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What is the correct answer?

4

In financial accounting of a chemical plant, which of the following relationship is invalid?

A. Assets = equities

B. Assets = liabilities + net worth

C. Total income = costs + profits

D. Assets = capital

Correct Answer :

D. Assets = capital


Related Questions

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4

The payback method for the measurement of return on investment

A. Gives a correct picture of profitability

B. Underemphasises liquidity

C. Does not measure the discounted rate of return

D. Takes into account the cash inflows after the recovery of investments

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4

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

A. (1 + i)n/S

B. S/(1 + i)n

C. S/(1 + in)

D. S/(1 + n)i

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4

If the interest rate of 10% per period is compounded half yearly, the actual annual return on the principal will be __________ percent.

A. 10

B. 20

C. > 20

D. < 20

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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

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

Equipment installation cost in a chemical process plant ranges from __________ percent of the purchased equipment cost.

A. 10 to 20

B. 35 to 45

C. 55 to 65

D. 70 to 80

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4

The ratio of gross annual sales to the fixed capital investment is termed as the __________ ratio.

A. Cash reserve

B. Capital

C. Turnover

D. Investment

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4

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?

A. 5 years

B. 7 years

C. 12 years

D. 10 years

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4

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

A. Inventories

B. Marketable securities

C. Chemical equipments

D. None of these

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4

Optimum economic pipe diameter for fluid is determined by the

A. Viscosity of the fluid

B. Density of the fluid

C. Total cost considerations (pumping cost plus fixed cost of the pipe)

D. None of these

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4

Optimum number of effects in a multiple effect evaporator is decided by the

A. Cost benefit analysis

B. Floor area availability

C. Terminal parameters

D. Evaporation capacity required

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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

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

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

__________ 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

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

__________ of depreciation calculation accounts for the interest on investment.

A. Straight line method

B. Declining balance

C. Both (A) and (B)

D. Neither (A) nor (B)

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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

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

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

Which of the following ceramic packing materials is the costliest of all?

A. Berl saddles

B. Raschig rings

C. Pall rings

D. Intalox saddles

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4

__________ of depreciation calculation does not take into account the interest on investments.

A. Present worth method

B. Sinking fund method

C. Sum of the years-digits method

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

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4

Cost of instrumentation in a modern chemical plant ranges from __________ percent of the total plant cost.

A. 5 to 10

B. 20 to 30

C. 40 to 50

D. 60 to 70

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4

Effluent treatment cost in a chemical plant is categorised as the __________ cost.

A. Fixed

B. Overhead

C. Utilities

D. Capital

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4

Which of the following does not come under the sales expenses for a product of a chemical plant?

A. Advertising

B. Warehousing

C. Legal fees

D. Customer service

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4

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

A. Diminishing balance

B. Straight line

C. Sum of the years digit

D. Sinking fund

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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

The economic life of a large chemical process plant as compared to a small chemical plant is

A. Only slightly more

B. Much more

C. Slightly less

D. Almost equal

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4

Which of the following is not a component of working capital?

A. Raw materials is stock

B. Finished products in stock

C. Transportation facilities

D. Semi-finished products in the process

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4

Operating profit of a chemical plant is equal to

A. Profit before interest and tax i.e., net profit + interest + tax

B. Profit after tax plus depreciation

C. Net profit + tax

D. Profit after tax