---------BISMILLAH----------

A. Inversely with its price. A. P4186.43

1. What is defined as any B. Directly with population. B. P4133.33
tangible economic product that C. Directly with income. C. P5124.54
contributes directly or indirectly to D. Inversely with the price of
the satisfaction of human want? substitute goods. 17. * What is the principal amount
if the amount of interest at the end
A. Services 9. Aside from many sellers and of 2½ year is P4500 for a simple
B. Goods many buyers, which one is a interest of 6% per annum?
C. Commodities characteristic of perfect
D. Goods or commodities competition? A. P34,000
B. P32,000
2. What refers to the goods and A. Homogeneous product C. P28,000
services that are required to B. Free market entry and exit D. P30,000
support human life, needs and C. Perfect information and
activities? 18 * A man borrowed P10,000.00
absence of all economic friction from his friend and agrees to pay
D. All of the above at the end of 90 days under 8%
A. Producer product
B. Consumer products 10. What is the opposite of perfect simple interest rate. What is the
C. Luxury competition? required amount?
D. Necessity
A. Monopsony A. P10,100
3. What is considered as the B. Oligopoly B. P10,200
basic consuming or demanding C. Oligopsony C. P10,300
unit of a commodity? D. Monopoly
19. The interest calculated on the
A. Seller 11. What refers to the amount of basis of 365 days a year, is known
B. Manufacturer money paid for the use of as:
C. Producer borrowed capital?
D. Buyer or consumer A. Interest
A. Interest B. Ordinary simple interest
4. A fall in the price of a good B. Rate of interest C. Exact simple interest
causes producers to reduce the C. Simple interest D. None of these
quantity of the good they are D. Principal
willing to 20. * Mr. Bacani borrowed money
12.The difference between the from the Bank. He Received from
A. A change in supply present value and the worth of the Bank P1,842 and promise to
B. The law of demand money at some time in the future is repay P2,000 at the end of 10
C. The nature of an inferior good. called months. Determine the rate of
D. The law of supply. simple interest.
A. Interest rate
5. The quantity demanded is B. Net value A. 12.19%
C. Discount B. 12.03%
A. The amount of a good that D. Interest C. 11.54%
consumers plan to purchase at a D. 10.29%
particular price. 13. * What is the ordinary interest
B. Independent of the price of the on P1,500.50 for 182 days at 5.2% 21. What is defined as the
good. investment of loan or principal
C. Independent of consumers' A. P39.01 which is based not only on the
buying plans. B. P39.82 original amount of the loan or
D. Always equal to the equilibrium C. P39.45 principal but the amount of loaned
quantity. D. P39.99 or principal plus the previous
accumulated interest?
6. What is the market situation 14. Under ordinary simple
exist when there are many buyers interest, how many days in one A. Effective rate of interest
and many sellers? year? B. Nominal rate of interest
C. Compound interest
A. Perfect competition A. 300 D. Simple interest
B. Oligopoly B. 360
C. Oligopsony C. 365 22. What refers to the cost of
D. Monopoly D. 366 borrowing money or the amount
earned by a unit principal per unit
7. What refers to the exchange 15. * The exact simple interest of time?
mechanism that brings together P5,000 invested from June 21, A. Yield rate
the sellers and the buyers of a 1995 to December 25, 1995 is B. Rate of return
product, factor of production or P100. What is the rate of interest? C. Rate of interest
financial security? D. Economic return
A. 3.90%
A. Mall B. 392% 23. * The compound interest on
B. Market C. 3.95% $2500 for 5 years at 4% per
C. Store 16. * P4000 is borrowed for 75 annum (compounded annually) is
8. The law of demand states that days at 16% per annum simple A. $432
the quantity of a good demanded interest. How much will be due at B. $542
varies the end of 75 days? C. $642

1
D. $452 5% nominal annual interest 40. What is the equivalent nominal
compounded continuously. rate of 6% if it is compounded
24. * What rate of interest A. 5.13% quarterly?
compounded annually must be B. 5.26% A. 6.12%
received if an investment of C. 4.94% B. 4.24%
P54,000 made now with result in a D. 4.90% C. 5.43%
receipt of P72,000 at 5 years D. 5.87%
hence 32. The actual interest earned by a
A. 5.92% given principal is known as? 41. Oligopoly exists when there
B. 4.38% A. Compounded interest is/are:
C. 6.78% B. Nominal interest
D. 3.36% C. Simple interest A. Few sellers and few buyers
D. Effective interest B. Few sellers and many buyers
25. *Suppose that P100,000 is C. Many sellers and few buyers
invested at a certain rate of 33. *What is the corresponding D. One seller and few buyers
interest compounded annually for effective interest rate of 18%
2 years. If the accumulated interest compounded semi-monthly? 42. Perfect monopoly exists only
at the end of 2 years is P21,000. A. 19.35% if:
Find the rate B. 19.84%
A. 10.12% C. 19.48% A. The single vendor can prevent
B. 10.00% D. 19.64% the entry of all other vendors in the
C. 10.92% market
34. * A man borrowed P100,000 B. The single vendor gets the
26.* How long will it take money to at the interest rate of 12% per absolute franchise of the product
triple itself if invested at 8% annum, compounded quarterly. C. The single vendor is the only
compounded annually? What is the effective rate? one who has the permit to sell
A. 14.27 years A. 12.75% D. The single vendor is the only
B. 14.56 years B. 12.55% one who has the knowledge of the
C. 14.78 years C. 12.45% product
D. 12.35%
27. *A company invests P10,000 43. The law of demand states that,
35. *What rates of interest other things remaining the same,
today to be repaid in 5 years in compounded annually is the same
one lump sum at 12% the higher the price of a good, the
as the rate of interest of 8%
compounded annually. How much compounded quarterly
profit in present day pesos is A. Smaller is the demand for the
A. 8.24% good.
realized? B. 7.24%
A. P7,293.42 B. Smaller is the quantity of the
C. 6.24% good demanded.
B. P7,432.42 D. 9.24%
C. P7,623.42 C. Larger is the quantity of the
36. *What is the effective good demanded.
rate corresponding to 18% D. Larger is the demand for the
28*.For a loan acquired six years compounded daily? Take 1 year is good.
ago, a man paid out the amount of equal to 360 days.
P75,000.00. The interest was 44. The law of demand implies
A. 20.13% that, other things remaining the
computed at 18% compounded B. 17.55%
annually. How much was the same,
C. 18.29%
borrowed amount? D. 19.72% A. As the demand for
A. P25,335.16 37. *What is the cheeseburgers increases, the price
B, P26,529.46 corresponding effective interest of a cheeseburger will fall.
C. P28,602.26 rate of 18% compounded semi- B. As the price of a cheeseburger
D. P27,782.36 quarterly? rises, the quantity of
A. 17.72% cheeseburgers demanded will
29. *P200,000 was deposited on decrease.
Jan 1, 1988 at an interest rate of B. 16.67%
C. 19.48% C. As income increases, the
24% compounded semi-annually. quantity of cheeseburgers
How much would the sum on Jan demanded will increase.
1, 1993? 38. * What is the effective rate of
14% compounded semi-annually? D. As the price of a cheeseburger
A. P680,270 rises, the quantity of
B. P701,223 A. 14.49%
B. 14.59% cheeseburgers demanded will
C. P621,170 increase.
C. 14.69%
45. When supply decreases and
30. *How long (in nearest years) 39. An interest rate is quoted as demand does not change, the
will it take money to quadruple if it being 7.5% compounded quarterly. equilibrium quantity
earns 7% compounded semi- What is the effective annual
annually? interest rate? A. Decreases and the price rises.
A. 20 years A. 7.91% B. Increases and the price falls.
B. 22 years B. 7.51% C. Decreases and the price falls.
C. 24 years C. 7.71% D. Increases and the price rises.
D. 26 years D. 7.31%
46. What is defined as any
31. *Compute the effective annual tangible economic activity that
interest rate which is equivalent to

2
contributes directly or indirectly to A. 23.5 % A. 14.34%
the satisfaction of human want? B. 24.7 % B. 13.73%
C. 25.0 % C. 15.61%
A. Services C. 25.08 % D. 12.07%
B. Goods
C. Commodities 54. *A price tag of P1200 is 60. *P200,000 was deposited at
D. Goods or commodities specified if paid within 60 days but an interest rate of 24%
offers a 3% discount for cash in 30 compounded semi-annually. After
47. What refers to the goods and days. Find the rate of interest. how many years will the sum be
services that are desired by human P621,170?
and will be acquired only after all A. 37.11%
the needs have been satisfied? B. 40.21% A. 4 years
C. 38.51% B. 5 years
A. Producer products D. 39.31% C. 6 years
B. Consumer products D. 7 years
C. Luxury 55. *Mr. J. Dela Cruz borrowed
D. Necessity money from the bank. He received 61. *A man expects to receive
from the bank P1,340.00 and P20,000 in 10 years. How much is
48. What market situation exists promised to pay P1,500.00 at the that money worth now considering
where there are few sellers and end of 9 months. Determine the interest at 6% compounded
few buyers? simple interest rate and the quarterly?
corresponding discount rate or
A. Oligopoly often referred to as the “Banker’s A. P11,042.89
B. Oligopsony Discount”. B. P11,035.12
C. Bilateral oligopoly C. P11,025.25
D. Bilateral Oligopsony A. 15.92% ; 13.73% D. P11,012.52
B. Option 2
49. What is defined as an entity C. 18.28% ; 13.12% 62. *If the compound interest on
which makes product, good or D. 19.25% ; 13.33% P3,000.00 in 2 years is P500.00,
services available to buyer or then the compound interest on
consumer in exchange of 56. *How long will it take for an P3,000.00 in 4 years is:
monetary consideration? investment of P 5000 to grow to P
7500, if it earns 10% simple
A. Seller interest per year? A. P956.00
B. Manufacturer B. P1,083.00
C. Producer A. 5 years C. P1,125.00
D. Buyer or consumer B. 6 years D. P1,526.00
C. 4 years 63. *John invested $8000 at 6.5%
50. Because of increasing D. 3 years
marginal cost, most supply curves per annum compound interest
57. *The tag price of a certain which is compounded daily. The
A. Are horizontal. commodity is for 100 days. If paid amount at the end of fifth year is
B. Have a negative slope. in 31 days, there is a 3% discount.
C. Are vertical. What is the simple interest paid? A. $13,960.70
D. Have a positive slope. B. $10,960.70
A. 15.15% C. $11,960.70
51. One banker’s year is B. 14.41%
equivalent to ______ days. C. 16.14% 64. What refers to the cumulative
D. 17.21% effect of elapsed time on the
A. 300 money value of an event, based on
B. 360 58. *Annie buys a television set the earning power of equivalent
C. 365 from a merchant who offers P invested funds capital should or
D. 266 25,000.00 at the end of 60 days. will earn?
Annie wishes to pay immediately
52. *A man is required to pay and the merchant offers to A. Present worth factor
P200 at the end of 160 days or compute the required amount on B. Interest rate
P190 at the end of 40 days. the assumption that money is C. Time value of money
Determine the rate of interest. worth 14% simple interest. What is 65. What refers to the present
the required amount? worth of the probable future net
A. 18.4% earnings?
B. 15.8% A. P23,492.97
C. 19.6% B. P26,449.94 A. Total fair value
D. 16.4% C. P25,423.94 B. Total market value
53. * Engr. Trinidad loans from a D. P24,429.97 C. Going concern value
loan firm an amount of P100,000 D. Earning value
59. * Miss Evilla borrowed money
with a rate of simple interest of from a bank. She receives from the 66. *Jane invests $15000 at 5%
20% but the interest was deducted back P1,340.00 and promised to per annum compound interest
from the loan at the time the pay P1,500.00 at the end of 9 which is compounded daily. If a
money was borrowed. If at the end months. Determine the year is equal to 365 days then the
of one year, she has to pay the full corresponding discount rate or amount at the end of fifth day is
amount of P100,000, what is the often referred to as the banker
actual rate of interest? discount. A. $15,010.28
B. $18,010.28
3
C. $16,010 6. Duopsony is a market P21,915.00 after the bank
D. $14,010 situation where there is/are: collected the advance interest and
an additional amount of P85.00 for
67. *An amount of P1,000 A. Few sellers and few buyers notarial and inspection fees. What
becomes P1,608.44 after 4 years B. Few sellers and many buyers was the rate of interest that the
compounded bimonthly. Find the C. Many sellers and few buyers bank collected in advance?
nominal interest. D. One seller and few buyers
A. 13.64%
A. 11.89 % 7. Demands differ from wants in B. 16.43%
B. 12.00 % that C. 18.37%
C. 12.08 % D. 10.32%
D. 12.32 % A. wants require a plan to acquire
a good but demands require no 13. Compute the discount if
68. *P200,000 was deposited for a such plan. P2000 is discounted for 6 months
period of 4 years and 6 months B. demands are unlimited, at 8% simple interest.
and bears on interest of whereas wants are limited by
P85649.25. What is the rate of income. A. P29.67
interest if it is compounded C. wants imply a decision about B. P76.92
quarterly? which demands to satisfy, while C. P67.29
demands involve no specific plan D. P92.76
a. 7% to acquire the good.
b. 8% D. demands reflect a decision 14. The exact simple interest of
c. 9% about which wants to satisfy and a P5,000 invested from June 21,
d. 10% plan to buy the good, while wants 1995 to December 25, 1995 is
are unlimited and involve no P100. What is the rate of interest?
69. *How many years will
specific plan to acquire the good.
P100,000 earn a compound A. 3.90%
interest of P50,000 if the interest 8. When supply decreases and B. 3.92%
rate is 9% compounded quarterly? demand does not change, the C. 3.95%
equilibrium quantity D. 3.98%
A. 7.55 years
B. 6.55 years A. decreases and the price rises. 15. One banker’s year is
C. 5.55 years B. increases and the price falls. equivalent to ______ days.
D. 4.55 years C. decreases and the price falls.
D. increases and the price rises. A. 300
2. The right and privilege granted B. 360
to an individual or corporation to 9. Each point on a supply curve C. 365
do business in a certain region. represents D. 366
a. Permit
b. Royalty A. the highest price sellers can get 16. An amount of P1,000
c. License for each unit over time. becomes P1,608.44 after 4 years
d. Franchise B. the lowest price buyers will compounded bimonthly. Find the
accept per unit of the good. nominal interest.
3. How many years will it take for
C. the lowest price for which a
an investment to double, if the A. 11.89 %
supplier can profitably sell another
interest rate is 8% per year, B. 12.00 %
unit.
compounded annually? C. 12.08 %
D. the highest price buyers will pay
a. 7 years D. 12.32 %
for the good.
b. 8 years
Option 5 17. It takes 20.15 years to
c. 9 years
d. 10 years 10. What market situation exists quadruple your money if it is
where there is only one buyer and invested at x% compounded semi-
4. This occurs in a situation where annually. Find the value of x.
only one seller?
a commodity or service is supplied
by a number of vendors and there A. 8%
A. Monopsony
is nothing to prevent additional B. 7%
B. Monopoly
vendors entering the market. C. 6%
C. Bilateral monopsony
D. Bilateral monopoly D. 5%
a. Perfect competition 18. What refers to the present
11. In a cash-flow diagram:
b. Monopsony worth of the probable future net
c. Monopoly earnings?
A. Time 0 is considered to be the
d. Oligopoly
present
B. Time 1 is considered to be the A. Total fair value
5. A price tag of P1200 is
end of time period 1 b. Total market value
specified if paid within 60 days but
C. A vertical arrow pointing up C. Going concern value
offers a 3% discount for cash in 30
indicates a positive cash flow D. Earning value
days. Find the rate of interest.
D. All of these 19. If P500,000 is deposited at a
a. 37.11% rate of 11.25% compounded
12. A man borrowed from the
b. 40.21% monthly, determine the
bank under a promissory note that
c. 38.51% compounded interest after 7 years
he signed in the amount of
d. 39.31% and 9 months.
P25000.00 for a period of 1year.
He received only the amount of
4
A. P592,849 1. An economic condition in which a. 3 years
B. P690,849 there are so few suppliers of a b. 4 years
C. P600,849 particular product that one c. 5 years
D. P722,849 supplier’s actions significantly d. 6 years
affect prices and supply.
20. P200,000 was deposited for 11. When supply decreases and
a period of 4 years and 6 months a. Oligopoly demand does not change, the
and bears on interest of b. Monopsony equilibrium quantity
P85649.25. What is the rate of c. Monopoly a. decreases and the price rises.
interest if it is compounded d. Perfect competition b. increases and the price falls.
quarterly? c. decreases and the price falls.
2. An amount of P1,000 d. increases and the price rises.
A. 7% becomes P1,608.44 after 4 years
B. 8% compounded bimonthly. Find the 12. Find the principal, if the
C. 9% nominal interest. principal plus interest at the end of
D. 10% one and one-half years is $3360
a. 11.89 % for a simple interest rate of 8% per
21.The law of demand states that b. 12.00 % annum.
the quantity of a good demanded c. 12.08 % a. $ 2990
varies d. 12.32 % b. $ 3000
c. $ 3010
A. inversely with its price. 3. A market whereby there is d. $ 3020
B. directly with population. only one buyer of an item for when
C. directly with income. there are no goods substitute. 13. A market situation in which
D. inversely with the price of a. Monopsony two competing buyers exert
substitute goods. b. Monopoly controlling influence over many
c. Oligopoly sellers.
22. The law of demand states d. Oligopsony a. Bilateral monopoly
that, other things remaining the b. Oligopoly
same, the higher the price of a 4. A student who will inherit c. Duopsony
good, the $5000 in three years has a savings d. Duopoly
account that pays 5.5% per year,
A. smaller is the demand for the compounded annually. What is the 14. A man borrowed P10,000.00
good. present worth of the student's from his friend and agrees to pay
B. smaller is the quantity of the inheritance? at the end of 90 days under 8%
good demanded. a. $ 5871.21 simple interest rate. What is the
C. larger is the quantity of the good b. $ 4258.07 required amount?
demanded. c. $ 4609.22 a. P10,100
D. larger is the demand for the d. $ 4804.12 b. P10,200
good. c. P10,300
5. The law of demand states d. P10,400
23. Perfect monopoly exists only if: that, other things remaining the
same, the higher the price of a 15. A market situation in which
A. the single vendor can prevent good, the two powerful groups or
the entry of all other vendors in the organizations dominate commerce
market a. smaller is the demand for the in one business market or
B. the single vendor gets the good. commodity.
absolute franchise of the product b. smaller is the quantity of the
C. the single vendor is the only good demanded. a. Oligopoly
one who has the permit to sell c. larger is the quantity of the good b. Duopoly
D. the single vendor is the only demanded. c. Duopsony
one who has the knowledge of the d. larger is the demand for the d. Bilateral Monopoly
product good. 16. The difference between the
24. If the compound interest on 6. The money paid for the use of present value and the worth of
P3,000.00 in 2 years is P500.00, borrowed capital. money at some time in the future is
then the compound interest on a. Interest called
P3,000.00 in 4 years is: b. Amortization a. Market value
c. Annuity b. Net value
A. P956.00 d. Bonds c. Discount
B. P1,083.00 d. Interest
C. P1,125.00 7. What is the annual rate of
simple interest if $265 is earned in 17. These are products or
D. P1,526.00 services that are required to
four months on an investment
25. How many years will of $15,000? support human life and activities
P100,000 earn a compound a. 4.4 % that will be purchased in somewhat
interest of P50,000 if the interest b. 3.9 % the same quantity event though
rate is 9% compounded quarterly? c. 5.3 % the price varies considerably.
d. 4.9 % a. Commodities
A. 7.55 years b. Necessities
B. 6.55 years 10. How long will it take for an c. Demands
C. 5.55 years investment of $5000 to grow to d. Luxury
D. 4.55 years $7500, if it earns 10% simple
interest per year? 18. The quantity of a certain
commodity that is offered for sale
5
at a certain price at a given place C. 5% D. $99,061
and time. D. 7%
a. Utility 1. A 5-year ordinary annuity has
b. Supply 3. Compute the nominal rate for a a present value of $1,000. If the
c. Stocks period of 6 years for an effective interest rate is 8 percent, the
d. Goods rate of 8.33% if it is compounded amount of each annuity payment
continuously is closest to which of the following?
19. What amount of money is A. 7% A. $250.44
equivalent to receiving $5000 two B. 5% B. $231.91
years from today, if interest is C. 8% C. $181.62
compounded quarterly at the rate D. 6% D. $184.08
of 2.5% per quarter?
a. $ 4009.13 4. If the nominal interest rate is 3. Determine the present worth of
b. $ 4231.14 3%, how much is P5000 worth in an annual payment of P2500.00 at
c. $ 4113.11 10 years in a continuously the end of each year for 12 years
d. $ 4103.73 compounded account? at 8% compounded annually.
A. P5750 A. P18,840.20
20. It is defined as the capacity B. P7500 B. P30,000.00
of a commodity to satisfy human C. P6750 C. P15,000.00
want. D. P6350 D. P17,546.04
a. Satisfaction
b. Luxury 5. An amount of P50,000 was 4. The type of annuity where the
c. Necessity invested for 3 years. Compute its first payment is made after several
d. Utility interest if it is invested at 10% periods, after the beginning of the
compounded continuously. payment.
21. What is the principal amount A. P16,550.00 A. Perpetuity
if the amount of interest at the end B. P15,000.00 B. Ordinary annuity
of 2½ year is P4500 for a simple C. P17,492.94 C. Annuity due
interest of 6% per annum? D. P14,242.15 D. Deferred annuity
a. P34,000
b. P32,000 6. 1. With continuous 5 What is the present worth of a
c. P28,000 compounding at 10 percent for 30 P1000.00 annuity over a 10-year
d. P30,000 years, the future value of an initial period, if interest rate is 8%?.
investment of $2,000 is closest to A. P7896.00
22. What is considered as the A. $34,898 B. P8976.00
standard unit which forms the B. $40,171 C. P6234.80
basis of a country’s domestic C. $164,500 D. P6710.00
money supply? D. $328,282
a. Monetary unit 6. Annuity is required over 10
b. Currency 7. What is the value of years to equate to a future amount
c. Foreign exchange the present worth factor if it is of P 15, 000 with i = 5%
d. Cash or check compounded continuously? A. P 1,192.57
A. 1. 272441 B. P 1,180.47
24. An association of two or B. 0.272441 C. P 1,171.37
more individuals for the purpose of C. 1.726419 D. P 1,167.17
engaging business for profit. D. 0.726149
a. Single proprietorship 9. A series of uniform payment
b. Party 8. An engineer borrows $10 000 over an infinite period of time
c. Corporation to buy a personal computer. He A. Annuity Due
d. Partnership must repay $218.94 a month for 5 B. Capitalized cost
years. What is the nominal annual C. Perpetuity
25. A man is required to pay interest rate, based upon D. Uniform Series
P200 at the end of 160 days or continuous compounding?
P190 at the end of 40 days. A. 9% 10. What annuity over a 10-year
Determine the rate of interest. B. 11% period at 8% interest is equivalent
a. 18.4% C. 13% to a present worth of P100,000?
b. 15.8% D. 15% A. P14,903
c. 19.6% B. P15,003
d. 16.4% 9. What is the nominal rate of C. P13,803
interest compounded continuously D. P12,003
1. If the effective rate is 24%, what for 10 years if the compound
nominal rate of interest is charged amount factor is equal to 1. Estimated value of the
for a continuously compounded 1.34986? property at the useful life.
loan? A. 3%
A. 21.51% B. 5% A. Market value
B. 22.35% C. 4% B. Fair value
C. 23.25% D. 6% C. Salvage value
D. 21.90% D. Book value
10. With continuous compounding
2. What is the nominal rate of at 8 percent for 20 years, what is 2. The worth of an asset as
interest compounded continuously the approximate future value of a shown in the accounting records of
for 8 years if the present worth $20,000 initial investment? an enterprise.
factor is equal to 0.6187835? A. $52,000
A. 4% B. $93,219 A. Fair value
B. 6% C. $90,601 B. Par value
6
C. Market value compounded semi-quarterly, and effective annual interest rate of
D. Book value compounded continuously? 7%, what is the total amount
available upon the deposit of the
3. An equipment which cost A. 12.67 yrs ; 11.2 yrs ; 15.05 yrs 6th payment.
P200,000 has a useful life of 8 B. 18.67 yrs ; 11.6 yrs ; 11.24 yrs A. P3576.64
years with a salvage value of C. 16.67 yrs ; 11.6 yrs ; 11.55 yrs B. P3254.12
P25,000 at the end of its useful D. 17.67 yrs ; 10.2 yrs ; 11.45 yrs C. P3351.21
life. If the depreciation at the first D. P3432.90
year is P21,875, what method is 6. A businessman loaned
used in the calculation P500,000 from a local bank How 5. Which is NOT an essential
of depreciation? much is he going to pay at the end element of an ordinary annuity?
of 5 years if it was made at A. The amounts of all payments
12% compound continuously? are equal.
A. Straight Line B. The payments are made at
B. Declining Balance A. P909,066.80 equal interval of time.
C. Sinking Fund B. P913,090.40 C. The first payment is made at the
D. Sum of Years Digit C. P911,059.20 beginning of each period.
4. Depreciation is: D. P915,078.60 D. Compound interest is paid on all
amounts in the annuity
7. Compute the interest for an
A. An income amount of P200,000 for a period of 1. Which of the following
B. An asset 8 years, If it was made at 16% statements is TRUE? (Assume
C. A loss compounded continuously. that the yearly cash flows are
D. A liability A. P519,327.95 identical for both annuities and that
5. Process of becoming out of B. P517,538.91 the common interest rate is greater
date or obsolete is termed as: C. P521,511.93 than zero.)
D. P515,701.97 A. The present value of an annuity
A. Physical deterioration due is greater than the present
9. How many years does it take value of an ordinary annuity.
B. Depletion an investment of $9813.99 to grow
C. Obsolescence B. The present value of an
to $22466.89 if the investment ordinary annuity is greater than the
D. Amortization earns 8.46% APR compounded present value of an annuity due.
6. An equipment costs P10,000 continuously. C. The future value of an ordinary
with a salvage value of P500 at the A. 5.41 years annuity is greater than the future
end of 10 years. Calculate the B. 7.30 years value of an annuity due.
annual depreciation cost by sinking C. 7.01 years D. Both B and C are correct.
fund method at 4% interest. D. 9.79 years
8. Find the periodic payment of
10. Find the future value of an a(n) 6-year annuity if the present
A. P721.54 investment if the present value is
B. P724.56 value is $46898.90 and the annuity
$1004.31 and the investment earns 8.33% APR compounded
C. P791.26 earns 5.69% APR for 2 years
D. P721.76 quarterly
compounded continuously. A. $2502.83
9. Asset which have a limited A. $2988.92 B. $1526.17
useful life are termed as: B. $896.29 C. $3205.87
C. $1020.62 D. $1382.82
A. Limited assets D. None of the above
B. Depreciation asset 9. Auto loan requires payments
C. Unlimited asset 1. Money borrowed today is to of $300 per month for 3 years at a
D. None of these be paid in 6 equal payments at the nominal annual rate of 9%
end of each of 6 quarters. If the compounded monthly. What is the
10. Depreciation value of an interest is 12% compounded present value of this loan and the
asset is equal to: quarterly, how much was initially accumulated value at its
borrowed if quarterly payment is conclusion?
A. Cost + Scrap value P2000.00? A. $12,345.81
B. Cost + Market price A. P10,834.38 B. $11,287.42
C. Cost – Scrap value B. P11,213.17 C. $10,139.68
D. None of these C. P10,231.13 D. $13,840.55
D. P11,000.28
10. What is the present worth of
2. A man borrowed P200,000.00 a P100 annuity starting at the end
4. If the bank pays 7% per year, of the third year and continuing to
from a bank at 12% compounded
compounded continuously, how the end of the fourth year, if the
monthly, which is payable monthly
much money will have annual interest rate is 8%?
for 10 years (120 payments). If the
accumulated at the end of 20 A. P153.98
first payment is to be made after 3
years, Calculate the factors F/A? B. P156.97
months, how much is the monthly
A. 42.14 C. P152.89
payment
B. 41.14 D. P150.78
A. P2,327.10
C. 43.14 B. P2,527.10
D. 40.14 1. The original cost of a certain
C. P2,727.10
machine is P150,000 and has an
5. How long would it take your D. P2,927.10
economic life of 8 years with a
money to double itself if it is salvage value of P9,000 at that
4. If P500 is invested at the end
invested at 6% simple interest, time. If the depreciation of the first
of each year for 6 years, at an
7
year is equal to P44,475, what annual depreciation cost by sinking 6. A man borrowed P100,000 at
method is used in the calculation fund method at 8% interest. the interest rate of 12% per
of the depreciation? A. P3123.53 annum, compounded quarterly.
B. P3223.75 What is the effective rate?
A. Straight Line C. P3434.22 A. 12.75%
B. Declining Balance D. P3241.24 B. 12.55%
C. Sinking Fund C. 12.45%
D. Sum of Years Digit 9. ABC Corporation makes it D. 12.35%
Option 5 policy that for every new
equipment purchased, the annual 7. What is the effective
2.The worth of the property which depreciation should not exceed rate corresponding to 18%
is equal to the original cost less the 20% of the first cost at any time compounded daily? Take 1 year is
amount which has been charged to without salvage value. Determine equal to 360 days.
depreciation. the length of service if the A. 20.13%
depreciation used is the SYD B. 17.55%
A. Scrap value Method. C. 18.29%
B. Salvage value A. 20 years D. 19.72%
C. Book value B. 22 years
D. Market value C. 19 years 8. An interest rate is quoted as
D. 21 years being 7.5% compounded quarterly.
3. An equipment costs P480,000 What is the effective annual
and has a salvage value of 10% of 10. A machine having a certain interest rate?
its cost at the end of its economic first cost has a life of 10 years and A. 7.91%
life of 35,000 operating hours. In a salvage value of 6.633% of the B. 7.51%
the first year, it was used for 4,000 first cost at the end of 10 years. If it C. 7.71%
hours. Determine its book value at has a book value of P58,914 at the D. 7.31%
the end of the first year. end of the 6thyear, how much is
A. P430,629.00 the first cost of the machine if the 9. What interest compounded
B. P418,360.00 constant percentage of declining monthly is equivalent to an interest
C. P380,420.00 value is used in the computation rate of 14% compounded
D. P376,420.00 for its depreciation.(Matheson’s quarterly?
Method) A. 13.84%
4. Under the straight line method A. P280,000 B. 14.01%
of providing depreciation it: B. P300,000 C. 13.89%
C. P320,000 D. 14.07%
A. Increase every year. D. P340,000
B. Remain constant every year. 11. Mrs. Carter deposits P100 in
C. Decreases every year 1. The worth of an asset as the bank at the end of each month,
D. None of them. shown in the accounting records of 7% per year, compounded
an enterprise. continuously, how much money
5. The first cost of a machine is a. Fair value will she have accumulated at the
P1,800,000 with a salvage value of b. Par value end of 5 years?
P300,000 at the end of its life of 5 c. Market value A. P7,043.58
years. Determine the total d. Book value B. P7,163.56
depreciation after 3 years. Using C. P7,203.11
Sum of Years Digit Method 3. A series of uniform payment D. P7,113.23
A. P1,150,000 over an infinite period of time
B. P1,300,000 a. Depletion 12. An amount of P50,000 was
C. P1,200,000 b. Capitalized cost invested for 3 years. Compute its
D. P1,350,600 c. Perpetuity interest if it is invested at 10%
d. Inflation compounded continuously.
6. Depreciation arises because A. P16,550.00
of: 4. A VOM has a selling price of P B. P15,000.00
400. If its selling price is expected C. P17,492.94
A. Fall in the market value of an to decline at a rate of 10% per D. P14,242.15
asset. annum due to obsolescence, what
B. Physical wear and tear. will be its selling price after 5 13. A savings account pays 5.5%
C. Fall in the value of money. years? per year, compounded
D. None of them. a. P 222.67 continuously. How much money
b. P 212.90 must be deposited at the end of
7. It is an amount which a willing c. P 236.20 each month in order to accumulate
buyer will pay to a willing seller for d. P 231.56 P10,000 at the end of 7 years?
the property where each has equal A. P94.92
advantage and is under no 5. Which of the following is an B. P97.82
compulsion to buy or sell. accelerated depreciation method? C. P98.90
a. Straight line method and sinking D. P92.88
A. Book value fund method
B. Market value b. Straight line method and double 14. Find F/A, with r = 3% , n =
C. Use value declining balance method 0.75 year and p = 52 payment
D. Fair value c. Double declining balance periods per year:
method and SYD method A. 39.58
8. An equipment costs P50,000 d. SYD method and sinking fund B. 39.72
with a salvage value of P250 at the method C. 39.43
end of 10 years. Calculate the D. 39.21

8
16. A 5-year ordinary annuity has depreciation should not exceed 7. It is the worth of a property as
a future value of P1,000. If the 20% of the first cost at any time recorded in the book of an
interest rate is 8 percent, the without salvage value. Determine enterprise.
amount of each annuity payment the length of service if the a. Salvage value
is closest to which of the following? depreciation used is the SYD b. Price
A. P250.44 Method. c. Book value
B. P231.91 A. 20 years d. Scrap value
C. P184.08 B. 22 years
D. P170.44 C. 19 years 8. Compute the equivalent rate
D. 21 years of 6% compounded semi-annually
17. A contractor bought a to a rate compounded quarterly.
concrete mixer at P120,000.00 if 2. A man bought an equipment a. 5.12%
paid in cash. The mixer may also costing P30,000 payable in 12 b. 5.96%
be purchased by installment to be quarterly payments, each c. 5.78%
paid within 5 years. If money is installment payable at the d. 6.12%
worth 8%, the amount of each beginning of each period. The rate
annual payment, if all payments of interest is 24% compounded 9. The type of annuity where the
are made at the beginning of each quarterly. What is the amount of first payment is made after several
year, is: each payment periods, after the beginning of the
A. P27,829.00 a. P 1,700 payment.
B. P29,568.00 b. P 2,700 a. Perpetuity
C. P31,005.00 c. P 3,700 b. Ordinary annuity
D. P32,555.00 d. P 4,700 c. Annuity due
d. Deferred annuity
20. Find the future value of a(n) 3. A telecommunication company
4-year annuity if the periodic purchased an equipment for 11. The amount that the property
payment is $266.13 and the P53,000 and paid P1,500 for would give if sold for junk.
annuity earns 8.63% APR freight and delivery charges to the a. Junk value
compounded semi-annually. job site. The equipment has a b. Salvage value
A. $2479.88 normal life of 10 years with a c. Scrap value
B. $2966.08 trade-in value of P5,000 against d. Book value
C. $2204.10 the purchase of a new equipment 12. If P500 is invested at the end
D. $2089.18 at the end of the life. Determine of each year for 6 years, at an
the annual depreciation cost by the effective annual interest rate of
21. Depreciation is a process of: sinking fund method. Assume
A. Valuation 7%, what is the total amount
interest at 6.5% compounded available upon the deposit of the
B. Allocation annually.
C. Both valuation and allocation 6th payment?
a. P 2,543 a. P3576.64
D. None of them. b. P 3,668 b. P3254.12
22. Total depreciation cannot c. P 4,215 c. P3351.21
exceeds its: 4. A plant bought a machine for d. P3432.90
A. Scrap value P200,000 and used it for 10years,
B. Cost value the life span of the equipment. 14. Estimated value of the
C. Market value What is the book value of the property at the useful life.
D. Depreciable value machine after 5 years of use? a. Market value
Assume a scrap value of P20,000. b. Fair value
23. A machine has a salvage Use double declining balance c. Salvage value
value of P12,000 at the end of its method. d. Book value
useful life of 6 years. The book a. P43,648
value at the end of 5 years is b. P59,425 15. A bank is advertising 9.5%
P30,833.33. Using a straight line c. P65,536 accounts that yields 9.84%
method of depreciation, What is d. P70,923 annually. How often is the interest
the first cost of the machine? compounded?
A. P120,000 5. ____ is the loss of value of the a. monthly
B. P125,000 equipment with use over a period b. quarterly
C. P130,000 of time. It could mean a difference c. bi-monthly
D. P135,000 in value between a new asset and 16. What annuity over a 10-year
the use asset currently in a period at 8% interest is equivalent
24. A hydraulic machine cost service. to a present worth of P100,000?
P180,000 and has a salvage value a. Loss a. P14,903
of P15,000 at the end of its useful b. Depreciation b. P15,003
life which is 12 years. Calculate c. Extracted c. P13,803
the depreciation at the first year, d. Gain d. P12,003
Assume money is worth 6%
annually. 6. Convert 12% compounded 17. It is sometimes called the
A. P9,820.71 semi-annually to x% compounded second hand value
B. P9,700.71 quarterly. a. Scrap value
C. P9,740.71 a. 11.83% b. Salvage value
D. P9,780.71 b. 11.94% c. Book value
c. 11.88% d. Par value
25. ABC Corporation makes it d. 12.03%
policy that for every new 18. Mr. Pablo Cruz borrows P
equipment purchased, the annual 100,000 at 10% compounded
annually, agreeing to repay the
9
loan in twenty equal annual B. First cost + Interest of the first 1. A method of determining
payments. How much of the cost when cost exactly equal to
original principal is still unpaid after C. Annual cost revenue.
he has made the tenth payment? D. First cost + Salvage value A. Experimental method
a. P 62,663.83 B. Break-even method
b. P 68,233.10 3. What bond whose security is a C. Break-odd method
c. P 72,173.84 mortgage on certain specified D. Capitalized Method
d. P 76,290.73 assets of the corporation?
A. Registered bond 2. The annual maintenance cost
19. An Asset is purchased for P B. Collateral trust bond of a machine shop is P69,994. If
9,000.00 Its estimated economic C. Mortgage bond the cost of making a forging is P56
life is 10 years after which it will be D. Debenture bond per unit and its selling price is
sold for P 1000.00 Find the P135 per forged unit, find the
depreciation in the first three years 4. 1. A bond without any security number of units to be forged to
using sum of years digit method. behind them except a promise to break-even.
a. P 3,927.27 pay by the issuing corporation is
b. P 2,890.12 called ______. A. 892
c. P 3,278.01 A. Joint bond B. 870
d. P 3,578.10 B. Debenture bond C. 886
C. Trust bond D. 862
20. This consists of a cash and D. Common bond
account receivable during the next 3. The annual maintenance cost
period or any other material which 5. Capitalized cost of a project is of a machine is P70,000. If the
will be sold also known as ______. cost of making a forging is P56
a. Fixed assets A. Infinite cost and its selling price is P125 per
b. Deferred charges B. Life cycle cost forged unit. Find the number of
c. Current asset C. Life cost units to be forged to breakeven.
d. Liability D. Project cost A. 1,000
B. 1,012
23. A man loan P2000 from the 6. 1. Value of a bond just C. 1,015
bank. How long would it take in depends on the interest payment is D. 1,018
years for the amount of the loan offers.
and interest to equal P3280 if it A. True 4. The amount received from the
was made at 8% compounded B. False sale of an addition unit of a
continuously. C. Both a and b product.
a. 5.18 years D. None of these A. Marginal cost
b. 6.18 years B. Marginal revenue
7. What is defined as a financial C. Extra profit
c. 4.18 years security note issued by business or
d. 7.18 years D. Prime cost
corporation and by the government
24. The right and privilege as a means of borrowing long-term 5. Which of the following are
granted to an individual or fund? characteristics of Break Even
corporation to do business in a A. T-bills Point?
certain region. B. Securities A. There is no loss and no profit to
a. Permit C. Bond the firm.
b. Royalty D. Bank notes B. Total revenue is equal to total
c. License cost.
8. It is an application of C. Contribution is equal to fixed
d. Franchise perpetuity. cost.
25. An engineer borrows $10 A. Capitalized cost D. All of the above.
000 to buy a personal computer. B. Machine cost
He must repay $218.94 a month C. Annual cost 6. Using equation method, Break-
for 5 years. What is the nominal D. Equipment cost even point is calculated as
annual interest rate, based upon A. Sales = Variable expenses +
9. An item is purchased for Fixed expenses + Profit
continuous compounding? P100,000. Annual cost is P18,000.
a. 9% B. Sales = Variable expenses +
Using interest rate of 8%, what is Fixed expenses - Profit
b. 11% the capitalized cost of perpetual
c. 13% C. Sales = Variable expenses -
service? Fixed expenses + Profit
d. 15% A. P310,000 D. None of the above
1. What is normally used to B. P315,000
compare alternatives that C. P320,000 7. What will be the impact on
accomplish the same purpose but D. P325,000 Break-Even Point if fixed cost is
have unequal lives? increased?
10. At 6%, find the capitalized A. Decrease
A. Capitalized cost method cost of a bridge whose cost is
B. Present worth method B. No change
P250M and life is 20 years, if the C. Increase
C. Annual cost method bridge must be partially rebuilt at a
D. MARR D. None of the above
cost of P100M at the end of each
2. Capitalized cost of any 20 years. 8. The breakeven point is
property is equal to the: A. P297,308,323.10 obtained at intersection of
A. First cost + Cost of perpetual B. P298,308,323.10 A. Total revenue and Total cost
maintenance C. P296,308,323.10 line
D. P295,308,323.10 B. Total cost and variable cost line
C. Variable cost and fixed cost line
10
D. Fixed cost and total cost line 4. What type of bond whose
7. Which is a form of guaranty is in lien on railroad
9. Steel drum manufacturer equipment, such as freight and
business/company ownership?
incurs a yearly fixed operating cost passenger cars, locomotives, etc.?
of $200,000. Each drum A. partnership A. Railroad bond
manufactured cost $160 to B. corporation B. Equipment obligation bond
produce and sells $200. What is C. single proprietorship C. Equipment bond
the manufacturer’s break-even D. all of the list D. Equipment trust bond
sales volume in drums per year?
A. 5,031 8. One of the Limitations of 5. What type of bond where the
B. 5,017 corporation’s owner name are
C. 5,043 Corporate is/are? recorded and the interest is paid
D. 5,000 periodically to the owners with their
A. Employment Generation asking for it?
10. 1. The Break-even Point of a B. Profit for public welfare A. Preferred bond
company is that level of sales C. Absence of Profit Incentive B. Registered bond
income which will equal the sum of D. Balance Economic Growth C. Incorporators bond
its fixed cost. D. Callable bond
A. True 9. What refers to the value of an
b. false 6. What type of bond which can
c. both a and b intangible item which arises from be redeemed before maturity
d. none of these the exclusive right of a company to date?
A. Preferred bond
1. The long-run objective of provide a specified product and B. Registered bond
C. Incorporators bond
financial management is to: service in a certain region of the
D. Callable bond
country?
A. maximize earnings per share. 7. An engineer buys a machine
B. maximize the value of the firm's A. Company value costing P500,000. Compute the
common stock. B. Going value capitalized cost if the machine has
C. maximize return on investment. C. Goodwill value a life of 5 years and a salvage
D. maximize market share D. Franchise value value of P80,000. Rate of interest
is 12% per annum.
2. The basic requirement for a 10. Which is true about A. P2,424,732
B. P1,050,934
firm's marketable securities. corporation? C. P2,431,643
A. Safety D. P5,124,153
A. It is worse type of business
B. Yield organization. 8. The value of a bond and
D. All of the above B. The minimum number of debenture is
incorporators to start a corporation A. Present value of interest
4. What is the simplest form of is three. payments it gets
C. Its life is dependent on the lives B. Present value of contractual
business organization? of the incorporators. payments it gets till maturity
A. Sole proprietorship D. The stock holders of the C. Present value of redemption
B. Partnership corporation are only liable to the amount
C. Enterprise extent of their investments. D. None of the above
D. Corporation 1. The first cost of a certain 9. A bond issued and supported
equipment is P324,000 and a only by the general credit standing
5. Which is true about salvage value of P50,000 at the of the issuing corporation is called
end of its life of 4 years. If money a(an):
partnership?
is worth 6% compounded annually, A. debenture
A. It has a perpetual life. find the capitalized cost. B. indenture
B. It will be dissolved if one of the A. P540,090.34 C. term bond
partners ceases to be connected B. P541,033.66 D. serial bond
with the partnership. C. P540,589.12
C. It can be handed down from D. P541,320.99 10. Which of the following
one generation of partners to statements is not true?
2. Cash money credit necessary A. every bond has a face amount
another.
to establish and operate an B. every bond has a maturity date
D. Its capitalization must be equal
enterprise. C. every bond has a bond rate of
for each partner.
A. funds interest
B. capital D. every bond is a coupon bond
6. An association of two or more C. liabilities
D. assets 1. The condition in which the
persons for the purpose of
total income equals the total
engaging into a business for profit 3. What type of bond is issued operating expenses.
jointly by two or more A. Tally
is called ______. corporations? B. Par value
A. Entrepreneurship A. Mortgage bond C. Check and balance
B. Partnership B. Joint bond D. Break even
C. Proprietorship C. Tie-up bond
D. Trust bond 2. A manufacturer produces
D. Corporation certain items at a labor cost of
11
P115 each, material cost of P76 D. Operating cost 4. The Following are Advantages
each and variable cost of P2.32 of Sole Proprietorship, Except
each. If the item has a unit price of 8. Compute the number of blocks __________
P600, how many units must be that an ice plant must be able to A. Secret of Trade
manufactured each month for the sell per month to break even B. Uncertain life of Business
manufacturer to break even if the based on the following data: Cost C. Undivided Profit
monthly overhead is P428,000. of electricity per block – P20.00 , D. Prompt decision making
A. 1,033 Tax to be paid per block – P2.00 ,
B. 1,037 Real Estate Tax – P3,500.00 per 5. What refers to the residual
C. 1,043 month , Salaries and Wages – value of a company’s assets after
D. 1,053 P25,000.00 per month , Others – all outside liabilities (shareholders
P12,000.00 per month , Selling excluded) have been allowed for?
3. The sum of all the costs price of ice – P55.00 per block A. Dividend
necessary to prepare a A. 1,220 B. Equity
construction project for operation. B. 1,224 C. Return
A. Operation costs C. 1,228 D. Par value
B. Construction cost D. 1,302
C. Depletion cost 6. Which of the following is a form
D. Production cost 9. A certain firm has the of business/company ownership?
capacity to produce 650,000 units 6. Which of the following is a form
4. A manufacturer produces of product per year. At present, it is of business/company ownership?
certain items at a labor cost per operating at 62% capacity. The B. corporation
unit of P315, material cost per unit firm’s annual income is C. single proprietorship
is P100, variable cost of P3.00 P4,160,000.00. Annual fixed costs D. all of these
each. If the item has a selling price are P1,920,000.00 and the
of P995, how many units must be variable costs are equal to P3.56 7. Which is NOT a type of
manufactured each month for the per unit of product. What volume of business organization?
manufacturer to breakeven if the sales does the firm breakeven? A. Sole proprietorship
monthly overhead is P461,600? A. P3,354,680 B. Corporation
A. 782 B. P3,534,880 C. Enterprise
B. 800 C. P3,155,690 D. Partnership
C. 806 D. P3,254,680 8. The following are the
D. 812 Characteristic of Economic Goals,
10. The addition cost of producing
4. Which of the following are one more unit is Except?
assumptions for break-even A. Prime cost A. Good work environment
analysis? B. Marginal cost B. Profit Margin
1) Elements of cost cannot be C. Differential cost C. Shareholder satisfaction
divided in different groups. D. Sunk cost D. Customer Satisfaction
2) Fixed cost remains certain from 9. It is a limited liability entity that
zero production to full capacity. 1. A form of business
organization in which a person can organize for- profit or not-for-
3) Behavior of different costs is profit.
linear conducts his business alone and
entirely for his own profit, being A. Corporation
4) Selling per price unit remains B. Partnership
constant solely responsible for all its
activities and liabilities. C. Department
A. 1, 2, 3 D. Co-operatives
B. 2, 3, 4 A. Sole proprietorship
C. 1, 3, 4 B. Entrepreneurship 10. It is a distinct legal entity,
D. 1, 2, 4 C. Partnership separate from individuals who own
D. Corporation it and which can engage in
6. XYZ Corporation practically any business
manufactures bookcases that sell 2. In case of bankruptcy of a
partnership, transaction which real person can
for P65.00 each. It costs XYZ do.
corporation P35,000 per year to A. The partners are not liable for
the liabilities of the partnership A. Partnership
operate its plant. This sum B. Single proprietorship
includes rent, depreciation charges B. The partnership assets
(excluding the partners personal C. Eternal Life
on equipment, and salary D. Physical life
payments. If the cost to produce assets) only will be used to pay the
one bookcase is P50.00, how liabilities 1. It is sometimes called the
many cases must be sold each C. The partners personal assets second-hand value
year for XYZ to avoid taking a are attached to the debt of the
loss? partnership a. Scrap value
A. 2,334 D. The partners nay sell stock to b. Salvage value
B. 2,443 generate additional capital c. Book value
Option 3 d. Par value
3. Aggregation of individuals
D. 2,322 formed for the purpose of 2. Mr. Pablo Cruz borrows P
7. The sum of the direct labor conducting a business and 100,000 at 10% compounded
cost incurred in the factory and the recognized by law as a fictitious annually, agreeing to repay the
direct material cost of all materials person is called ______. loan in twenty equal annual
that go into production is called A. Partnership payments. How much of the
A. Net cost B. Investors original principal is still unpaid after
B. Maintenance cost C. Corporation he has made the tenth payment?
C. Prime cost D. Stockholders a. P 62,663.83
12
b. P 68,233.10 C. Variable cost and fixed cost line D. 11.25%
c. P 72,173.84 D. Fixed cost and total cost line
d. P 76,290.73 20. Suppose that $2000 is
13. A manufacturer produces deposited each year, on a
4. A bond without any security certain items at a labor cost of continuous basis, into a savings
behind them except a promise to P115 each, material cost of P76 account that pays 6% per year,
pay by the issuing corporation is each and variable cost of P2.32 compounded continuously. How
called ______. each. If the item has a unit price of much money will have
a. Joint bond P600, how many units must be accumulated after 12 years?
b. Debenture bond manufactured each month for the A. $35,147.77
c. Trust bond manufacturer to break even if the B. $33,741.27
d. Common bond monthly overhead is P428,000. C. $34,747.31
A. 1,033 D. $31,774.47
6. A type of bond where the B. 1,037
corporation pledges securities C. 1,043 21. The Following are
which it owns such as the stock or D. 1,053 Advantages of Sole Proprietorship,
bonds of one of its subsidiaries. Except __________
A. Mortgage bond 14. What will be the impact on A. Secret of Trade
B. Joint bond Break-Even Point if variable costs B. Uncertain life of Business
C. Security bond are reduced? C. Undivided Profit
D. Collateral trust bond A. Decrease D. Prompt decision making
B. No change
7. The price at which the callable C. Increase 22. ____________
bond will be redeemed from the D. None of the above and____________ carry a fixed
bondholder is called ______. rate of interest and are to be
A. Par value 15. The following assumptions paid off irrespective of the firm’s
B. Call value are made in case of break even revenues.
C. Face value analysis, except A. Debentures, Dividends
D. Redemption value A. All fixed costs are fixed B. Debentures, Bonds
B. All variable costs are fixed C. Dividends, Bonds
8. If the coupon rate is constant, C. The prices of input factors are D. Dividends, Treasury notes
the value of bond when close to constant
maturity will be D. Volume of production and 23. The amount of company’s
A. Issued value volumes of sales are equal profit that the board of directors of
B. Par value the corporation decides to
C. Redemption value 16. The annual maintenance distribute to ordinary shareholders
D. All of the above cost of a machine shop is P69,994. called____
If the cost of making a forging is A. Dividend
9. A man planned of building a P56 per unit and its selling price is B. Return
house. The cost of construction is P135 per forged unit, find the C. Share of stock
P500,000 while annual number of units to be forged to D. Equity
maintenance cost is estimated at break-even.
P10,000. If the interest rate is 6%, A. 892 24. Intangible assets of a
what is the capitalized cost of the B. 870 corporation or company
house? C. 886 A. dacion-en-pago
A. P666,777.67 D. 862 B. investment
B. P677,666.67 C. patents
C. P677,777.67 17. A man invested P110,000 for D. equity
D. P666,666.67 31 days. The net interest after
deducting 20% withholding tax is 25. Type of ownership in
11.Nike shoes manufacturer P890.36. Find the rate of return business where individuals
produces a pair of Air Jordan annually. exercise and enjoy the right in their
Shoes at a labor cost of P900.00 a A. 11.50 % own interest.
pair and a material cost of P800.00 B. 11.75 % A. Equitable
a pair. The fixed charges on the C. 11.95 % B. Public
business are P5,000,000 a month D. 12.32 % C. Private
and the variable costs are P400.00 D. Pure
a pair. Royalty to Michael Jordan is 18. P200,000 was deposited on
P1,000 per pair of shoes sold. If Jan 1, 1988 at an interest rate of 1. An asset is purchased for
the shoes sell at P5,000 a pair, 24% compounded semi-annually. P500,000.00. The salvage value in
how many pairs must be produced How much would the sum on Jan 25 years is P100,000.00. What is
each month for the manufacturer 1, 1993? the total depreciation in the first
to breakeven? A. P680,270 three years using straight line
A. 2,590 B. P701,223 method?
B. 2,632 C. P621,170 a. P 48,000.00
C. 2,712 D. P546,210 b. P 32,000.00
D. 2,890 c. P 24,000.00
19. Find the nominal rate, which d. P 16,000.00
12. The breakeven point is if converted quarterly could be
obtained at intersection of used instead of 12% compounded 2. The sum of all the costs
semi-annually. necessary to prepare a
A. Total revenue and Total cost A. 11.83% construction project for operation.
line B. 11.09% 1/1
B. Total cost and variable cost line C. 11.65% a. Operation costs
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b. Construction cost 13. What is the value of an asset 21. The breakeven point is
c. Depletion cost after 8 years of use if it obtained at intersection of
d. Production cost depreciation from its original value a. Total revenue and Total cost
of P120,000.00 to its salvage value line
3. An item is purchased for of 3% in 12 years? b. Total cost and variable cost line
P100,000. Annual cost is P18,000. a. P 44,200.00 c. Variable cost and fixed cost line
Using interest rate of 8%, what is b. P 44,020.00 d. Fixed cost and total cost line
the capitalized cost of perpetual c. P 44,002.00
service? d. P 42,400.00 23. A new civil engineer
a. P310,000 produces a certain construction
b. P315,000 15. ____ is the loss of value of material at a labor cost of P16.20
c. P320,000 the equipment with use over a per piece, material cost of P38.50
d. P325,000 period of time. It could mean a per piece and variable cost of
difference in value between a new P7.40 per piece. The fixed charge
4. What interest compounded asset and the use asset currently on the business is P100,000.00
monthly is equivalent to an interest in a se1. It is the worth of a per month. If he sells the finished
rate of 14% compounded property as recorded in the book of product at P95.00 each, how many
quarterly? an enterprise service. pieces must be manufactured in
a. 1.15% a. Loss each month to breakeven?
b. 13.84% b. Depreciation a. 3,045
c. 10.03% c. Extracted b. 3,035
d. 11.52% d. Gain c. 3,030
5. Decreases in the value of a d. 3,040
16. It is the worth of a property
physical property due to the as recorded in the book of an 24. Estimated value of the property
passage of time. enterprise. at the useful life.
a. Deflation a. Salvage value a. Market value
b. Depletion b. Price b. Fair value
c. Declination c. Book value c. Salvage value
d. Depreciation d. Scrap value d. Book value
6. A certain firm has the capacity 17. JRT Industries manufactures 25. It cost P50,000 at the end of
to produce 650,000 units of automatic voltage regulators at a each year to maintain a section of
product per year. At present, it is labor cost of P85.00 per unit and Kennon Road. If money is worth
operating at 62% capacity. The material cost of P350.00 per unit. 10%, how much would it pay to
firm’s annual income is The fixed charges on the business spend immediately to reduce the
P4,160,000.00. Annual fixed costs are P15,000 per month and the annual cost to P10,000?
are P1,920,000.00 and the variable costs are P20.00 per unit. a. P410,000
variable costs are equal to P3.56 If the automatic voltage regulators b. P554,000
per unit of product. What volume of are sold to retailers at P580.00 c. P400,000
sales does the firm breakeven? each, how many units must be d. P453,000
a. P3,354,680 produced and sold per month to
b. P3,534,880 breakeven?
c. P3,155,690 a. 120
d. P3,254,680 b. 124
8. The worth of an asset as c. 128
shown in the accounting records of d. 130
an enterprise. 18. The type of annuity where
a. Fair value the first payment is made after
b. Par value several periods, after the
c. Market value beginning of the payment.
d. Book value a. Perpetuity
10. A series of uniform payment b. Ordinary annuity
over an infinite period of time c. Annuity due
a. Depletion d. Deferred annuity
b. Capitalized cost 19. The first cost of a certain
c. Perpetuity equipment is P324,000 and a
d. Inflation salvage value of P50,000 at the
11. Suppose that you make 12 end of its life of 4 years. If money
equal annual deposits of P2,000 is worth 6% compounded annually,
each into a bank account paying find the capitalized cost.
8% interest per year. The first a. P540,090.34
deposit will be made one year from b. P541,033.66
today. How much money can be c. P540,589.12
withdrawn from this bank account d. P541,320.99
immediately after the 12th 20. The amount that the property
deposit? would give if sold for junk.
a. P 35,492 a. Junk value
b. P 36,21 b. Salvage value
c. P 37,954 c. Scrap value
d. P 38,755 d. Book value
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