4

# 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?

Electrical installation cost

Equipment installation cost

Cost for piping

Equipment insulation cost

D. Equipment insulation cost

4

Book value

Total cost

Operating cost

None of these

4

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

Assets = equities

Assets = liabilities + net worth

Total income = costs + profits

Assets = capital

4

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

Multiple straight line method

Sinking fund method

Declining balance method

Sum of the years digit method

4

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

Utilities plants

Maintenance and repair inventory

Process equipments

Depreciation

4

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

Working capital

Indirect production cost

Direct production cost

4

p[(1+i)n - 1)]

p(1 + i)n

p(1 - i)n

p(1 + in)

4

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

Straight line

Sinking fund

Present worth

Declining balance

4

n

n0.6

n0.4

√n

4

# 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

4

# 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

4

Fixed

Utilities

Capital

4

# 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

4

More

Less

Same

No

4

Warehousing

Legal fees

Customer service

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

(P - S)/n

1 - (P/S)1/m

(m/n) (P - S)

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

4

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

Quarterly

Semi-annually

Annually

In no case, they are equal

4

Decrease

Increase

No change

None of these

4

# Gantt chart (or Bar chart) is helpful in

Efficient utilisation of manpower and machines

Preparing production schedule

Efficient despatching of products

Inventory control

4

10 to 20

35 to 45

55 to 65

70 to 80

4

# 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

4

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

Only slightly more

Much more

Slightly less

Almost equal

4

2

10

30

50

4

15

35

55

75

4

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

Water supply

Running a control laboratory

Property protection

Medical services

4

Annually

Fortnightly

Monthly

Half-yearly

4

# 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)

4

# 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

1000 (1 + 0.1/4)20

1000 (1 + 0.1)20

1000 (1 + 0.1/4)5

1000 (1 + 0.1/2)5

4

# Operating profit of a chemical plant is equal to

Profit before interest and tax i.e., net profit + interest + tax

Profit after tax plus depreciation

Net profit + tax

Profit after tax

4

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

End of the project life

Breakeven point

Start up

End of the design stage