4

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

Diminishing balance

Straight line

Sum of the years digit

Sinking fund

A. Diminishing balance

4

Property

Excise

Income

Capital gain

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

# 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

4

2

10

30

50

4

0.1 to 1

1 to 2

10 to 20

50 to 60

4

1

5

10

30

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

# 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

# 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

10

20

> 20

< 20

4

121

110

97

91

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

Low alloy steel

Titanium

High alloy steel

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

General expenses

R & D cost

None of these

4

# Expenditure on research and development (R & D) is categorised as the __________, while making an estimate of the total product cost for a chemical plant.

Fixed expenses

General expenses

Direct production cost

4

5 years

7 years

12 years

10 years

4

# Operating profit of a chemical plant is equal to

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

Profit after tax plus depreciation

Net profit + tax

Profit after tax

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

# Nominal and effective interest rates are equal, when the interest is compounded

Quarterly

Semi-annually

Annually

In no case, they are equal

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

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

Diminishing balance

Straight line

Sum of the years digit

Sinking fund

4

p.i.n.

p(1 + i.n)

p(1 + i)n

p(1 - i.n)

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

# A series of equal payments (e.g., deposit or cost) made at equal intervals of time is known as

Perpetuity

Capital charge factor

Annuity

Future worth

4

One

Three

Six

Twelve

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 a component of working capital investment?

Utilities plants

Maintenance and repair inventory

Process equipments

Depreciation

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