'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
Correct Answer :
C. 4.2 to 4.4
Related Questions
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
Construction expenses are roughly __________ percent of the total direct cost of the plant.
2
10
30
50
Cost of instrumentation in a modern chemical plant ranges from __________ percent of the total plant cost.
5 to 10
20 to 30
40 to 50
60 to 70
A reactor having a salvage value of Rs. 10000 is estimated to have a service life of 10 years. The annual interest rate is 10%. The original cost of the reactor was Rs. 80000. The book value of the reactor after 5 years using sinking fund depreciation method will be Rs.
40,096
43,196
53,196
60,196
In a chemical process plant, the total product cost comprises of manufacturing cost and the
General expenses
Overhead cost
R & D cost
None of these
Break-even point is the point of intersection of
Fixed cost and total cost
Total cost and sales revenue
Fixed cost and sales revenue
None of these
The value of a property decreases __________ with time in straight line method of determining depreciation.
Linearly
Non-linearly
Exponentially
Logarithmically
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
Which of the following elements is not included in the scope of market analysis?
Competition from other manufactures
Product distribution
Opportunities
Economics
The inventory of raw materials included in the working capital is usually about __________ months supply of raw materials valued at delivery prices.
One
Three
Six
Twelve
__________ 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
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
__________ taxes are based on gross earnings.
Property
Excise
Income
Capital gain
Cost of piping in a fluid processing unit (e.g., distillation) of a chemical process plant is about __________ percent of the fixed capital investment.
4
13
22
34
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
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
A machine has an initial value of Rs. 5000, service life of 5 years and final salvage value of Rs. 1000. The annual depreciation cost by straight line method is Rs.
300
600
800
1000
Maximum production start up cost for making a chemical plant operational is about __________ percent of the fixed capital cost.
1
5
10
30
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)
Annual depreciation cost are not constant when, the __________ method of depreciation calculation is used.
Straight line
Sinking fund
Present worth
Declining balance
Utilities cost in the operation of chemical process plant comes under the
Plant overhead cost
Fixed charges
Direct production cost
General expenses
The ratio of working capital to total capital investment for most chemical plants (except for nonseasonal based products) is in the range of __________ percent.
0.1 to 1
1 to 2
10 to 20
50 to 60
Depreciation
Costs (on annual basis) are constant when the straight line method is used for its determination
Is the unavoidable loss in the value of the plant, equipment and materials with lapse in time
Does figure in the calculation of income tax liability on cash flows from an investment
All (A), (B) and (C)
'P' is the investment made on an equipment, 'S' is its salvage value and 'n is the life of the equipment in years. The depreciation for Rath year by the sum-of years digit method will be
(P - S)/n
1 - (P/S)1/m
(m/n) (P - S)
[2 (n - m + 1)/n(n + 1)]. (P - S)
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
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)
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
__________ of depreciation calculation accounts for the interest on investment.
Straight line method
Declining balance
Both (A) and (B)
Neither (A) nor (B)
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
A balance sheet for a chemical plant shows its financial condition at any given date. It does not contain the __________ of the plant.
Current asset
Current liability
Long term debt
Profit