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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

Correct Answer :

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


Related Questions

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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

__________ taxes are based on gross earnings.

A. Property

B. Excise

C. Income

D. Capital gain

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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

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

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4

'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

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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

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

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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

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

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

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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4

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

A. More

B. Less

C. Same

D. No

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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

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

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4

Manufacturing cost in a chemical company does not include the

A. Fixed charges

B. Plant overheads

C. Direct products cost

D. Administrative expenses

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4

Which of the following is the cheapest 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

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4

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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4

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

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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

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)

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4

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

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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

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

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

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4

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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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

__________ 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

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

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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

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)

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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