4

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

Cost benefit analysis

Floor area availability

Terminal parameters

Evaporation capacity required

A. Cost benefit analysis

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

5 to 10

20 to 30

40 to 50

60 to 70

4

10 to 20

20 to 40

45 to 60

65 to 75

4

# Which of the following is not a component of depreciation cost?

Repairs and maintenance cost

Loss due to obsolescence of the equipment

Loss due to decrease in the demand of product

Loss due to accident/breakdown in the machinery

4

# 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)

4

# 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

4

0.1

0.6

0.2

0.8

4

(1 + i)n/S

S/(1 + i)n

S/(1 + in)

S/(1 + n)i

4

# If an amount R is paid at the end of every year for 'n' years, then the net present value of the annuity at an interest rate of i is

R [{(1 + i)n - 1}/ i ]

R [{(1 + i)n - 1}/ i (1 + i)n]

R(1 + i)n

R/(1 + i)n

4

15000

16105

18105

12500

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

# 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

4

0.1 to 1

1 to 2

10 to 20

50 to 60

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

# 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

4

# 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

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

4

# Utilities cost in the operation of chemical process plant comes under the

Fixed charges

Direct production cost

General expenses

4

# 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

4

# Which of the following is not a component of the working capital for a chemical process plant?

Product inventory

In-process inventory

Minimum cash reserve

Storage facilities

4

# Annual depreciation cost are not constant when, the __________ method of depreciation calculation is used.

Straight line

Sinking fund

Present worth

Declining balance

4

# 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

4

n

n0.6

n0.4

√n

4

# Functional depreciation of an equipment is the measure of decrease in its value due to its

Ageing

Wear and tear

Obsolescence

Breakdown or accident

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

# Which of the following methods of depreciation calculations results in book values greater than those obtained with straight line method?

Multiple straight line method

Sinking fund method

Declining balance method

Sum of the years digit method

4

4

13

22

34

4

# 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

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)