Related Mcqs:

1. A reactor having a salvage value of Rs. 10000 is estimated to have a service life of 10 years. The annual interest rate is 10%. The original cost of the reactor was Rs. 80000. The book value of the reactor after 5 years using sinking fund depreciation method will be Rs _____________?

   A. 40,096
   B. 43,196
   C. 53,196
   D. 60,196

2. The amount of simple interest during ‘n’ interest period is (where, i = interest rate based on the length of one interest period, p = principal) ?

   A. p.i.n.
   B. p(1 + i.n)
   C. p(1 + i)n
   D. p(1 – i.n)

3. If ‘S’ is the amount available after ‘n’ interest periods for an initial principal ‘P’ with the discrete compound interest rate ‘i’, the present worth is given by__________________?

   A. (1 + i)n/S
   B. S/(1 + i)n
   C. S/(1 + in)
   D. S/(1 + n)i

4. An annuity is a series of equal payments occuring at equal time intervals, and this amount includes the sum of all payments plus interest, if allowed to accumulate at a definite rate of interest from the time of initial payment to the end of annuity term. Ordinary annuity is used in the calculation of the__________________?

   A. Manufacturing cost
   B. Depreciation by sinking fund method
   C. Discrete compound interest
   D. Cash ratio

5. A present sum of Rs. 100 at the end of one year, with half yearly rate of interest at 10%, will be Rs ?

   A. 121
   B. 110
   C. 97
   D. 91

6. ‘P’ is the investment made on an equipment, ‘S’ is its salvage value and ‘n is the life of the equipment in years. The depreciation for Rath year by the sum-of year‟s digit method will be____________________?

   A. (P – S)/n
   B. 1 – (P/S)1/m
   C. (m/n) (P – S)
   D. [2 (n – m + 1)/n(n + 1)]. (P – S)

7. Effective and nominal interest rates are equal, when the interest is compounded__________________?

   A. Annually
   B. Fortnightly
   C. Monthly
   D. Half-yearly

8. The amount of compounded interest during ‘n’ interest periods is_________________?

   A. p[(1+i)n – 1)]
   B. p(1 + i)n
   C. p(1 – i)n
   D. p(1 + in)

9. Nominal and effective interest rates are equal, when the interest is compounded______________?

   A. Quarterly
   B. Semi-annually
   C. Annually
   D. In no case, they are equal

10. An investment of Rs. 1000 is carrying an interest of 10% compounded quarterly. The value of the investment at the end of five years will be ________________?

    A. 1000 (1 + 0.1/4)20
    B. 1000 (1 + 0.1)20
    C. 1000 (1 + 0.1/4)5
    D. 1000 (1 + 0.1/2)5