4

# __________ 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

B. Pay out period

4

# Optimum economic pipe diameter for fluid is determined by the

Viscosity of the fluid

Density of the fluid

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

None of these

4

n

n0.6

n0.4

√n

4

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

Stainless steel

Plain carbon steel

Nickel

Copper

4

0.1

0.6

0.2

0.8

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?

Electrical installation cost

Equipment installation cost

Cost for piping

Equipment insulation cost

4

Warehousing

Legal fees

Customer service

4

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

Thermal

Nuclear

Hydroelectric

Fast breeder reactor

4

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

Present worth method

Sinking fund method

Sum of the years-digits method

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

4

# Generally, income taxes are based on the

Total income

Gross earning

Total product cost

Fixed cost

4

10

20

> 20

< 20

4

10 to 20

35 to 45

55 to 65

70 to 80

4

# 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

4

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

Decreases

Increases

Remains the same

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

4

# Pick out the wrong statement.

Gross margin = net income - net expenditure

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

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

Net profit = Gross margin - depreciation - interest

4

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

Equipment selection

Product evaluation

Equipment design

Cost estimation

4

# In a manufacturing industry, breakeven point occurs, when the

Total annual rate of production equals the assigned value

Total annual product cost equals the total annual sales

Annual profit equals the expected value

Annual sales equals the fixed cost

4

Fixed

Utilities

Capital

4

Linearly

Non-linearly

Exponentially

Logarithmically

4

1 to 5

10 to 20

25 to 35

35 to 45

4

# Pick out the wrong statement.

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

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

Working capital = current assets + current liability

Turn over = opening stock + production closing stock

4

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

Market survey

Operating labour, supervision and supplies

Depreciation, property tax and insurance

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

(P - S)/n

1 - (P/S)1/m

(m/n) (P - S)

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

4

# The depreciation during the year 'n', in diminishing balance method of depreciation calculation, is calculated by multiplying a fixed percentage 'N' to the

Initial cost

Book value at the end of (n - 1)th year

Depreciation during the (n - 1)th year

Difference between initial cost and salvage value

4

# In declining balance method of depreciation calculation, the

Value of the asset decreases linearly with time

Annual cost of depreciation is same every year

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

None of these

4

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

End of the project life

Breakeven point

Start up

End of the design stage

4

p.i.n.

p(1 + i.n)

p(1 + i)n

p(1 - i.n)

4

General expenses

R & D cost

None of these

4

Decrease

Increase

No change

None of these

4

# 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)