Engineering Economics
What is the main reason why the sinking fund method of computing depreciation is seldom used in the industry?

Rate of interest cannot be exactly determined
Unstable economy
The initial deprecation is high
The initial depreciation is low

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Engineering Economics
A construction estimate is used

To produce a statement of the approximate cost
To judge tentatively or approximate value of the project
To decide an approximation of the value of the project and not the exact cost
None of these

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Engineering Economics
It is the practice of almost all banks in the Philippines that when they grant a loan, the interest for one year is automatically deducted from the principal amount upon release of money to a borrower. Let us therefore assume that you applied for a loan with a bank and the P80,000 was approved at an interest rate of 14% of which P11,200 was deducted and you were given a check of P68,800. Since you have to pay the amount of P80,000 one year after, what then will be the effective interest rate?

0.1628
0.1647
0.1632
0.1602

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