4

# Pick out the wrong statement.

Gross revenue is that total amount of capital received as a result of the sale of goods or service

Net revenue is the total profit remaining after deducting all costs excluding taxes

The ratio of immediately available cash to the total current liabilities is known as the cash ratio

Consolidated income statement based on a given time period indicates surplus capital and shows the relationship among total income, costs & profit over the time interval

B. Net revenue is the total profit remaining after deducting all costs excluding taxes

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

121

110

97

91

4

5 years

7 years

12 years

10 years

4

Property

Excise

Income

Capital gain

4

# Break-even point is the point of intersection of

Fixed cost and total cost

Total cost and sales revenue

Fixed cost and sales revenue

None of these

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

# Which of the following relationship is not correct is case of a chemical process plant?

Manufacturing cost = direct product cost + fixed charges + plant overhead costs

General expenses = administrative expenses + distribution & marketing expenses

Total product cost = manufacturing cost + general expenses

Total product cost = direct production cost + plant overhead cost

4

# Which of the following is not a component of the fixed capital for a chemical plant facility?

Raw materials inventory

Utilities plants

Process equipment

Emergency facilities

4

Warehousing

Legal fees

Customer service

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

40,096

43,196

53,196

60,196

4

1.2 to 1.4

2.5 to 2.7

4.2 to 4.4

6.2 to 6.4

4

# 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

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

# 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

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

Fixed charges

Direct production cost

General expenses

4

# Which of the following elements is not included in the scope of market analysis?

Competition from other manufactures

Product distribution

Opportunities

Economics

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

Fixed

Utilities

Capital

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

# Pick out the correct statement.

Difference between income and expense is termed as gross revenue

Unamortised cost is the difference between the original cost of a property and all the depreciation charges made to date

Sum-of-the-years-digits methods of depreciation calculation accounts for the interest on the investment

Scrap value is the net amount of money obtainable from the sale of used property over and above any charges involved in its removal & sale

4

# Gantt chart (or Bar chart) is helpful in

Efficient utilisation of manpower and machines

Preparing production schedule

Efficient despatching of products

Inventory control

4

# __________ of depreciation calculation accounts for the interest on investment.

Straight line method

Declining balance

Both (A) and (B)

Neither (A) nor (B)

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

# 'Six-tenth factor' rule is used for estimating the

Equipment installation cost

Equipment cost by scaling

Cost of piping

Utilities cost

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

Decrease

Increase

No change

None of these

4

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

Quarterly

Semi-annually

Annually

In no case, they are equal

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