# Highway Engineering Questions and Answers – Highway Finance

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This set of Highway Engineering Multiple Choice Questions & Answers (MCQs) focuses on “Highway Finance”.

1. The average annual highway cost for a road system may be summed up by __________
a) Ca=H+T+M+Cr
b) Ca=H+T+M-Cr
c) Ca=H+T
d) Ca=H

Explanation: The average cost of the annual road system is the sum of all costs like average cost of highway administration, operation and maintenance and also the recovery fund.

2. The CRF denotes __________
b) Capital Recovery Fund
c) Capital Recovery Factor
d) Central Research Fund

Explanation: The first cost of a capital improvement is converted into equivalent annual cost which is called capital recovery factor.

3. The Vs in average annual capital cost represents?
a) Savage value
b) Salvage value
c) Waste value
d) Usable value

Explanation: Salvage is the income available after the structure has almost completed the life span.

4. If the principal is P and rate of interest is i and it has to be paid in n years then, the sum S is given by __________
a) P(1+i)
b) P(1-i)
c) P/I
d) P(1+i)n

Explanation: The compound interest is calculated for every year and it’s leived on the preceding interest.

5. What is the first step in economic analysis?
b) Estimate growth rate
c) Assessment of traffic route

Explanation: The average annual daily traffic is required for the completion of the remaining steps.

6. The method not used in economic analysis is __________
a) Annual cost
b) Rate of return
c) Benefit cost ratio
d) Floating car

Explanation: The floating car method is a method that is used for the estimation of the traffic, whereas the remaining are methods of analysis of the cost.

7. The savings in annual road user costs, annual savings in accident costs and capital cost of Improvement are parameters used in __________
a) Annual cost method
b) Rate of return method
c) Benefit cost ratio
d) None

Explanation: The transport laboratory of London has developed this method in which a rate of return is obtained by these parameters, the remaining methods don’t require these parameters.

8. The ratio of annual benefit from improvement to annual cost of the improvement is called __________
a) Benefit
b) Cost
c) Benefit cost ratio
d) Maintenance cost

Explanation: The ratio of annual benefit from the improvement to annual cost of the improvement is called benefit cost ratio, benefit is the profit, cost is the investment and maintenance cost is after the investment.

9. The national highway act was ammended in __________
a) April 1956
b) June 1995
c) July 1956
d) August 1995

Explanation: The national highway act 1956, was amended in June 1995, it was actually planned in April 1956.

10. As on April 2009, how many projects have been completed on BOT basis?
a) 5
b) 42
c) 25
d) 9 