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)
Correct Answer :
B. Is the length of time over which the earnings on a project equals the investment
Related Questions
Which of the following ceramic packing materials is the costliest of all?
Berl saddles
Raschig rings
Pall rings
Intalox saddles
'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
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
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)
Depreciation is __________ in profit with time.
Decrease
Increase
No change
None of these
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
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
Annual depreciation cost are not constant when, the __________ method of depreciation calculation is used.
Straight line
Sinking fund
Present worth
Declining balance
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)
Purchased cost of equipments for a chemical process plant ranges from __________ percent of the fixed capital investment.
10 to 20
20 to 40
45 to 60
65 to 75
'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)
An investment of Rs. 1000 is carrying an interest of 10% compounded quarterly. The value of the investment at the end of five years will be
1000 (1 + 0.1/4)20
1000 (1 + 0.1)20
1000 (1 + 0.1/4)5
1000 (1 + 0.1/2)5
Construction expenses are roughly __________ percent of the total direct cost of the plant.
2
10
30
50
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)
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
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
An investment of Rs. 100 lakhs is to be made for construction of a plant, which will take two years to start production. The annual profit from the operation of the plant is Rs. 20 lakhs. What will be the payback time?
5 years
7 years
12 years
10 years
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
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
Factory manufacturing cost is the sum of the direct production cost
Fixed charges and plant overhead cost
And plant overhead cost
Plant overhead cost and administrative expenses
None of these
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
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
Gantt chart (or Bar chart) is helpful in
Efficient utilisation of manpower and machines
Preparing production schedule
Efficient despatching of products
Inventory control
Which of the following is the costliest material of construction used in pressure vessel construction?
Low alloy steel
Lead
Titanium
High alloy steel
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
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
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
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
Expenditure on research and development (R & D) is categorised as the __________, while making an estimate of the total product cost for a chemical plant.
Overhead cost
Fixed expenses
General expenses
Direct production cost
Total product cost of a chemical plant does not include the __________ cost.
Market survey
Operating labour, supervision and supplies
Overhead and utilities
Depreciation, property tax and insurance