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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

Correct Answer :

B. Pay out period


Related Questions

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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

According to six-tenths-factor rule, if the cost of a given unit at one capacity is known, then the cost of similar unit with '' times the capacity of the first unit is approximately equal to __________ times the cost of the initial unit.

A. n

B. n0.6

C. n0.4

D. √n

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4

Which of the following is the cheapest material of construction for the storage of sodium hydroxide upto a concentration of 75%?

A. Stainless steel

B. Plain carbon steel

C. Nickel

D. Copper

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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

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

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

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

__________ 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

Generally, income taxes are based on the

A. Total income

B. Gross earning

C. Total product cost

D. Fixed cost

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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

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 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

For a given fluid, as the pipe diameter increases, the pumping cost

A. Decreases

B. Increases

C. Remains the same

D. May increase or decrease, depending upon whether the fluid is Newtonian or non-Newtonian

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4

Pick out the wrong statement.

A. Gross margin = net income - net expenditure

B. Net sales realisation (NSR) = Gross sales - selling expenses

C. At breakeven point, NSR is more than the total production cost

D. Net profit = Gross margin - depreciation - interest

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4

Personnel working in the market research group is responsible for the job of

A. Equipment selection

B. Product evaluation

C. Equipment design

D. Cost estimation

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4

In a manufacturing industry, breakeven point occurs, when the

A. Total annual rate of production equals the assigned value

B. Total annual product cost equals the total annual sales

C. Annual profit equals the expected value

D. Annual sales equals the fixed cost

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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

The value of a property decreases __________ with time in straight line method of determining depreciation.

A. Linearly

B. Non-linearly

C. Exponentially

D. Logarithmically

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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

Pick out the wrong statement.

A. Debt-equity ratio of a chemical company describes the lenders contribution for each rupee of owner's contribution i.e., debt-equity ratio = total debt/net worth

B. Return on investment (ROI) is the ratio of profit before interest & tax and capital employed (i.e. net worth + total debt)

C. Working capital = current assets + current liability

D. Turn over = opening stock + production closing stock

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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

'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

A. (P - S)/n

B. 1 - (P/S)1/m

C. (m/n) (P - S)

D. [2 (n - m + 1)/n(n + 1)]. (P - S)

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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

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

For a typical project, the cumulative cash flow is zero at the

A. End of the project life

B. Breakeven point

C. Start up

D. End of the design stage

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4

The amount of simple interest during 'n' interest period is (where, i = interest rate based on the length of one interest period, p = principal)

A. p.i.n.

B. p(1 + i.n)

C. p(1 + i)n

D. p(1 - i.n)

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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

Depreciation is __________ in profit with time.

A. Decrease

B. Increase

C. No change

D. None of these

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4

In an ordinary chemical plant, electrical installation cost may be about

A. 10-15% of purchased equipment cost

B. 3-10% of fixed capital investment

C. Either (A) or (B)

D. Neither (A) nor (B)

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4

__________ taxes are based on gross earnings.

A. Property

B. Excise

C. Income

D. Capital gain