What type of depreciation is due to the reduction of the phyical ability of an equipment or asset to produce result?
AFunctional depreciation
BDesign depreciation
CPhysical depreciation
DDemand depreciation
ESAS · Question Bank
Engineering Economics
208 of 208 questions match · page 4 of 11. Answer in your head first, then check the solution.
The functional depreciation is sometimes called ____________
ADemand depreciation
BObsolescence
CLife depreciation
DFailure depreciation
What is defined as the reduction of the value of certain natural resources such as mines, oil, timber, quarries, etc. due to the gradual extraction of its contents?
ADepletion
BInflation
CDepreciation
DDeflation
What are the common methods of computing depletion charge?
ARational method and irrational method
BConservative method and conventional method
CUnit method and percentage method
DDiscrete method and depletion allowance method
Under the depletion allowance method in computing depreciation, the depletion charge is equal to either ________ whichever is smaller
Afixed percentage of gross income or the net taxable income
Bfixed percentage of gross income or 50% of the next taxable income
C50% of the fixed percentage of gross income or 50% of the net taxable income
D50% of the fixed percentage of gross income or the net taxable income
The depletion allowance method of computing depletion is commonly known as ________
Aunit method
Bpercentage method
Cfactor method
Dsinking fund method
What is another term for "unit method" for computing depletion?
AInitial cost method
BPercentage method
CFactor method
DSinking fund method
Using factor method, the depletion at any given year is equal to:
Ainitial cost of property times number of units sold during the year divided by the total units in property
Binitial cost of property divided by the number of units sold during the year
Cinitial cost of property times number of units sold during the year
Dinitial cost of property divided by the total units in property
What do you call the after-tax present worth of all depreciation effects over the depreciation period of the asset?
AAsset recovery
BDepreciation recovery
CPeriod recovery
DAfter-tax recovery
A mathematical expression also known as the present value of annuity of one is called _________
Aload factor
Bdemand factor
Csinking fund factor
Dpresent worth factor
The amount of property in which a willing buyer will pay to a willing seller for the property when neither one is under the compulsion to buy nor sell is called _________
AFair value
BMarket value
CGoodwill value
DBook value
Salvage value is sometimes known as _________
AScrap value
BGoing value
CJunk value
DSecond-hand value
What refers to the value of an asset which a disinterested third party, different from the buyer and seller, will determine in order to establish a price acceptable to both parties?
ABook value
BMarket value
CFair value
DFranchise value
What refers to the value of an intangible item which arises from the exclusive right of a company to provide a specified product and service in a certain region of the country?
ACompany value
BGoing value
CGoodwill value
DFranchise value
The first cost to be incurred if the piece of equipment now in place had been bought for a second hand dealer or some other business is called _________
Amaterial cost
Bfixed cost
Cfirst cost
Din-place value
In computing depreciation of an equipment, which of the ff represents the first cost?
AThe original purchase price and freight charges
BInstallation expenses
CInitial and permit fees
Dall of these
The process of determining the value or worth of a physical property for specific reason is called __________
Ainvestment
Bvaluation
Ceconomy
Ddepletion
The unrecovered depreciation which results due to poor estimates as to life of the equipment is called ________
Asunk cost
Beconomic life
Cin-place value
Dannuity
What refers to the present worth of cost associated with an asset for an infinite period of time?
AAnnual cost
BIncrement cost
CCapitalized cost
DOperating cost
Capitalized cost of a project is also known as _______
Ainfinite cost
Blife cycle cost
Clife cost
Dproject cost