What refers to a document that shows proof of legal ownership of a financial security?
Answer
Correct Answer:
Coupon
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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?
Answer
Correct Answer:
Bond
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What refers to the present worth of all the amount the bondholder will receive through his possession of the bond?
Answer
Correct Answer:
Value of bond
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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?
Answer
Correct Answer:
Bond
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Which is NOT an essential element of an ordinary annuity?
Answer
Correct Answer:
The first payment is made at the beginning of the first period.
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What is the type of annuity where the first payment does not begin until some later date in the cash flow?
Answer
Correct Answer:
Deferred annuity
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What is the type of annuity that does not have a fixed time span but continues indefinitely or forever?
Answer
Correct Answer:
Perpetuity
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What is the type of annuity where the payments are made at the beginning of the each period starting from the first period?
Answer
Correct Answer:
Annuity due
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What is the type of annuity where the payments are made at the end of each period starting from the first period?
Answer
Correct Answer:
Ordinary annuity
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What is the term for an annuity with a fixed time span?
Answer
Correct Answer:
Annuity certain
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A uniform series of payment occurring at equal interval of time is called ______.
Answer
Correct Answer:
Annuity
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What refers to the cost of borrowing money or the amount earned by a unit principal per unit time?
Answer
Correct Answer:
Rate of interest
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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?
Answer
Correct Answer:
Compound interest
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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?
Answer
Correct Answer:
Interest rate
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What refers to the amount of money paid for the use of borrowed capital?
Answer
Correct Answer:
Interest
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What refers to the present worth of the probable future net earnings?
Answer
Correct Answer:
Earning value
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The difference between the present and future worth of money at some time in the future is called ______.
Answer
Correct Answer:
Discount
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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?
Answer
Correct Answer:
Time value of money
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One banker’s year is equivalent to ______ days.
Answer
Correct Answer:
360
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Under ordinary simple interest, how many days in one year?
Answer
Correct Answer:
360
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What is defined as the interest on a load or principal that is based only on the original amount of the loan or principal?
Answer
Correct Answer:
Simple interest
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What do you call any particular raw material or primary product such as cloth, wool, flour, coffee, etc.?
Answer
Correct Answer:
Commodity
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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:
Answer
Correct Answer:
Law of supply and demand
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What refers to the amount of a product made available for sale?
Answer
Correct Answer:
Supply
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What refers to the need, want or desire for a product backed by the money to purchase it?
Answer
Correct Answer:
Demand
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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:
Answer
Correct Answer:
Law of diminishing return
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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.
Answer
Correct Answer:
Natural monopoly
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Perfect monopoly exists only if:
Answer
Correct Answer:
The single vendor can prevent the entry of all other vendors in the market
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What is the opposite of perfect competition?
Answer
Correct Answer:
Monopoly
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Aside from many sellers and many buyers, which one is a characteristic of perfect competition?
Answer
Correct Answer:
All of the above
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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?
Answer
Correct Answer:
Perfect competition
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What is another term for “perfect competition”?
Answer
Correct Answer:
Atomistic competition
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Duopoly is a market situation where there is/are:
Answer
Correct Answer:
Few sellers and many buyers
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Duopsony is a market situation where there is/are:
Answer
Correct Answer:
Many sellers and few buyers
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Oligopoly exists when there is/are:
Answer
Correct Answer:
Few sellers and many buyers
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If there are many sellers and few buyers, the market situation is _________ .
Answer
Correct Answer:
Oligopsony
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If there is only one seller and many buyers, the market situation is ________ .
Answer
Correct Answer:
Monopoly
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What is the market situation exist when there are many buyers and many sellers?
Answer
Correct Answer:
Perfect competition
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What market situation exists where there is only one buyer and only one seller?
Answer
Correct Answer:
Bilateral monopoly
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What market situation exists where there are few sellers and few buyers?
Answer
Correct Answer:
Bilateral oligopoly
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What is a market situation whereby there is only one buyer of an item for which there is no goods substitute?
Answer
Correct Answer:
Monopoly
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What is defined as an entity which makes product, good or services available to buyer or consumer in exchange of monetary consideration?
Answer
Correct Answer:
Producer
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What is considered as the basic consuming or demanding unit of a commodity?
Answer
Correct Answer:
Buyer or consumer
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What refers to the exchange mechanism that brings together the sellers and the buyers of a product, factor of production or financial security?
Answer
Correct Answer:
Market
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What refers to the goods and services that are desired by human and will be acquired only after all the needs have been satisfied?
Answer
Correct Answer:
Necessity
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What refers to the goods and services that are required to support human life, needs and activities?
Answer
Correct Answer:
Necessity
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What are the two classifications of goods and services?
Answer
Correct Answer:
Consumer and producer
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What is defined as any tangible economic activity that contributes directly or indirectly to the satisfaction of human want?
Answer
Correct Answer:
Services
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What is defined as any tangible economic product that contributes directly or indirectly to the satisfaction of human want?
Answer
Correct Answer:
Goods or commodities
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What is considered as the standard unit which forms the basis of a country’s domestic money supply?
Answer
Correct Answer:
Foreign exchange
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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?
Answer
Correct Answer:
Economic Analysis
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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 solIf the shoes sell at P 5,000 a pair, how many pairs must be produced each month for the manufacturer to break-even?
Answer
Correct Answer:
2,632
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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.
Answer
Correct Answer:
1,000 feet
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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?
Answer
Correct Answer:
1.0 hour per unit
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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
Answer
Correct Answer:
1,053
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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.
Answer
Correct Answer:
$ 5,000,000.00
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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%.
Answer
Correct Answer:
P 9,250.00
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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
Answer
Correct Answer:
P 3,927.27
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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.
Answer
Correct Answer:
9 years
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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?
Answer
Correct Answer:
P 2,000.00
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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?
Answer
Correct Answer:
P 236.20
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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.
Answer
Correct Answer:
P 1,144.81
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A P 1,000,000 issue of 3%, 15-year bond was sold at 95%. What is the rate of interest of this investment?
Answer
Correct Answer:
3.0%
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Miss Calledo deposited P 1,000, P 1,500 and P 2,000 at the end of the 2nd year, 3rd year and 4th year, respectively in a savings account which earned 10% per annum. How much is in the account at the end of the 4th year?
Answer
Correct Answer:
P 4,860.00
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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?
Answer
Correct Answer:
P 6,922.93
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A person buys a piece of lot for P 100,000 down payment 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?
Answer
Correct Answer:
P 143,999.08
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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.
Answer
Correct Answer:
P 43,763.20
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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?
Answer
Correct Answer:
P 7,731.29
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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?
Answer
Correct Answer:
P 2,504.57
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What annuity is required over 12 years to equate with a future amount of P 20,000? Assume i= 6% annually.
Answer
Correct Answer:
P 1,185.54
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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 %?
Answer
Correct Answer:
P 717.17
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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?
Answer
Correct Answer:
P 15,030.03
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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?
Answer
Correct Answer:
P 3,260.34
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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%.
Answer
Correct Answer:
P 152.88
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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?
Answer
Correct Answer:
P54.66
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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%.
Answer
Correct Answer:
P1,549.64
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Mandarin Bank advertises 9.5% account that yields 9.84% annually. Find how often the interest is compounded.
Answer
Correct Answer:
Quarterly
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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?
Answer
Correct Answer:
P705.42
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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?
Answer
Correct Answer:
11.57 years
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How long will it take money to double itself if invested at 5% compounded annually?
Answer
Correct Answer:
14.2 years
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An amount of P1,000 becomes P1,608.44 after 4 years compounded bimonthly. Find the nominal interest.
Answer
Correct Answer:
12.00 %
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Which of these gives the lowest effective rate of interest?
Answer
Correct Answer:
11.60 % compounded annually
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What rate of interest compounded annually is the same as the rate of interest of 8% compounded quarterly?
Answer
Correct Answer:
8.24 %
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What is the effective rate corresponding to 18% compounded daily? Take 1 year is equal to 360 days.
Answer
Correct Answer:
19.72 %
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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?
Answer
Correct Answer:
9.14 %
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What is the ordinary interest on P1,500.50 for 182 days at 5.2%?
Answer
Correct Answer:
P39.45
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The exact simple interest of P5,000 invested from June 21, 1995 to December 25, 1995 is P100. What is the rate of interest?
Answer
Correct Answer:
3.90 %
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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 “banker’s discount”.
Answer
Correct Answer:
13.73 %
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Mr. Jun Ramos was granted a loan of P20,000 by his employer Excel First Review and Training Center, Inwith 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.
Answer
Correct Answer:
P18,000
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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?
Answer
Correct Answer:
12.07 %
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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.
Answer
Correct Answer:
11.75 %
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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?
Answer
Correct Answer:
16.28 %
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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?
Answer
Correct Answer:
4.00 %
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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.
Answer
Correct Answer:
10.29 %
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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?
Answer
Correct Answer:
5,937.50
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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 borroweIf at the end of one year, she has to pay the full amount of P100,000, what is the actual rate of interest?
Answer
Correct Answer:
25.0 %
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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?
Answer
Correct Answer:
12 months
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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.
Answer
Correct Answer:
29.17 %
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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?
Answer
Correct Answer:
6.65 %
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First Benchmark Publishing’s 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?
Answer
Correct Answer:
21 %
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