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
Correct Answer :
D. Assets = capital
Related Questions
Which of the following is not a current asset of a chemical company?
Inventories
Marketable securities
Chemical equipments
None of these
'Lang factor' is defined as the ratio of the capital investment to the delivered cost of major equipments. The value of 'Lang factor' for fixed capital investment, for a solid-fluid processing chemical plant ranges from
1.2 to 1.4
2.5 to 2.7
4.2 to 4.4
6.2 to 6.4
Effective and nominal interest rates are equal, when the interest is compounded
Annually
Fortnightly
Monthly
Half-yearly
Pick out the wrong statement.
Net worth means paid up share capital and reserve & surplus (i.e. shareholders equity)
Return on equity = profit after tax/net worth
Working capital turnover ratio = sales/net working capital
Total cost of production is more than net sales realisation (NSR) at breakeven point
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
An investment of Rs. 100 lakhs is to be made for construction of a plant, which will take two years to start production. The annual profit from the operation of the plant is Rs. 20 lakhs. What will be the payback time?
5 years
7 years
12 years
10 years
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
Optimum number of effects in a multiple effect evaporator is decided by the
Cost benefit analysis
Floor area availability
Terminal parameters
Evaporation capacity required
The __________ of a chemical company can be obtained directly from the balance sheet as the difference between current assets and current liabilities.
Cash ratio
Net working capital
Current ratio
Liquids assets
Maximum production start up cost for making a chemical plant operational is about __________ percent of the fixed capital cost.
1
5
10
30
Which of the following ceramic packing materials is the costliest of all?
Berl saddles
Raschig rings
Pall rings
Intalox saddles
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)
Which of the following relationship is not correct is case of a chemical process plant?
Manufacturing cost = direct product cost + fixed charges + plant overhead costs
General expenses = administrative expenses + distribution & marketing expenses
Total product cost = manufacturing cost + general expenses
Total product cost = direct production cost + plant overhead cost
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
Nominal and effective interest rates are equal, when the interest is compounded
Quarterly
Semi-annually
Annually
In no case, they are equal
Relative cost of chemical process plants in India is about __________ percent more than the similar plants in U.S.A.
15
35
55
75
Gross earning is equal to the total income minus
Total product cost
Fixed cost
Income tax
None of these
Which of the following is not a mathematical method for evaluation of profitability of a chemical process plant?
Cash reserve
Rate of return on investment
Payout period
Discounted cash flow based on full life performance
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
The payback method for the measurement of return on investment
Gives a correct picture of profitability
Underemphasises liquidity
Does not measure the discounted rate of return
Takes into account the cash inflows after the recovery of investments
The 'total capital investment' for a chemical process plant comprises of the fixed capital investment and the
Overhead cost
Working capital
Indirect production cost
Direct production cost
'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.
1 to 5
10 to 20
25 to 35
35 to 45
Most chemical plants use an initial working capital amounting to 10-20% of the total capital investment. But this percentage may increase to __________ percent in case of seasonal products manufacturing plant.
30
50
75
95
Functional depreciation of an equipment is the measure of decrease in its value due to its
Ageing
Wear and tear
Obsolescence
Breakdown or accident
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
__________ 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
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
The total investment in a project is Rs. 10 lakhs and the annual profit is 1.5 lakhs. If the project life is 10 years, then the simple rate of return on investment is
15%
10%
1.5%
150%
If 'S' is the amount available after 'n' interest periods for an initial principal 'P' with the discrete compound interest rate 'i', the present worth is given by
(1 + i)n/S
S/(1 + i)n
S/(1 + in)
S/(1 + n)i
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