under conditions of perfect competition, the price at which any given product will be supplied and
purchased is the price that will result in the supply and the demand being equal. 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

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. One bankers year 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

Choose the letter of the best answer in each questions.


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 type of bond where the corporations owner name are recorded and the interest is paid
periodically to the owners with their asking for it?

A. Preferred bond

B. Registered bond

C. Incorporators bond

D. Callable bond

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?

A. Straight line method

B. Sinking fund method

C. Sum-of-year digit method

D. Declining balance method

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?

A. Straight line method

B. Sinking fund method

C. Sum-of-year digit method

D. Declining balance method

116. In SYD method of computing depreciation, which of the following is the formula in finding the sum
of years 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 another term for unit method for computing depletion?

A. Initial cost method

B. Percentage method

C. Factor method

D. Sinking fund method

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?

A. Sole proprietorship

B. Partnership

C. Enterprise

D. Corporation

148. Double taxation is a disadvantage of which business organization?

A. Sole proprietorship

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.

Choose the letter of the best answer in each questions.


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. Incorporators stock

D. Presidential stock

156. The amount of companys profit that the board of directors of the corporation decides to distribute to
ordinary shareholders is called ______.

A. Dividend

B. Return

C. Share of stock

D. Equity

157. What refers to the residual value of a companys assets after all outside liabilities (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 another term for current assets?

A. Fixed assets

B. Non-liquid assets

C. Liquid assets

D. Ccash

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 deliberate lowering of the price of a nations currency in terms of the accepted 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 income to owners equity

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. Owners equity

C. Inventory turnover

D. Quick assets

190. What is another term for acid-test ratio?

A. Current ratio

B. Quick ratio

C. Profit margin ratio

D. Price-earnings ratio

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 = liability + owners equity

B. Liability = assets + owners equity

C. Owners equity = assets + liability

D. Owners equity = liability 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

C. Profit margin 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 income to owners 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?

A. Profit margin ratio

B. Price-earnings ratio

C. Return of investment ratio

D. Quick ratio

202. What is a measure of the average speed with which accounts receivable are collected?

A. Profit margin ratio

B. Receivables turnover

C. Return of investment ratio

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. Common shareholders equity to number of outstanding shares

204. What is the ratio of the net income to owners equity?

A. Gross margin

B. Return of investment ratio

C. Book value per share of common stock

D. Inventory turnover

205. What is the ratio of the market price per share to earnings per share called?

A. Gross margin

B. Price-earnings ratio

C. Book value per share of common stock

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 common shareholders equity to the number of outstanding shares

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

B. The ratio of gross profit to net sales

C. The ratio of common shareholders equity to the number of outstanding shares

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?

A. The ratio of net income before taxes to net sales

B. The ratio of gross profit to net sales

C. The ratio of common shareholders equity to the number of outstanding shares

D. The ratio of cost of goods sold to average cost of inventory on hand

209. What is an inventory turnover?

A. The ratio of net income before taxes to net sales

B. The ratio of gross profit to net sales

C. The ratio of common shareholders equity to the number of outstanding shares

D. The ratio of cost of goods sold to average cost of inventory on hand

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 paper currency issued by the central bank which forms part of the countrys money supply is
called ______.

A. T-bills

B. Bank notes

C. Check

D. Coupon

220. When one of the factors of production is fixed in quantity or is difficult to increase, increasing the
other factors of production will result in a less than proportionate increase in output.

A. Law of diminishing return

B. Law of supply

C. Law of demand

D. Law of supply and demand

221. What is the ratio of the market price per share to the earnings per share?

A. Inventory turnover

B. Price-earnings

C. Book value per share of common stock

D. Profit margin

222. What is the ratio of the net income to owners equity?

A. Return on investment

B. Inventory turnover

C. Profit margin

D. Price-earnings

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 priori

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?

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 each period.

D. Compound interest is paid on all amounts in the annuity.

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.

A. Straight line method

B. Sinking fund method

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

B. Sinking fund 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 depreciation of an asset at the
end of the assets estimated life.

A. Straight line method

B. Sinking fund method

C. Declining balance method

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 or often referred to as the Bankers Discount.

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 100days 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

Choose the letter of the best answer in each questions.


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

A. 7%

B. 5%

C. 8%

D. 6%

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. What is the single payment compound amount factor for 8% compounded bi-monthly for 5 years.

A. 0.524273541

B. 1.487886717

C. 0.787566127

D. 1.612226000

For Problems 321 - 323:


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%

For Problems 330 - 332:


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 semiquarterly?

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 semi-annually. 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 thelump 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 semi-annually?

A. 26.30 years

B. 33.15 years

C. 40.30 years

D. 20.15 years

153. P200,000 was deposited on Jan. 1,1988 at an interest rate of 24% compounded semi-annually. 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.) 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. 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. A machine has an initial cost of P50,00.00 and a salvage value of P10,000.00 after 10 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 5 th 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 equipmentusing 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 6 thyear, how much is the first
cost of the machine if the constant percentage of declining value is used in the computation for its
depreciation.(Mathesons 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 5thyear.

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

B. Declining Balance

C. Sinking Fund

D. Sum of Years Digit

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

B. Declining Balance

C. Sinking Fund

D. Sum of Years Digit

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

D. Sum of Years Digit

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

B. Declining Balance

C. Sinking Fund

D. Sum of Years Digit

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

Choose the letter of the best answer in each questions.


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 one suppliers
actions significantly affect prices and supply.

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

D. Perfect competition

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.

A. Perfect competition

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. Froyd Corporations gross margin is 45% of sales. Operating expenses such as sales and
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 wellcompacted 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

473. 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

474. 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

475. 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%

476. 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%

477. 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

478. 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

479. 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%

480. 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

481. 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%

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
discount?

A. 3.67%

B. 4.00%

C. 4.15%

D. 4.25%

483. 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%

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 year?

A. P25,168

B. P25,175

C. P25,189

D. P25,250

485. 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

486. 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%

487. 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%

488. 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

489. 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%

490. 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%

491. 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

492. 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

493. 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

494. 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%

495. 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%

496. 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 or often referred to as
the bankers discount.

A. 13.15%

B. 13.32%

C. 13.46%

D. 13.73%

497. 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

498. 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%

499. 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

500. 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%

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, 2006 at 7%
interest. How much is the interest using the Bankers 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 withdrawn during the period.

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% compounded
quarterly?

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% compounded
quarterly?

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 semiannually.

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 semiannually?

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 withdrawn during
the period.

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 invested at 8%
compounded quarterly?

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 positive? Assume i
0.

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 invested at 8%
compounded quarterly?

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 semiannually?

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 semi-annually. 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 in the bank
so that on the childs 18th birthday, the child will receive the amount 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 sum of P10,000
on his 21stbirthday. What is the present value of the inheritance as of the boys 6 th 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 but will be
held in trust by the childs mother until it amounts 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 5thyear 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 todays 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, how much profit, in
todays pesos, is realized over the five-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
P60,000 at the end of 2000
P80,000 at the end of 2001
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 yearby-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
P60,000 due 3 years hence
P72,000 due 4 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. An investment indicates a single compound amount factor of 1.32 if invested for n years. If the
interest rate is 4.73% per annum, find the value of n.

A. 4

B. 5

C. 6

D. 7

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 paper currency issued by the Central Bank which forms part of the countrys money supply.

A. T-bills

B. Bank note

C. Check

D. Coupon

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.

A. Physical inventory

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 semi-annual 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 P20,000 each on the childs
18th, 19th, 20th and 21stbirthdays. How much is the lump sum 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 balance on
monthly installments for x years at an interest rate of 15% compounded monthly. 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 17 th, 18th, 19th and
20th birthday, how much will be left in the account at the end of the 21 st 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 will be the difference between the firms annual 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 20 th 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 20 th 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 10 th 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 2-year 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 9 th 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 companys thought to have
gained stability already. The stock has a par value 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 semiannual 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 Boffers P9,000,000 payable P2,000,000 down payment, the balance payable P500,000 semiannually 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 father wishes to provide P40,000 for his son on his sons 21st birthday. How much should he
deposit every 6 months in a savings account which pays 3% compounded semi-annually, 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 10 th 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. An owners equity

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 co-owners for
profit.

A. Sole proprietorship

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. 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.

A. Perfect competition

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

D. Perfect competition

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. 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. 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. 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

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. Chicago Bulls offer is smaller than that of LA Lakers

B. Chicago Bulls offer is exactly the same as LA Lakers

C. Chicago Bulls offer is just few dollars more per year than that of LA Lakers

D. Chicago Bulls offer is over $150,000 per year than that of LA Lakers

741. John Grisham, author of the best-selling novel The Chamber sold its copyright to Warner Bros. for
the rights to make it into a motion picture. Mr. Grishams has options between the following Warner Bros.
proposals:
A. An immediate lump sum payment of $5,000,000.
B. An initial payment of $2,500,000 plus 4% of the movies gross receipts for the next 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 next years deposit by 10%
of the deposit in the preceding year until the end 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. The profit derived from a project or business enterprise without consideration of 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

Choose the letter of the best answer in each questions.


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?

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 each period.

D. Compound interest is paid on all amounts in the annuity.

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.

A. Straight line method

B. Sinking fund method

C. SYD method

D. Declining balance 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 5 th 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. An asset is purchased for P9,000.00. 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 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. An asset is purchased for P20,000.00. Its estimated life is 10 years after which it will be 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. A machine has an initial cost of P50,000.00 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. 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-years 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. 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. P2,400.00

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. 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 sum-of-years 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 5 th 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

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