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4

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

Correct Answer :

C. 800


Related Questions

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4

'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

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4

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

A. Linearly

B. Non-linearly

C. Exponentially

D. Logarithmically

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4

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

A. Coal gasification

B. Steam reforming of naphtha

C. Electrolysis of water

D. Coke oven gas

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4

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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4

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

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4

__________ 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 (A), (B) and (C)

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4

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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4

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

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4

The ratio of working capital to total capital investment for most chemical plants (except for nonseasonal 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

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4

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

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4

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

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4

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

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4

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 turnover ratio = sales/net working capital

D. Total cost of production is more than net sales realisation (NSR) at breakeven point

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4

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 (A), (B) and (C)

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4

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

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4

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

A. 2

B. 10

C. 30

D. 50

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4

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

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4

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

A. End of the project life

B. Breakeven point

C. Start up

D. End of the design stage

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4

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. Turnover 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

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4

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

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4

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

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4

Following the six-tenth factor rule, if a loglog 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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4

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

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4

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

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4

'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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4

__________ 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

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4

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

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4

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

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4

'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) (P - S)

D. [2 (n - m + 1)/n(n + 1)]. (P - S)

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4

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