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)

C. Either (A) or (B)

4

Cash reserve

Capital

Turnover

Investment

4

# Pick out the correct statement.

Difference between income and expense is termed as gross revenue

Unamortised cost is the difference between the original cost of a property and all the depreciation charges made to date

Sum-of-the-years-digits methods of depreciation calculation accounts for the interest on the investment

Scrap value is the net amount of money obtainable from the sale of used property over and above any charges involved in its removal & sale

4

# With increase in the discounted cash flow rate of return, the ratio of the total present value to the initial investment of a given project

Decreases

Increases

Increases linearly

Remain constant

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

# __________ 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

Linearly

Non-linearly

Exponentially

Logarithmically

4

# __________ of depreciation calculation accounts for the interest on investment.

Straight line method

Declining balance

Both (A) and (B)

Neither (A) nor (B)

4

# Out of the following, the depreciation calculated by the __________ method is the maximum.

Diminishing balance

Straight line

Sum of the years digit

Sinking fund

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

General expenses

R & D cost

None of these

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

15%

10%

1.5%

150%

4

# Scheduling provides information about the

Proper utilisation of machines

Means to minimise idle time for machines

Time of completion of job

Time of starting of job and also about how much work should be completed during a particular period

4

# Which of the following is not a current asset of a chemical company?

Inventories

Marketable securities

Chemical equipments

None of these

4

300

600

800

1000

4

# The depreciation during the year 'n', in diminishing balance method of depreciation calculation, is calculated by multiplying a fixed percentage 'N' to the

Initial cost

Book value at the end of (n - 1)th year

Depreciation during the (n - 1)th year

Difference between initial cost and salvage value

4

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

Utilities plants

Maintenance and repair inventory

Process equipments

Depreciation

4

# Total product cost of a chemical plant does not include the __________ cost.

Market survey

Operating labour, supervision and supplies

Depreciation, property tax and insurance

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

# 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

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

Fixed charges and plant overhead cost

None of these

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

10 to 20

20 to 40

45 to 60

65 to 75

4

Low alloy steel

Titanium

High alloy steel

4

# 'Six-tenth factor' rule is used for estimating the

Equipment installation cost

Equipment cost by scaling

Cost of piping

Utilities cost

4

More

Less

Same

No

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

# Chemical engineering plant cost index is used for finding the present cost of a particular chemical plant, if the cost of similar plant at some time in the past is known. The present cost of the plant = original cost × (index value at present/ index value at time original cost was obtained). The most major component of this cost index is

Fabricated equipment and machinery

Process instruments and control

Pumps and compressor

Electrical equipments and material

4

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

Quarterly

Semi-annually

Annually

In no case, they are equal