**11.**A machine has an initial value of Rs. 5000, service life of 5 years and final salvage value of Rs. 1000. The annual depreciation cost by straight line method is Rs.

- 300
- 600
- 800
- 1000

Correct answer: (C)

800

800

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

- 121
- 110
- 97
- 91

Correct answer: (A)

121

121

**13.**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.

- 40096
- 43196
- 53196
- 60196

Correct answer: (D)

60196

60196

**14.**A series of equal payments (e.g., deposit or cost) made at equal intervals of time is known as

- Perpetuity
- Capital charge factor
- Annuity
- Future worth

Correct answer: (C)

Annuity

Annuity

**15.**A shareholder has _________ say in the affairs of company management compared to a debenture holder.

- More
- Less
- Same
- No

Correct answer: (A)

More

More

**16.**According to six-tenths-factor rule, if the cost of a given unit at one capacity is known, then the cost of similar unit with '' times the capacity of the first unit is approximately equal to _________ times the cost of the initial unit.

- n
- n
^{0.6} - n
^{0.4} - √n

Correct answer: (B)

n^{0.6}

**17.**Accumulated sum at the end of 5 years, if Rs. 10000 is invested now at 10% interest per annum on a compound basis is Rs.

- 15000
- 16105
- 18105
- 12500

Correct answer: (B)

16105

16105

**18.**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

- Manufacturing cost
- Depreciation by sinking fund method
- Discrete compound interest
- Cash ratio

Correct answer: (B)

Depreciation by sinking fund method

Depreciation by sinking fund method

**19.**An investment of Rs. 100 lakhs is to be made for construction of a plant, which will take two years to start production. The annual profit from the operation of the plant is Rs. 20 lakhs. What will be the payback time?

- 5 years
- 7 years
- 12 years
- 10 years

Correct answer: (B)

7 years

7 years

**20.**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

- 1000 (1 + 0.1/4)
^{20} - 1000 (1 + 0.1)
^{20} - 1000 (1 + 0.1/4)
^{5} - 1000 (1 + 0.1/2)
^{5}

Correct answer: (A)

1000 (1 + 0.1/4)^{20}