Budget, Finance, And Economics Questions! Quiz

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Budget, finance, and economics questions quiz. Budgeting is the act of coming u with funds and deciding which activities to use the money on to increase the profits of a company. There is no way a business can function without taking economic factors into consideration and the quiz below is perfect for seeing how well you understand them. Give it a shot and feel free to take the quiz as many times as you need.

• 1.

Jan Injures   Deaths     2002 2001 2000   2002 2001 2000     Feb                   Mar Apr                   May                 5 month Totals 16,721 18,630 19,872          301 - 314        321 ~   Using the table above what is the % decrease of injuries between the year 2000 and 2001 from the 5-month totals and also what is the % decrease of deaths between the year 2001 and 2002 from the 5-month totals?

• A.

6.3 and 4.1

• B.

5.l and 4.5

• C.

4.7 and 5.5

• D.

4.5 and 5.1

A. 6.3 and 4.1
Explanation
(19872-18630)/19872=6.25%
(314-301)/314=4.14 %

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• 2.

Jan Injures   Deaths     2002 2001 2000   2002 2001 2000     Feb                   Mar Apr                   May                 5 month Totals 16,721 18,630 19,872          301 - 314        321 ~   Using the table what is the % increase of injuries from the total 5-month in 2002 and 2000?

• A.

Less than 9.8%

• B.

Between 9.8% and 11%

• C.

Between 10% and 12%

• D.

Greater than 12%

D. Greater than 12%
Explanation
(19872-16721)/19872=16%

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• 3.

In comparing two alternatives based on economic analysis determine best one by:

• A.

Use past expenditures

• B.

Identify the events that are independent of each other for both alternatives

• C.

Identify the different costs of each alternative

• D.

Base it on the length of time of each alternative

C. Identify the different costs of each alternative
Explanation
To determine the best alternative based on economic analysis, it is important to identify the different costs of each alternative. This allows for a comprehensive comparison of the financial implications of each option, enabling a more informed decision-making process. By considering the various costs associated with each alternative, such as initial investments, operational expenses, maintenance costs, and potential returns, one can assess the financial feasibility and potential profitability of each option. This analysis helps in selecting the alternative that offers the most favorable cost-benefit ratio and aligns with the organization's financial objectives.

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• 4.

What is the best way to maintain control of costs?

• A.

Evaluate monthly expenditures based on a carefully formulated program

• B.

Personally review all expenditures before any disbursements are made

• C.

Assign all authority to one staff member

• D.

Submit weekly expenditures to superior for review

A. Evaluate monthly expenditures based on a carefully formulated program
Explanation
The best way to maintain control of costs is to evaluate monthly expenditures based on a carefully formulated program. By carefully formulating a program, the company can set specific goals and guidelines for spending, allowing them to track and analyze their expenses on a regular basis. This approach ensures that costs are being monitored and managed effectively, helping to prevent overspending and identify areas where savings can be made. It also promotes transparency and accountability within the organization, as everyone is aware of the established program and its objectives.

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• 5.

Which of the following should the anticipated budget requirements for the next fiscal year, whenever possible, be based on?

• A.

Changes in legal requirements

• B.

Increases in population

• C.

Price trends in financial markets

• D.

A work program

D. A work program
Explanation
The anticipated budget requirements for the next fiscal year should be based on a work program. A work program outlines the specific tasks, projects, and goals that need to be accomplished in the upcoming year. By considering the work program, organizations can estimate the resources and funding needed to successfully execute these activities. This approach ensures that the budget aligns with the organization's priorities and objectives, allowing for effective planning and allocation of resources.

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• 6.

Sound budgeting and good planning will

• A.

Provide a basis of managing resources

• B.

• C.

Save money for next year

A. Provide a basis of managing resources
Explanation
Sound budgeting and good planning are essential for effectively managing resources. By carefully planning and allocating funds, organizations can ensure that they have enough resources to carry out their projects and meet their goals. This includes determining how much money is needed, where it will be spent, and how it will be managed. By providing a basis for managing resources, sound budgeting and good planning help organizations make informed decisions about resource allocation, monitor expenses, and ensure that funds are used efficiently and effectively.

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• 7.

Reason for financial planning and budgeting?

• A.

Provide basis to gauge performance and plan for the future funds

• B.

Guarantee project future fund

• C.

Save money for next year

• D.

Overcharge rate payers

A. Provide basis to gauge performance and plan for the future funds
Explanation
Financial planning and budgeting are essential because they provide a basis to gauge performance and plan for future funds. By carefully analyzing and managing financial resources, organizations can track their progress, identify areas of improvement, and make informed decisions regarding the allocation of funds. This process helps in setting realistic financial goals, ensuring efficient resource utilization, and ultimately achieving financial stability and growth. Additionally, financial planning and budgeting enable organizations to anticipate future expenses and allocate funds accordingly, ensuring that they have sufficient resources to meet their obligations and invest in future opportunities.

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• 8.

On border line cases analysis, the reason for favoring the longer-lived items is:

• A.

Anticipated technological changes

• B.

High Cost of Replacement

• C.

Change of Service Requirement

B. High Cost of Replacement
Explanation
The reason for favoring longer-lived items in border line cases is the high cost of replacement. This means that it would be more expensive to replace the item with a shorter lifespan compared to investing in a longer-lived item. Therefore, it is more cost-effective to choose the longer-lived item to avoid frequent replacements and the associated costs.

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• 9.

In determining what fuel type to use in power plant, a comparison of the ratio of costs per _____

• A.

Unit consumed

• B.

Volume of consumption

• C.

Generation output unit

C. Generation output unit
Explanation
The correct answer is "generation output unit". When determining what fuel type to use in a power plant, it is important to compare the costs per generation output unit. This means evaluating the cost of producing a certain amount of electricity or power output using different fuel types. By comparing the costs per generation output unit, power plant operators can make informed decisions about which fuel type will be the most cost-effective and efficient for their specific needs.

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• 10.

A capitalized cost analysis is equivalent to:

• A.

Present value of overall project + perpetual future replacement cost

• B.

Present worth of the cost

• C.

Year end payment to sinking fund

• D.

Cost of investmentâ€¦

A. Present value of overall project + perpetual future replacement cost
Explanation
Capitalized cost is the present value of the overall project + perpetual future replacements cost

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• 11.

Of the following, when you prepare the anticipated budget for the next fiscal year, which one is the least concern?

• A.

Change of legal enforcement

• B.

Increase of population

• C.

Price change with market trends

• D.

A work program

B. Increase of population
Explanation
When preparing the anticipated budget for the next fiscal year, the least concern would be the increase of population. While changes in legal enforcement, price changes with market trends, and a work program can all have a direct impact on the budget, an increase in population does not necessarily directly affect the budget. It may have indirect effects on certain areas such as public services or infrastructure, but it is not a primary concern when it comes to budget preparation.

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• 12.

Which one is the least important factor for a budget to be successful or failure?

• A.

Preparing budget

• B.

Operating budget

• C.

Obtain managerâ€™s support for budget

• D.

Comparing with prior yearâ€™s budget

C. Obtain managerâ€™s support for budget
Explanation
Obtaining manager's support for a budget is the least important factor for a budget to be successful or failure. While it is beneficial to have the support of managers, it is not the determining factor for the success or failure of a budget. Other factors such as preparing a budget, creating an operating budget, and comparing with prior year's budget are more crucial in ensuring the success of a budget. Manager's support can be helpful in implementing the budget effectively, but it is not the most important factor in determining its success.

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• 13.

A wind farm rated at 100MW has a capacity factor of 30%. The cost is \$0.05/kWHr under a PPA agreement. What is the annual cost to be budget for this generation source?

• A.

\$1.5M

• B.

\$ 9M (???)

• C.

\$15 M

• D.

\$45M

C. \$15 M
Explanation
Capacity in MW x Capacity Factor x days in a year x hours in a day x Cost = use approximation
100 x 30% x 365 days x 24 hours days \$0.05 / 1000 = \$13.14 million =~ \$15 M

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• 14.

What is the best way to maintain control of costs?

• A.

Evaluate monthly expenditures based on a carefully formulated program

• B.

Personally review all expenditures before any disbursements are made

• C.

Assign all authority to one staff memeber

• D.

Submit weekly expenditures to superior for review

A. Evaluate monthly expenditures based on a carefully formulated program
Explanation
The best way to maintain control of costs is to evaluate monthly expenditures based on a carefully formulated program. This means regularly reviewing and analyzing expenses to ensure they align with the set budget and financial goals. By having a well-thought-out program in place, businesses can track their spending, identify areas of overspending or inefficiency, and make necessary adjustments to control costs effectively. This approach allows for proactive cost management and helps businesses stay within their financial limits.

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• 15.

Which of the following should the anticipated budget requirements for the next fiscal year, whenever possible, be based on?

• A.

Changes in legal requirments

• B.

Increases in population

• C.

Price trends in financial markets

• D.

A work program

D. A work program
Explanation
The anticipated budget requirements for the next fiscal year should be based on a work program. A work program outlines the specific tasks, activities, and projects that need to be accomplished in the upcoming year. By analyzing the work program, organizations can estimate the resources and funding needed to execute these tasks successfully. This approach ensures that the budget aligns with the organization's goals and priorities, allowing for effective planning and resource allocation.

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• 16.

A fund set aside and growing with interest in anticipation of a failure expenditure is called

• A.

Surplus fund

• B.

Sinking fund

• C.

Revolving fund

• D.

Bank reserve

B. Sinking fund
Explanation
A sinking fund is a fund set aside and growing with interest in anticipation of a future expenditure. It is typically used to pay off a debt or to replace an asset at the end of its useful life. The purpose of a sinking fund is to ensure that there are sufficient funds available when the expenditure becomes due, reducing the need for borrowing or relying on other sources of funding. Therefore, a sinking fund is the correct answer in this case.

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• 17.

What is not a primary consideration to making a capital budget?

• A.

Scoping of the project

• B.

Alternatives

• C.

• D.

Human Resources