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Engineering Economics

Engineering Economics
What is an index of short-term paying ability?

Current ratio
Profit margin ratio
Gross margin
Price-earnings ratio

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Engineering Economics
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.

9 years
10 years
7 eyars
8 years

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Engineering Economics
In what method of computing depreciation where it assumes that a sinking fund is established in which funds will accumulate for replacement purposes?

Sinking fund method
Sum-of-year digit method
Straight line method
Declining balance method

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Engineering Economics
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?

Simple interest
Effective rate of interest
Compound interest
Nominal rate of interest

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Engineering Economics
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?

P 212.90
P 236.20
P 231.56
P 222.67

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Engineering Economics
What refers to the cost of borrowing money or the amount earned by a unit principal per unit time?

Economic return
Yield rate
Rate of interest
Rate of return

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