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Chemical Engineering Plant Economics MCQ Questions & Answers

Chemical Engineering Plant Economics MCQs : This section focuses on the "Chemical Engineering Plant Economics". These Multiple Choice Questions (MCQs) should be practiced to improve the Chemical Engineering Plant Economics skills required for various interviews (campus interview, walk-in interview, company interview), placement, entrance exam and other competitive examinations.




Question 1

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.

A. 40096
B. 43196
C. 53196
D. 60196

View Answer

Question 2

Operating profit of a chemical plant is equal to

A. profit before interest and tax i.e., net profit + interest + tax
B. profit after tax plus depreciation
C. net profit + tax
D. profit after tax

View Answer

Question 3

Relative cost of chemical process plants in India is about __________ percent more than the similar plants in U.S.A.

A. 15
B. 35
C. 55
D. 75

View Answer

Question 4

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.

A. 15000
B. 16105
C. 18105
D. 12500

View Answer

Question 5

Profit is equal to revenue minus

A. Book value
B. Total cost
C. Operating cost
D. None of these

View Answer

Question 6

Generally, income taxes are based on the

A. Total income
B. Gross earning
C. Total product cost
D. Fixed cost

View Answer

Question 7

Payback period

A. And economic life of a project are the same
B. Is the length of time over which the earnings on a project equals the investment
C. Is affected by the variation in earnings after the recovery of the investment
D. All of the above

View Answer

Question 8

The amount of compounded interest during 'n' interest periods is

A. P[(1+i)n-1)]
B. P(1 + i)n
C. P(1 - i)n
D. P(1 + in)

View Answer

Question 9

Personnel working in the market research group is reponsible for the job of

A. Equipment selection
B. Product evaluation
C. Equipment design
D. Cost estimation

View Answer

Question 10

In which of the electric power generation system, the operating cost is minimum ?

A. Thermal
B. Nuclear
C. Hydroelectric
D. Fast breeder reactor

View Answer

Question 11

Construction expenses are roughly __________ percent of the total direct cost of the plant.

A. 2
B. 10
C. 30
D. 50

View Answer

Question 12

Cost of piping in a fluid processing unit (e.g., distillation) of a chemical process plant is about __________ percent of the fixed capital investment.

A. 4
B. 13
C. 22
D. 34

View Answer

Question 13

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

A. Manufacturing cost
B. Depreciation by sinking fund method
C. Discrete compound interest
D. Cash ratio

View Answer

Question 14

Most chemical plants use an initial working capital amounting to 10-20% of the total capital investment. But this percentage may increase to __________ percent in case of seasonal products manufacturing plant.

A. 30
B. 50
C. 75
D. 95

View Answer

Question 15

In declining balance method of depreciation calculation, the

A. value of the asset decreases linearly with time.
B. annual cost of depreciation is same every year.
C. annual depreciation is the fixed percentage of the property value at the beginning of the particular year.
D. none of these.

View Answer

Question 16

'Utilities' in a chemical process plant includes compressed air, steam, water, electrical power, oxygen, acetylene, fuel gases etc. Utility costs for ordinary chemical process plants ranges roughly from __________ percent of the total product cost.

A. l to 5
B. 10 to 20
C. 25 to 35
D. 35 to 45

View Answer

Question 17

Pick out the wrong statement.

A. Net worth means paid up share capital and reserve & surplus (i.e. shareholders equity)
B. Return on equity = profit after tax/net worth
C. Working capital turn over ratio = sales/net working capital
D. Total cost of production is more than net sales realisation (NSR) at break even point

View Answer

Question 18

A balance sheet for a chemical plant shows its financial condition at any given date. It does not contain the __________ of the plant.

A. Current asset
B. Current liability
C. Long term debt
D. Profit

View Answer

Question 19

Pick out the wrong statement.

A. Net worth means paid up share capital and reserve & surplus (i.e. shareholders equity).
B. Return on equity = profit after tax/net worth.
C. Working capital turn over ratio = sales/net working capital.
D. Total cost of production is more than net sales realisation (NSR) at break even point.

View Answer

Question 20

Cost incurred towards __________ in a chemical plant is a component of the utilities cost.

A. water supply
B. running a control laboratory
C. property protection
D. medical services

View Answer

Question 21

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 pay back time?

A. 5 years
B. 7 years
C. 12 years
D. 10 years

View Answer

Question 22

Which of the following relationship is not correct is case of a chemical process plant ?

A. Manufacturing cost = direct product cost + fixed charges + plant overhead costs
B. General expenses = administrative expenses + distribution & marketing expenses
C. Total product cost = manufacturing cost + general expenses
D. Total product cost = direct production cost + plant overhead cost.

View Answer

Question 23

Pick out the wrong statement.

A. Gross margin = net income - net expenditure
B. Net sales realisation (NSR) = Gross sales - selling expenses
C. At break even point, NSR is more than the total production cost
D. Net profit = Gross margin - depreciation - interest

View Answer

Question 24

In which of the electric power generation system, the operating cost is minimum?

A. Thermal
B. Nuclear
C. Hydroelectric
D. Fast breeder reactor

View Answer

Question 25

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

A. perpetuity
B. capital charge factor
C. annuity
D. future worth

View Answer

Question 26

P' is the investment made on an equipment, 'S' is its salvage value and 'n is the life of the equipment in years. The depreciation for rath year by the sum-of years digit method will be

A. (P - S)/n
B. 1 - (P/S)1/m
C. M/n x (P - S)
D. 2(n - m + 1)/n(n + 1) x (P - S)

View Answer

Question 27

"Break-even point" is the point of intersection of

A. fixed cost and total cost.
B. total cost and sales revenue.
C. fixed cost and sales revenue.
D. none of these.

View Answer

Question 28

Pick out the wrong statement.

A. Debt-equity ratio of a chemical company describes the lenders contribution for each rupee of owner's contribution i.e., debt-equity ratio = total debt/net worth.
B. Return on investment (ROI) is the ratio of profit before interest & tax and capital employed (i.e. net worth + total debt).
C. Working capital = current assets + current liability.
D. Turn over = opening stock + production closing stock.

View Answer

Question 29

Direct costs component of the fixed capital consists of

A. contingencies
B. onsite and offsite costs
C. labour costs
D. raw material costs

View Answer

Question 30

Payback period

A. and economic life of a project are the same.
B. is the length of time over which the earnings on a project equals the investment.
C. is affected by the variation in earnings after the recovery of the investment.
D. all (a), (b) and (c).

View Answer

Question 31

Out of the following, the depreciation calculated by the __________ method is the maximum.

A. diminishing balance
B. straight line
C. sum of the years digit
D. sinking fund

View Answer

Question 32

Utilities cost in the operation of chemical process plant comes under the

A. plant overhead cost
B. fixed charges
C. direct production cost
D. general expenses

View Answer

Question 33

Nominal and effective interest rates are equal, when the interest is compounded

A. quarterly
B. semi-annually
C. annually
D. in no case, they are equal

View Answer

Question 34

A balance sheet for an industrial concern shows

A. The financial condition at any given time
B. Only current assets
C. Only fixed assets
D. Only current and fixed assets

View Answer

Question 35

The depreciation during the year 'n', in diminishing balance method of depreciation calculation, is calculated by multiplying a fixed percentage 'N' to the

A. Initial cost
B. Book value at the end of (n - 1)th year
C. Depreciation during the (n - 1)th year
D. Difference between initial cost and salvage value

View Answer

Question 36

Pick out the wrong statement.

A. Debt-equity ratio of a chemical company describes the lenders contribution for each rupee of owner's contribution i.e., debt-equity ratio = total debt/net worth
B. Return on investment (ROI) is the ratio of profit before interest & tax and capital employed (i.e. net worth + total debt)
C. Working capital = current assets + current liability
D. Turn over = opening stock + production closing stock

View Answer

Question 37

Optimum number of effects in a multiple effect evaporator is decided by the

A. Cost benefit analysis
B. Floor area availability
C. Terminal parameters
D. Evaporation capacity required

View Answer

Question 38

For a given fluid, as the pipe diameter increases, the pumping cost

A. decreases.
B. increases.
C. remains the same.
D. may increase or decrease, depending upon whether the fluid is Newtonian or non-Newtonian.

View Answer

Question 39

In declining balance method of depreciation calculation, the

A. Value of the asset decreases linearly with time
B. Annual cost of depreciation is same every year
C. Annual depreciation is the fixed percentage of the property value at the beginning of the particular year
D. None of these

View Answer

Question 40

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.

A. 300
B. 600
C. 800
D. 1000

View Answer

Question 41

Expenditure on research and development (R & D) is categorised as the __________ , while making an estimate of the total product cost for a chemical plant.

A. Overhead cost
B. Fixed expenses
C. General expenses
D. Direct production cost

View Answer

Question 42

Factory manufacturing cost is the sum of the direct production cost

A. Fixed charges and plant overhead cost
B. And plant overhead cost
C. Plant overhead cost and administrative expenses
D. None of these

View Answer

Question 43

With increase in the discounted cash flow rate of return, the ratio of the total present value to the initial investment of a given project

A. Decreases
B. Increases
C. Increases linearly
D. Remains constant

View Answer

Question 44

Optimum economic pipe diameter for fluid is determined by the

A. Viscosity of the fluid
B. Density of the fluid
C. Total cost considerations (pumping cost plus fixed cost of the pipe)
D. None of these

View Answer

Question 45

Pick out the wrong statement.

A. The annual depreciation rate for machinery and equipments in a chemical process plant is about 10% of the fixed capital investment
B. Annual depreciation rate of buildings in a chemical plant is about 3% of its initial cost
C. Insurance rates on annual basis in a chemical plant may be about 1% of the fixed capital investment
D. In a chemical industry, research and development cost amounts to about 15% of net sales realisation (NSR)

View Answer

Question 46

Which of the following is the costliest material of construction used in pressure vessel construction?

A. Low alloy steel
B. Lead
C. Titanium
D. High alloy steel

View Answer

Question 47

Which of the following is not a component of working capital?

A. Raw materials is stock
B. Finished products in stock
C. Transportation facilities
D. Semi-finished products in the process

View Answer

Question 48

Fixed capital investment of a chemical plant is the total amount of money needed to supply the necessary plant and manufacturing facilities plus the working capital for operation of the facilities. Which of the following components of fixed capital investment requires minimum percentage of it?

A. Electrical installation cost
B. Equipment installation cost
C. Cost for piping
D. Equipment insulation cost

View Answer

Question 49

Which of the following is not a component of depreciation cost?

A. Repairs and maintenance cost
B. Loss due to obsolescence of the equipment
C. Loss due to decrease in the demand of product
D. Loss due to accident/breakdown in the machinery

View Answer

Question 50

Pick out the correct statement.

A. Difference between income and expense is termed as gross revenue
B. Unamortised cost is the difference between the original cost of a property and all the depreciation charges made to date
C. Sum-of-the-years-digits methods of depreciation calculation accounts for the interest on the investment
D. Scrap value is the net amount of money obtainable from the sale of used property over and above any charges involved in its removal & sale

View Answer

Question 51

The __________ of a chemical company can be obtained directly from the balance sheet as the difference between current assets and current liabilities.

A. Cash ratio
B. Net working capital
C. Current ratio
D. Liquids assets

View Answer

Question 52

If 'S' is the amount available after 'n' interest periods for an initial principal 'P' with the discrete compound interest rate 'i', the present worth is given by

A. (1 + i)n/S
B. S/(1 + i)n
C. S/(1 + in)
D. S/(1 + n)i

View Answer

Question 53

Which of the following methods of depreciation calculations results in book values greater than those obtained with straight line method?

A. Multiple straight line method
B. Sinking fund method
C. Declining balance method
D. Sum of the years digit method

View Answer

Question 54

Personnel working in the market research group is reponsible for the job of

A. equipment selection.
B. product evaluation.
C. equipment design.
D. cost estimation.

View Answer

Question 55

The ratio of gross annual sales to the fixed capital investment is termed as the __________ ratio.

A. Cash reserve
B. Capital
C. Turnover
D. Investment

View Answer

Question 56

The ratio of working capital to total capital investment for most chemical plants (except for non-seasonal based products) is in the range of __________ percent.

A. 0.1 to 1
B. 1 to 2
C. 10 to 20
D. 50 to 60

View Answer

Question 57

Which of the following is a component of working capital investment?

A. Utilities plants
B. Maintenance and repair inventory
C. Process equipments
D. Depreciation

View Answer

Question 58

The payback method for the measurement of return on investment

A. Gives a correct picture of profitability
B. Underemphasises liquidity
C. Does not measure the discounted rate of return
D. Takes into account the cash inflows after the recovery of investments

View Answer

Question 59

Pick out the wrong statement.

A. Longer tubes are less expensive per unit heat transfer area as compared to shorter tubes
B. A cost index is merely a number for a given year showing the cost at that time relative to a certain base year
C. Turn over ratio of a chemical plant is the ratio of gross annual sales to the fixed capital investment
D. Plates with butt welded joints are less expensive compared to lap welded joints, because squaring of plates is not necessary

View Answer

Question 60

If an amount R is paid at the end of every year for 'n' years, then the net present value of the annuity at an interest rate of i is

A. R[((1 + i)n - 1)/i]
B. [((1 + i)n - 1)/i(1 + i)n]
C. R(1 + i)n
D. R/(1 + i)n

View Answer

Question 61

Pick out the wrong statement.

A. The annual depreciation rate for machinery and equipments in a chemical process plant is about 10% of the fixed capital investment.
B. Annual depreciation rate of buildings in a chemical plant is about 3% of its initial cost.
C. Insurance rates on annual basis in a chemical plant may be about 1% of the fixed capital investment.
D. In a chemical industry, research and development cost amounts to about 15% of net sales realisation (NSR).

View Answer

Question 62

Gantt chart (or Bar chart) is helpful in

A. Efficient utilisation of manpower and machines
B. Preparing production schedule
C. Efficient despatching of products
D. Inventory control

View Answer

Question 63

Which of the following is not a component of working capital ?

A. Raw materials is stock.
B. Finished products in stock.
C. Transportation facilities.
D. Semi-finished products in the process.

View Answer

Question 64

Break-even point is the point of intersection of

A. Fixed cost and total cost
B. Total cost and sales revenue
C. Fixed cost and sales revenue
D. None of these

View Answer

Question 65

Gross earning is equal to the total income minus

A. total product cost
B. fixed cost
C. income tax
D. none of these

View Answer

Question 66

Which of the following is the costliest source of getting hydrogen on commercial scale for the manufacture of nitrogeneous fertiliser?

A. Coal gasification
B. Steam reforming of naphtha
C. Alectrolysis of water
D. Coke oven gas

View Answer

Question 67

__________ of depreciation calculation accounts for the interest on investement.

A. Straight line method
B. Declining balance
C. both (a) and (b)
D. neither (a) nor (b).

View Answer

Question 68

Equipment installation cost in a chemical process plant ranges from __________ percent of the purchased equipment cost.

A. 10 to 20
B. 35 to 45
C. 55 to 65
D. 70 to 80

View Answer

Question 69

Which of the following is the costliest material of construction used in pressure vessel construction ?

A. Low alloy steel
B. Lead
C. Titanium
D. High alloy steel

View Answer

Question 70

Cost of instrumentation in a modern chemical plant ranges from __________ percent of the total plant cost.

A. 5 to 10
B. 20 to 30
C. 40 to 50
D. 60 to 70

View Answer

Question 71

Scheduling provides information about the

A. Proper utilisation of machines
B. Means to minimise idle time for machines
C. Time of completion of job
D. Time of starting of job and also about how much work should be completed during a particular period

View Answer

Question 72

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

A. 121
B. 110
C. 97
D. 91

View Answer

Question 73

Functional depreciation of an equipment is the measure of decrease in its value due to its

A. Ageing
B. Wear and tear
C. Obsolescence
D. Breakdown or accident

View Answer

Question 74

Annual depreciation cost are not constant when, the __________ method of depreciation calculation is used.

A. straight line
B. sinking fund
C. present worth
D. declining balance.

View Answer

Question 75

Which of the following relationship is not correct is case of a chemical process plant?

A. Manufacturing cost = direct product cost + fixed charges + plant overhead costs
B. General expenses = administrative expenses + distribution & marketing expenses
C. Total product cost = manufacturing cost + general expenses
D. Total product cost = direct production cost + plant overhead cost

View Answer

Question 76

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

A. More
B. Less
C. Same
D. No

View Answer

Question 77

__________ of depreciation calculation accounts for the interest on investement.

A. Straight line method
B. Declining balance
C. Both A and B
D. Neither A nor B

View Answer

Question 78

Maximum production start up cost for making a chemical plant operational is about __________ percent of the fixed capital cost.

A. 1
B. 5
C. 10
D. 30

View Answer

Question 79

In a chemical process plant, the total product cost comprises of manufacturing cost and the

A. General expenses
B. Overhead cost
C. R & D cost
D. None of these

View Answer

Question 80

Which of the following is a component of working capital investment ?

A. Utilities plants.
B. Maintenance and repair inventory.
C. Process equipments.
D. Depreciation.

View Answer

Question 81

Depreciation

A. Costs (on annual basis) are constant when the straight line method is used for its determination
B. Is the unavoidable loss in the value of the plant, equipment and materials with lapse in time
C. Does figure in the calculation of income tax liability on cash flows from an investment
D. All of the above

View Answer

Question 82

The inventory of raw materials included in the working capital is usually about __________ months supply of raw materials valued at delivery prices.

A. one
B. three
C. six
D. twelve

View Answer

Question 83

Manufacturing cost in a chemical company does not include the

A. Fixed charges
B. Plant overheads
C. Direct products cost
D. Administrative expenses

View Answer

Question 84

Scheduling provides information about the

A. proper utilisation of machines.
B. means to minimise idle time for machines.
C. time of completion of job.
D. time of starting of job and also about how much work should be completed during a particular period.

View Answer

Question 85

Lang factor' is defined as the ratio of the capital investment to the delivered cost of major equipments. The value of 'Lang factor' for fixed capital investment, for a solid-fluid processing chemical plant ranges from

A. 1.2 to 1.4
B. 2.5 to 2.7
C. 4.2 to 4.4
D. 6.2 to 6.4

View Answer

Question 86

Utilities' in a chemical process plant includes compressed air, steam, water, electrical power, oxygen, acetylene, fuel gases etc. Utility costs for ordinary chemical process plants ranges roughly from __________ percent of the total product cost.

A. 1 to 5
B. 10 to 20
C. 25 to 35
D. 35 to 45

View Answer

Question 87

__________ method for profitability evaluation of a project does not account for investment cost due to land.

A. Net present worth
B. Pay out period
C. Discounted cash flow
D. Rate of return on investment

View Answer

Question 88

The amount of simple interest during 'n' interest period is (where, i = interest rate based on the length of one interest period, p = principal)

A. P.i.n.
B. P(1 + i.n)
C. P(1 + i)n
D. P(1 - i.n)

View Answer

Question 89

Which of the following is not a component of the fixed capital for a chemical plant facility?

A. Raw materials inventory
B. Utilities plants
C. Process equipment
D. Emergency facilities

View Answer

Question 90

The value of a property decreases __________ with time in straight line method of determining depreciation.

A. Linearly
B. Non-linearily
C. Exponentially
D. Logarithmically

View Answer

Question 91

Annual depreciation cost are not constant when, the __________ method of depreciation calculation is used.

A. Straight line
B. Sinking fund
C. Present worth
D. Declining balance

View Answer

Question 92

Which of the following is not a component of depreciation cost ?

A. Repairs and maintenance cost.
B. Loss due to obsolescence of the equipment.
C. Loss due to decrease in the demand of product.
D. Loss due to accident/breakdown in the machinery.

View Answer

Question 93

Pick out the wrong statement.

A. Gross revenue is that total amount of capital received as a result of the sale of goods or service.
B. Net revenue is the total profit remaining after deducting all costs excluding taxes.
C. The ratio of immediately available cash to the total current liabilities is known as the cash ratio.
D. Consolidated income statement based on a given time period indicates surplus capital and shows the relationship among total income, costs & profit over the time interval.

View Answer

Question 94

Purchased cost of equipments for a chemical process plant ranges from __________ percent of the fixed capital investment.

A. 10 to 20
B. 20 to 40
C. 45 to 60
D. 65 to 75

View Answer

Question 95

__________ of depreciation calculation does not take into account the interest on investments.

A. Present worth method
B. Sinking fund method
C. Sum of the years-digits method
D. All of the above

View Answer

Question 96

The depreciation during the year 'n', in diminishing balance method of depreciation calculation, is calculated by multiplying a fixed percentage 'N' to the

A. initial cost.
B. book value at the end of (n - 1)th year,
C. depreciation during the (n - 1)th year.
D. difference between initial cost and salvage value.

View Answer

Question 97

The 'total capital investment' for a chemical process plant comprises of the fixed capital investment and the

A. Overhead cost
B. Working capital
C. Indirect production cost
D. Direct production cost

View Answer

Question 98

If the interest rate of 10% per period is compounded half yearly, the actual annual return on the principal will be __________ percent.

A. 10
B. 20
C. >20
D. < 20

View Answer

Question 99

Which of the following elements is not included in the scope of market analysis?

A. Competition from other manufactures
B. Product distribution
C. Opportunities
D. Economics

View Answer

Question 100

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.

A. N
B. N0.6
C. N0.4
D. √n

View Answer

Question 101

The total investment in a project is Rs. 10 lakhs and the annual profit is 1.5 lakhs. If the project life is 10 years, then the simple rate of return on investment is

A. 15%
B. 10%
C. 1.50%
D. 150%

View Answer

Question 102

Pick out the wrong statement.

A. Longer tubes are less expensive per unit heat transfer area as compared to shorter tubes.
B. A cost index is merely a number for a given year showing the cost at that time relative to a certain base year.
C. Turn over ratio of a chemical plant is the ratio of gross annual sales to the fixed capital investment.
D. Plates with butt welded joints are less expensive compared to lap welded joints, because squaring of plates is not necessary.

View Answer

Question 103

The economic life of a large chemical process plant as compared to a small chemical plant is

A. only slightly more
B. much more
C. slightly less
D. almost equal

View Answer

Question 104

Annual depreciation costs are constant, when the __________ method of depreciation calculation is used.

A. declining balance
B. straight line
C. sum of the years digit
D. none of these

View Answer

Question 105

In financial accounting of a chemical plant, which of the following relationship is invalid?

A. Assets = equities
B. Assets = liabilities + net worth
C. Total income = costs + profits
D. Assets = capital

View Answer

Question 106

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

A. 1000 (1 + 0.1/4)20
B. 1000 (1 + 0.1)20
C. 1000 (1 + 0.1/4)5
D. 1000 (1 + 0.1/2)5

View Answer

Question 107

__________ taxes are based on gross earnings.

A. Property
B. Excise
C. Income
D. Capital gain

View Answer

Question 108

Which of the following elements is not included in the scope of market analysis ?

A. Competition from other manufactures.
B. Product distribution.
C. Opportunities
D. Economics

View Answer

Question 109

Fixed charges for a chemical plant does not include the

A. Interest on borrowed money
B. Rent of land and buildings
C. Property tax, insurance and depreciation
D. Repair and maintenance charges

View Answer

Question 110

Chemical engineering plant cost index is used for finding the present cost of a particular chemical plant, if the cost of similar plant at some time in the past is known. The present cost of the plant = original cost x (index value/(index value at original cost was obtained)The most major component of this cost index is

A. Fabricated equipment and machinery
B. Process instruments and control
C. Pumps and compressor
D. Electrical equipments and material

View Answer

Question 111

Which of the following ceramic packing materials is the costliest of all?

A. Berl saddles
B. Raschig rings
C. Pall rings
D. Intalox saddles

View Answer

Question 112

In an ordinary chemical plant, electrical installation cost may be about

A. 10-15% of purchased equipment cost.
B. 3-10% of fixed capital investment.
C. either (a) or (b).
D. neither (a) nor (b).

View Answer

Question 113

Which of the following is not a current asset of a chemical company?

A. Inventories
B. Marketable securities
C. Chemical equipments
D. None of these

View Answer

Question 114

Which of the following is the cheaptest material of construction for the storage of sodium hydroxide upto a concentration of 75%?

A. Stainless steel
B. Plain carbon steel
C. Nickel
D. Copper

View Answer

Question 115

For a typical project, the cumulative cash flow is zero at the

A. End of the project life
B. Break even point
C. Start up
D. End of the design stage

View Answer

Question 116

The payback method for the measurement of return on investment

A. gives a correct picture of profitability.
B. underemphasises liquidity.
C. does not measure the discounted rate of return.
D. takes into account the cash inflows after the recovery of investments.

View Answer

Question 117

Which of the following is not a component of the working capital for a chemical process plant?

A. Product inventory
B. In-process inventory
C. Minimum cash reserve
D. Storage facilities

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Question 118

Which of the following is not a mathematical method for evaluation of profitability of a chemical process plant?

A. Cash reserve
B. Rate of return on investment
C. Payout period
D. Discounted cash flow based on full life performance

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Question 119

Effective and nominal interest rates are equal, when the interest is compounded

A. Annually
B. Fortnightly
C. Monthly
D. half-yearly

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Question 120

Depreciation is __________ in profit with time.

A. Decrease
B. Increase
C. No change
D. None of these

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Question 121

For a given fluid, as the pipe diameter increases, the pumping cost

A. Decreases
B. Increases
C. Remains the same
D. May increase or decrease, depending upon whether the fluid is Newtonian or non-Newtonian

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Question 122

In an ordinary chemical plant, electrical installation cost may be about

A. 10-15% of purchased equipment cost
B. 3-10% of fixed capital investment
C. Either A or B
D. Neither A nor B

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Question 123

Total product cost of a chemical plant does not include the __________ cost.

A. Market survey
B. Operating labour, supervision and supplies
C. Overhead and utilities
D. Depreciation, property tax and insur-rance

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Question 124

'Six-tenth factor' rule is used for estimating the

A. equipment installation cost.
B. equipment cost by scaling.
C. cost of piping.
D. utilities cost.

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Question 125

Effluent treatment cost in a chemical plant is categorised as the __________ cost.

A. Fixed
B. Overhead
C. Utilities
D. Capital

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Question 126

Following the six-tenth factor rule, if a log-log plot of capacity of the equipment vs. cost of the equipment is made, then a straight line is obtained, whose slope is equal to

A. 0.1
B. 0.6
C. 0.2
D. 0.8

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Question 127

Six-tenth factor' rule is used for estimating the

A. Equipment installation cost
B. Equipment cost by scaling
C. Cost of piping
D. Utilities cost

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Question 128

Pick out the wrong statement.

A. Gross revenue is that total amount of capital received as a result of the sale of goods or service
B. Net revenue is the total profit remaining after deducting all costs excluding taxes
C. The ratio of immediately available cash to the total current liabilities is known as the cash ratio
D. Consolidated income statement based on a given time period indicates surplus capital and shows the relationship among total income, costs & profit over the time interval

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Question 129

Which of the following does not come under the sales expenses for a product of a chemical plant?

A. Advertising
B. Warehousing
C. Legal fees
D. Customer service

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Question 130

Fixed charges for a chemical plant does not include the

A. interest on borrowed money.
B. rent of land and buildings.
C. property tax, insurance and depreciation.
D. repair and maintenance charges.

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Question 131

In a manufacturing industry, break even point occurs, when the

A. total annual rate of production equals the assigned value.
B. total annual product cost equals the total annual sales.
C. annual profit equals the expected value.
D. annual sales equals the fixed cost.

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Question 132

In a manufacturing industry, break even point occurs, when the

A. Total annual rate of production equals the assigned value
B. Total annual product cost equals the total annual sales
C. Annual profit equals the expected value
D. Annual sales equals the fixed cost

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