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

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

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

R(1 + i)n

R/(1 + i)n

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

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

Property

Excise

Income

Capital gain

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

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

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

R(1 + i)n

R/(1 + i)n

4

# 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

4

1 to 5

10 to 20

25 to 35

35 to 45

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

# 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

# Factory manufacturing cost is the sum of the direct production cost

Fixed charges and plant overhead cost

None of these

4

15000

16105

18105

12500

4

# In an ordinary chemical plant, electrical installation cost may be about

10-15% of purchased equipment cost

3-10% of fixed capital investment

Either (A) or (B)

Neither (A) nor (B)

4

More

Less

Same

No

4

# Pick out the wrong statement.

Longer tubes are less expensive per unit heat transfer area as compared to shorter tubes

A cost index is merely a number for a given year showing the cost at that time relative to a certain base year

Turnover ratio of a chemical plant is the ratio of gross annual sales to the fixed capital investment

Plates with butt welded joints are less expensive compared to lap welded joints, because squaring of plates is not necessary

4

# Which of the following is not a component of depreciation cost?

Repairs and maintenance cost

Loss due to obsolescence of the equipment

Loss due to decrease in the demand of product

Loss due to accident/breakdown in the machinery

4

# Manufacturing cost in a chemical company does not include the

Fixed charges

Direct products cost

4

# Which of the following is the cheapest material of construction for the storage of sodium hydroxide upto a concentration of 75%?

Stainless steel

Plain carbon steel

Nickel

Copper

4

# 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

4

One

Three

Six

Twelve

4

# Generally, income taxes are based on the

Total income

Gross earning

Total product cost

Fixed cost

4

p.i.n.

p(1 + i.n)

p(1 + i)n

p(1 - i.n)

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

Manufacturing cost

Depreciation by sinking fund method

Discrete compound interest

Cash ratio

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

Coal gasification

Steam reforming of naphtha

Electrolysis of water

Coke oven gas

4

# Utilities cost in the operation of chemical process plant comes under the

Fixed charges

Direct production cost

General expenses

4

# Fixed charges for a chemical plant does not include the

Interest on borrowed money

Rent of land and buildings

Property tax, insurance and depreciation

Repair and maintenance charges

4

121

110

97

91

4

# __________ method for profitability evaluation of a project does not account for investment cost due to land.

Net present worth

Pay out period

Discounted cash flow

Rate of return on investment

4

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

Quarterly

Semi-annually

Annually

In no case, they are equal

4

# 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

4

# 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)