MIME 310 - Practice Questions With Answers

MIME 310 - Practice Questions With Answers - Engineering...

Info iconThis preview shows pages 1–7. Sign up to view the full content.

View Full Document Right Arrow Icon
Engineering Economy Practice Exam
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
1. In the Canadian tax system, the sale of an asset in a particular asset class can simultaneously trigger a depreciation recapture and a loss on disposal. A) T B) F 2. For given demand and supply schedules, the market equilibrium is always in a price interval in which demand is elastic because the total consumer expenditure in this price range decreases. A) T B) F 3. When using the equivalent annual value criterion to compare equipment alternatives, it is assumed that continuous replace- ments are made for as long as the service of such equipment is required. A) T B) F
Background image of page 2
4. A capital gain occurs when a depreciable asset is sold for more than its undepreciated balance at the time of sale, but for less than its purchase price. A) T B) F 5. In the Canadian tax system, assets belonging to a particular class depreciated by the declining-balance method are grouped into one common pool and depreciated together. A) T B) F 6. The discounted payback period is superior to the payback period because it considers the cash flows that occur beyond the discounted capital recovery period. A) T B) F
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
7. When using an integrated company basis of taxation in project evaluation, any excess of operating expenses and tax allowances over a project's revenue in a particular year is assumed to be fully absorbed by other taxable corporate income of the company. A) T B) F 8. A change in supply to higher quantity levels is reflected by a vertical upward shift of the supply curve. A) T B) F 9. The law of diminishing marginal returns states that decreasing amounts of output will inevitably be obtained from successive additions of equal amounts of variable input in a system where fixed resources have achieved their optimum efficiency. A) T B) F
Background image of page 4
10. When using the capital tax factor on a capital expenditure, it is assumed that depreciation allowances generated by that capital expenditure can be fully absorbed (i.e. there is enough net income before allowances and taxes) in the year in which they are claimed. A) T B) F 11. Cash flows that result from debt and equity financing transactions, including incurrence and repayment of debt, cash inflows from the sale of stock, and cash outflows to pay dividends or repurchase stock are called: A) financing flows. B) operating flows. C) investment flows. D) monetary flows. E) none of the choices listed above.
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
12. The half - year rule in the Canadian tax system was probably implemented to: A) discourage firms from acquiring depreciable assets at year - end to take advantage of the fact that a full-year’s depreciation could be claimed on those assets. B) encourage the purchase of depreciable assets later in the year. C) satisfy political lobbyists. D) increase corporate tax savings resulting from the CCA.
Background image of page 6
Image of page 7
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 31

MIME 310 - Practice Questions With Answers - Engineering...

This preview shows document pages 1 - 7. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online