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What is the correct answer?

4

In declining balance method of depreciation calculation, the

A. Value of the asset decreases linearly with time

B. Annual cost of depreciation is same every year

C. Annual depreciation is the fixed percentage of the property value at the beginning of the particular year

D. None of these

Correct Answer :

C. Annual depreciation is the fixed percentage of the property value at the beginning of the particular year


Related Questions

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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

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

The ratio of working capital to total capital investment for most chemical plants (except for nonseasonal based products) is in the range of __________ percent.

A. 0.1 to 1

B. 1 to 2

C. 10 to 20

D. 50 to 60

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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

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

A. Multiple straight line method

B. Sinking fund method

C. Declining balance method

D. Sum of the years digit method

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4

Payback period

A. And economic life of a project are the same

B. Is the length of time over which the earnings on a project equals the investment

C. Is affected by the variation in earnings after the recovery of the investment

D. All (A), (B) and (C)

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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

Following the six-tenth factor rule, if a loglog plot of capacity of the equipment vs. cost of the equipment is made, then a straight line is obtained, whose slope is equal to

A. 0.1

B. 0.6

C. 0.2

D. 0.8

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4

In which of the electric power generation system, the operating cost is minimum?

A. Thermal

B. Nuclear

C. Hydroelectric

D. Fast breeder reactor

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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

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

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

A. Straight line

B. Sinking fund

C. Present worth

D. Declining balance

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4

Gantt chart (or Bar chart) is helpful in

A. Efficient utilisation of manpower and machines

B. Preparing production schedule

C. Efficient despatching of products

D. Inventory control

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4

Which of the following elements is not included in the scope of market analysis?

A. Competition from other manufactures

B. Product distribution

C. Opportunities

D. Economics

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4

In a chemical process plant, the total product cost comprises of manufacturing cost and the

A. General expenses

B. Overhead cost

C. R & D cost

D. None of these

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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

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

Effective and nominal interest rates are equal, when the interest is compounded

A. Annually

B. Fortnightly

C. Monthly

D. Half-yearly

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4

Break-even point is the point of intersection of

A. Fixed cost and total cost

B. Total cost and sales revenue

C. Fixed cost and sales revenue

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

In declining balance method of depreciation calculation, the

A. Value of the asset decreases linearly with time

B. Annual cost of depreciation is same every year

C. Annual depreciation is the fixed percentage of the property value at the beginning of the particular year

D. None of these

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4

Maximum production start up cost for making a chemical plant operational is about __________ percent of the fixed capital cost.

A. 1

B. 5

C. 10

D. 30

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4

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

A. Market survey

B. Operating labour, supervision and supplies

C. Overhead and utilities

D. Depreciation, property tax and insurance

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4

Gross earning is equal to the total income minus

A. Total product cost

B. Fixed cost

C. Income tax

D. None of these

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4

Relative cost of chemical process plants in India is about __________ percent more than the similar plants in U.S.A.

A. 15

B. 35

C. 55

D. 75

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4

Which of the following relationship is not correct is case of a chemical process plant?

A. Manufacturing cost = direct product cost + fixed charges + plant overhead costs

B. General expenses = administrative expenses + distribution & marketing expenses

C. Total product cost = manufacturing cost + general expenses

D. Total product cost = direct production cost + plant overhead cost

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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

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?

A. Electrical installation cost

B. Equipment installation cost

C. Cost for piping

D. Equipment insulation cost

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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

__________ 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