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4

Depreciation is __________ in profit with time.

A. Decrease

B. Increase

C. No change

D. None of these

Correct Answer :

A. Decrease


Related Questions

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4

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. 40,096

B. 43,196

C. 53,196

D. 60,196

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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

__________ 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

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

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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

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

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4

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

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4

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

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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

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

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4

Pick out the wrong statement.

A. Gross margin = net income - net expenditure

B. Net sales realisation (NSR) = Gross sales - selling expenses

C. At breakeven point, NSR is more than the total production cost

D. Net profit = Gross margin - depreciation - interest

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4

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

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4

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. R [{(1 + i)n - 1}/ i (1 + i)n]

C. R(1 + i)n

D. R/(1 + i)n

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4

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

A. Utilities plants

B. Maintenance and repair inventory

C. Process equipments

D. Depreciation

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4

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)

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4

In a manufacturing industry, breakeven 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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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

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

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4

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

A. Equipment selection

B. Product evaluation

C. Equipment design

D. Cost estimation

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4

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

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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

'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

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

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4

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

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4

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

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4

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

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4

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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4

Generally, income taxes are based on the

A. Total income

B. Gross earning

C. Total product cost

D. Fixed cost

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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

__________ of depreciation calculation accounts for the interest on investment.

A. Straight line method

B. Declining balance

C. Both (A) and (B)

D. Neither (A) nor (B)