Engineering Economics Prelim Summative Test

Which is another term for borrowed funds?

• Loan

• Interest

• Capital

• Principal

What does the upward arrow in a cash flow diagram represent?

• Expenses

• Income

• Time scale

• Total amount

It is the use of goods and services.

• Consumption

• Capital

• Labor

• Entrepreneurship

It deals with the production and consumption of goods and services.

• Economics

• Labor

• Capital

• Entrepreneurship

What does the horizontal line represent in a cash flow diagram?

• Positive cash flow

• Negative cash flow

• Time scale

• Total amount

It is owned by individuals who have invested their money in a business project.

• Equity capital

• Debt capital

• Interest paid

• Interest earned

What does the downward arrow in a cash flow diagram represent?

• Expenses

• Income

• Time scale

• Total amount

Which of the following is obtained from lenders for the purpose of investment?

• Equity capital

• Debt capital

• Interest paid

• Interest earned

These costs do not change over a wide range of activities.

• Fixed costs

• Variable costs

• Incremental costs

• Standard costs

It is a man-made material and is a source of production.

• Labor

• Capital

• Entrepreneurship

• Cost