Quiznetik

Information systems and engineering economics | Set 5

1. Reconsider the project balance table calculated at 10% given in 5.9.:Which of the following statements is correct?

Correct : A. the cash flow in period 3 is $240

2. A newly constructed water treatment facility cost $2 million. It is estimated that the facility will need renovating every 30 years at a cost of $1 million. Annual repairs and maintenance are estimated to be $100,000 per year. At an interest rate of 6%, determine the capitalized cost of the facility.

Correct : B. 3877482

3. Consider the following two investment alternatives:Suppose that your firm needs either machine for only 2 years. The net proceeds from the sale of machine B are estimated to be $200. What should be the required net proceeds from the sale of machine A so that both machines could be considered economically indifferent at an interest rate of 10%?

Correct : C. 750

4. Gene Research, Inc. just finished a 4-year R&D and clinical trials successfully and expects a quick approval from the Food and Drug Administration. If the company markets the product on their own, it requires $30 million immediately (n ⇓ = ⇓ 0) to build a new manufacturing facility, and it is expected to have a 10 year product life. The R&D expenditure in the previous years and the anticipated revenues that the company can generate over the next 10 years is summarized as follows:Merck, a large drug company is interested in purchasing the R&D project and the right to commercialize the product from Gene Research, Inc., immediately (n = 0). What would be a starting negotiating price for the project from Merck? Assume that Gene’s MARR ⇓ = 20%.

Correct : A. $524 million

5. A manufacturing company is considering the purchase of a new CNC lathe, which will cost $60,000 and has an annual maintenance cost of $8,000. A few parts in the lathe need to be replaced once every 5 years to enable smooth running of the lathe. This would cost an additional $20,000 (once every 5 years). Assuming that the lathe would last 15 years under these conditions, what is the total equivalent cost (present value) of this investment at an interest rate of 12%? (Assume that there will be no appreciable salvage value at the end of 15 years.)

Correct : B. 132275

6. A manufacturing company is considering two mutually exclusive machines E1 and E2 with the following cash flow information:Which machine would you recommend if the company needs either machine for only 3 years? Assume a MARR of 12%

Correct : D. project e2

7. Consider a project with a first cost (investment) of $250,000, an annual O&M cost of $50,000, annual revenue of $160,000, and a salvage value of $40,000 after a 10-year life. Find the annual worth of the project assuming an interest of 13% per year.

Correct : D. 66099

8. Find the annual equivalent worth for the following infinite cash flow series at an interest rate of 10%:

Correct : D. 438.6

9. Your firm has purchased an injection molding machine at a cost of $100,000. The machine’s useful life is estimated at 8 years. Your accounting department has estimated the capital cost for this machine at about $25,455 per year. If your firm’s MARR is 20%, how much salvage value do you think the accounting department assumed at the end of 8 years?

Correct : C. 10000

10. You just purchased a pin inserting machine to relieve some bottleneck problems that have been created in manufacturing a PC board. The machine cost $56,000 and has an estimated service life of 5 years. At that time, the estimated salvage value would be $5,000. The machine is expected to operate 2,500 hours per year. The expected annual operating and maintenance cost would be $6,000. If your firm’s interest rate is 15%, what would be the machine cost per hour?

Correct : A. 8.79

11. The following infinite cash flow series has a rate of return of 10%. Determine the unknown value of X.

Correct : D. 90

12. An asset with a first cost of $100,000 is depreciated over 5-year period. It is expected to have a $10,000 salvage value at the end of 5 years. Using the straight-line method, what is the book value at the end of year 2?

Correct : C. 64000

13. The rate of tax that is leivable on STCG arising from transfer of Equity shares of a Company or units of an Equity oriented fund is

Correct : B. 0.15

14. For an employee in receipt of hostel expenditure allowance for his three children, the maximum annual allowance exempt under section 10(14) is ....

Correct : B. rs.7,200

15. For an industrial undertaking fulfilling the conditions, additional depreciation in respect of a machinery costing Rs.10 lakh acquired and installed on October 3, 2005 is

Correct : C. rs.1,00,000

16. A new business was set up on15-11-2008 and it commenced its business from 1-12-2008. The first previous year in this case shall be:

Correct : A. 15-11-2008 to 31-3-2009

17. A person leaves India permanently on 15-11-2008.The assessment year for income earned till 15-11-2008 in this case shall be :

Correct : B. 2008-09

18. Group of assets falling within a class of assets comprising of tangible & intangible assets is known as :

Correct : B. b. block of assets

19. Depreciation available, if asset is used for less than 180 days during the year of acquisition shall be of block rate:

Correct : A. 50%

20. If the Plant & Machinery is used for less than 180 days in the year of its acquisition, then, at what rate the depreciation on that asset should be provided under section 32?

Correct : A. 7.5%

21. If the Computer is purchased on 11th May, 2018 then at what rate depreciation will be provided on it?

Correct : B. 40%

22. If the machinery is purchased on 4th October, 2018 then at what rate depreciation will be provided on it?

Correct : B. 7.5%

23. The transfer of one or more undertakings as a result of the sale for a lump sum consideration without values being assigned to the individual assets and liabilities in the sale is known as :

Correct : B. slump sale

24. What is the rate of depreciation charged on computer software?

Correct : B. 15%

25. _______Rate of depreciation chargeable on fully temporary wooden structure for the assessment year 2019-20 is

Correct : D. 40%

26. Rate of depreciation chargeable on temporary wooden structure for the assessment year 2019- 20 is

Correct : A. 40%

27. DS acquired a building for Rs. ` 15 lakh in June, 2016 in addition to cost of land beneath the building of ` 3 lakh. It was used for personal purposes until he commenced business in June, 2018 and since then it was used for business purposes. The amount of depreciation eligible in his case for the assessment year 2019-20 would be -

Correct : C. rs.37,500

28. XYZ Ltd is engaged in production of textile articles. Opening WDV of the block of assets was Rs.` 15, 00,000. During the year, plant was acquired under this block on 15th June 2018 amounting to Rs.` 10, 00,000. One of the asset falling within the block was sold for Rs. ` 5, 50,000 on 14-01- 2019. Rate of depreciation of the block is 15%. Calculate the total amount of depreciation including additional depreciation available during the previous year for the block. c

Correct : B. rs.`4,92,500

29. What is the rate of depreciation charged on computer software?

Correct : A. 40%

30. Your accounting records indicate that an asset in use has a book value of $8,640. The asset cost $30,000 when it was purchased, and it has been depreciated under the 5 MACRS method. Based on the information available, determine how many years the asset has been in service.

Correct : D. 3 years

31. Which of the following statements is correct?

Correct : C. when determining the cost basis for an asset’s depreciation, you must include all the costs that were incurred to keep the asset in operable condition.

32. Which of the following statements is correct?

Correct : B. no matter which depreciation method you adopt, total tax obligations over a project’s life remain unchanged.

33. You purchased a computer system which cost $50,000 5 years ago. At that time, the system was estimated to have a service life of 5 years with salvage value of $5,000. These estimates are still good. The property has been depreciated according to a 5 year MACRS property class. Now (at the end of year 5 from purchase) you are considering selling the computer at $10,000. What book value should you use in determining the taxable gains?

Correct : B. 5760

34. Gilbert Corporation had a gross income of $500,000 in tax year 1, $150,000 in salaries, $30,000 in wages, $20,000 in interest, and $60,000 in depreciation expenses for an asset purchased 3 years ago. Ajax Corporation has a gross income of $500,000 in tax year 1, and $150,000 in salaries, $90,000 in wages, and $20,000 in interest expenses. Apply the current tax rates and determine which of the following statements is correct.

Correct : C. ajax corporation will have a larger net cash flow than gilbert in year 1.

35. A company purchased an industrial fork-lift for $75,000 in year 0. The company expects to use it for the next 7 years after which it plans to sell it for $10,000. The estimated gross income and expenses excluding depreciation for the first year are given below. The fork-lift will be depreciated according to a 5-year MACRS.:Determine the average tax rate applicable in the first year of operation, using the current corporate tax rate schedule.

Correct : B. 0.1731

36. What effect would have on the break-even point and expected profit if there is an increase in fixed cost?

Correct : B. (increase, decrease)

37. What effect would have on the break-even point and expected profit if there is an increase in labor cost?

Correct : C. (increase, decrease)

38. What effect would have on the break-even point and expected profit if there is an increase in unit price?

Correct : B. (decrease, decrease)

39. What effect would have on the break-even point and expected profit if there is an increase in financing cost?

Correct : B. (increase, decrease)

40. What effect would have on the break-even point and expected profit if there is an increase in sales expense?

Correct : C. (increase, decrease)

41. Which of the following statements is most correct?

Correct : C. whenever a project requires an investment in working capital, the profitability of the project will be affected negatively.

42. Bureaucracy theory means

Correct : C. a hierarchy of command based on a rational-legal authority structure

43. An in depth study on a single organisation using a variety of data collection methods is known as

Correct : A. case study

44. The method of research that gathers data about perceptions, feelings, opinions through interviews and questionnaires in their actual work setting is known as

Correct : B. field survey

45. The consistency of data obtained from a particular research method is known as

Correct : A. reliability

46. The degree to which a research method actually measures what it is supposed to measure is known as

Correct : B. validity

47. A method of helping is to understand management and organisational behaviour is to look at that has been done before

Correct : B. research

48. What must entrepreneurs and leaders learn in order to have a successful organisation?

Correct : B. how to think strategically, influence people, develop organisational systems

49. Organisational success in providing a service or a product depends on

Correct : D. the product or service being valued by a segment of society

50. An organisation's mission is

Correct : D. all of the above

51. Which must be accomplished first by the entrepreneur or leader?

Correct : C. making viable the concept for which the organisation was founded

52. Definable groups of people who have an economic and/or social interest in the organisation are called

Correct : A. stakeholders

53. Governance policies, rules, as well as authority structures apply to which key resource element of the organisation?

Correct : C. organisation

54. Productivity is a ratio of outputs (products or services) to .

Correct : C. inputs consumed

55. "Doing the right things" is referred to as .

Correct : A. effectiveness

56. Revitalization involves the strategies, resources, technology, and skills of the organisation.

Correct : D. renewing

57. What is the relationship between satisfaction and productivity, as suggested by research?

Correct : D. productivity often leads to satisfaction

58. Satisfaction is defined as positive feelings people have about an organisation whether as a/an

Correct : A. supplier, employee, customer, or regulator

59. Management is the practice of

Correct : C. directing, organizing, and developing people, technology, and financial resources

60. Productivity ultimately depends on both

Correct : A. efficiency and effectiveness

61. What is planning?

Correct : A. the process of establishing objectives and specifying how they are to be accomplished in an uncertain future

62. What is the process of managerial control or controlling?

Correct : B. the process of evaluating whether outcomes match objectives and, if not, taking corrective action

63. What is competitive strategy?

Correct : D. planning actions at the line of business level about where and how to compete

64. The process of strategic thinking most involves what?

Correct : D. determining a workable fit between organisational competencies and limitations on the one hand and opportunities and threats on the other

65. At what organisational level is it necessary to balance strategic actions with environmental and resource conditions?

Correct : D. all of the above

66. When setting key objectives, managers first seek to articulate

Correct : C. mission consistent measurable results to be achieved within a specified future time frame

67. Managing strategy involves the craft of

Correct : B. balancing stability and consistency over time with changes when needed

68. An organisation's plans are usually most specific at what level?

Correct : D. they should be essentially equal in specificity at all levels of the organisation

69. When control systems are used to their fullest, they

Correct : B. lead to continuous improvement

70. operational decisions are

Correct : C. both a and b

71. FOIS stands for

Correct : A. freight operation information system

72. CMS stands for

Correct : B. crew management system

73. Management information systems (MIS)

Correct : D. use the transaction data to produce information needed by managers to run the business

74. The term used to describe those people whose jobs involve sponsoring and funding the project to develop, operate, and maintain the information system is

Correct : C. systems owner

75. If a university sets up a web-based information system that faculty could access to record student grades and to advise students, that would be an example of a/an

Correct : B. intranet

76. Which of the following is not a technology driver for an information system?

Correct : C. knowledge asset management

77. Information systems that support the business functions that reach out to suppliers are known as:

Correct : A. back office information systems

78. Which is not a typical business function?

Correct : B. benefits and compensation

79. IT has impacts as

Correct : D. all of the above

80. A centralised system keeps decision making firmly at the top of the hierarchy

Correct : A. true

81. Centralised IT management system has

Correct : A. inadequate control over the organization

82. Decentralised IT management system has

Correct : B. considerable control over the organization

83. Centralised IT management system has

Correct : A. vertical communication flow

84. Decentralised IT management system has

Correct : B. open tree communication flow

85. In Centralised IT management system, power of decision making:

Correct : A. lies with top management

86. In Deentralised IT management system, power of decision making:

Correct : B. multiple person have the power

87. Virus:

Correct : C. both a and b

88. The IT infrastructure consists of broad categories of components:

Correct : D. all of the above

89. RFID stands for

Correct : B. radio frequency identification

90. NMEICT stands for:

Correct : A. national mission on education through ict

91. A new Laptop has been produced that weighs less, is smaller and uses less power than previous Laptop models.Which of the following technologies has been used to accomplish this?

Correct : D. solid state hard drive

92. Who among the following had established UIDAI by passing Aadhaar Act, 2016

Correct : B. government of indi

93. When was UIDAI established as Statutory Authority under Ministry of Electronics and I.T ?

Correct : D. 12th july, 2016

94. Why was UIDAI created ?

Correct : D. both 1 & 2

95. When was the Aadhaar Enrolment /Update Regulation 2016 published in official gazettee

Correct : D. 12th september 2017

96. What is the process of capturing resident data both Demographic and Biometric for generation of Aadhaar called?

Correct : B. enrolment

97. is any entity authorised or recognised by the Authority for the purpose of enrolling individuals through Enrolment Agency.

Correct : D. registrar

98. The Verifier/Certifier is the personnel appointed by for verification of documents at enrolment centres.

Correct : C. registrars

99. is the place where the Aadhaar Enrolment/Update is conducted by Certified Operator/Supervisor

Correct : A. enrolment center

100. is a certified personnel employed by Enrolment Agencies to execute the process of enrolment /update at the enrolment centers

Correct : B. enrolment supervis