Annual depreciation costs are constant, when the __________ method of depreciation calculation is used.
Declining balance
Straight line
Sum of the years digit
None of these
Correct Answer :
B. Straight line
Related Questions
Which of the following is not a component of the fixed capital for a chemical plant facility?
Raw materials inventory
Utilities plants
Process equipment
Emergency facilities
Annual depreciation costs are constant, when the __________ method of depreciation calculation is used.
Declining balance
Straight line
Sum of the years digit
None of these
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.
300
600
800
1000
Payback period
And economic life of a project are the same
Is the length of time over which the earnings on a project equals the investment
Is affected by the variation in earnings after the recovery of the investment
All (A), (B) and (C)
A balance sheet for an industrial concern shows
The financial condition at any given time
Only current assets
Only fixed assets
Only current and fixed assets
The 'total capital investment' for a chemical process plant comprises of the fixed capital investment and the
Overhead cost
Working capital
Indirect production cost
Direct production cost
Out of the following, the depreciation calculated by the __________ method is the maximum.
Diminishing balance
Straight line
Sum of the years digit
Sinking fund
__________ of depreciation calculation does not take into account the interest on investments.
Present worth method
Sinking fund method
Sum of the years-digits method
All (A), (B) and (C)
Which of the following is not a current asset of a chemical company?
Inventories
Marketable securities
Chemical equipments
None of these
Optimum number of effects in a multiple effect evaporator is decided by the
Cost benefit analysis
Floor area availability
Terminal parameters
Evaporation capacity required
Which of the following is the costliest material of construction used in pressure vessel construction?
Low alloy steel
Lead
Titanium
High alloy steel
The amount of compounded interest during 'n' interest periods is
p[(1+i)n - 1)]
p(1 + i)n
p(1 - i)n
p(1 + in)
In a chemical process plant, the total product cost comprises of manufacturing cost and the
General expenses
Overhead cost
R & D cost
None of these
Which of the following is not a component of the working capital for a chemical process plant?
Product inventory
In-process inventory
Minimum cash reserve
Storage facilities
The ratio of gross annual sales to the fixed capital investment is termed as the __________ ratio.
Cash reserve
Capital
Turnover
Investment
'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
1.2 to 1.4
2.5 to 2.7
4.2 to 4.4
6.2 to 6.4
Maximum production start up cost for making a chemical plant operational is about __________ percent of the fixed capital cost.
1
5
10
30
Break-even point is the point of intersection of
Fixed cost and total cost
Total cost and sales revenue
Fixed cost and sales revenue
None of these
Gross earning is equal to the total income minus
Total product cost
Fixed cost
Income tax
None of these
'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
(P - S)/n
1 - (P/S)1/m
(m/n) (P - S)
[2 (n - m + 1)/n(n + 1)]. (P - S)
Pick out the wrong statement.
The annual depreciation rate for machinery and equipments in a chemical process plant is about 10% of the fixed capital investment
Annual depreciation rate of buildings in a chemical plant is about 3% of its initial cost
Insurance rates on annual basis in a chemical plant may be about 1% of the fixed capital investment
In a chemical industry, research and development cost amounts to about 15% of net sales realisation (NSR)
The ratio of working capital to total capital investment for most chemical plants (except for nonseasonal based products) is in the range of __________ percent.
0.1 to 1
1 to 2
10 to 20
50 to 60
In a manufacturing industry, breakeven point occurs, when the
Total annual rate of production equals the assigned value
Total annual product cost equals the total annual sales
Annual profit equals the expected value
Annual sales equals the fixed cost
The payback method for the measurement of return on investment
Gives a correct picture of profitability
Underemphasises liquidity
Does not measure the discounted rate of return
Takes into account the cash inflows after the recovery of investments
Annual depreciation cost are not constant when, the __________ method of depreciation calculation is used.
Straight line
Sinking fund
Present worth
Declining balance
Effective and nominal interest rates are equal, when the interest is compounded
Annually
Fortnightly
Monthly
Half-yearly
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
R [{(1 + i)n - 1}/ i ]
R [{(1 + i)n - 1}/ i (1 + i)n]
R(1 + i)n
R/(1 + i)n
__________ taxes are based on gross earnings.
Property
Excise
Income
Capital gain
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
Manufacturing cost
Depreciation by sinking fund method
Discrete compound interest
Cash ratio
Pick out the wrong statement.
Gross margin = net income - net expenditure
Net sales realisation (NSR) = Gross sales - selling expenses
At breakeven point, NSR is more than the total production cost
Net profit = Gross margin - depreciation - interest