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)
Correct Answer :
D. In a chemical industry, research and development cost amounts to about 15% of net sales realisation (NSR)
Related Questions
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
A present sum of Rs. 100 at the end of one year, with half yearly rate of interest at 10%, will be Rs.
121
110
97
91
Pick out the wrong statement.
Net worth means paid up share capital and reserve & surplus (i.e. shareholders equity)
Return on equity = profit after tax/net worth
Working capital turnover ratio = sales/net working capital
Total cost of production is more than net sales realisation (NSR) at breakeven point
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
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
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)
The total investment in a project is Rs. 10 lakhs and the annual profit is 1.5 lakhs. If the project life is 10 years, then the simple rate of return on investment is
15%
10%
1.5%
150%
The __________ of a chemical company can be obtained directly from the balance sheet as the difference between current assets and current liabilities.
Cash ratio
Net working capital
Current ratio
Liquids assets
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
The amount of simple interest during 'n' interest period is (where, i = interest rate based on the length of one interest period, p = principal)
p.i.n.
p(1 + i.n)
p(1 + i)n
p(1 - i.n)
Accumulated sum at the end of 5 years, if Rs. 10000 is invested now at 10% interest per annum on a compound basis is Rs.
15000
16105
18105
12500
Which of the following is not a component of working capital?
Raw materials is stock
Finished products in stock
Transportation facilities
Semi-finished products in the process
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
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
The amount of compounded interest during 'n' interest periods is
p[(1+i)n - 1)]
p(1 + i)n
p(1 - i)n
p(1 + in)
The value of a property decreases __________ with time in straight line method of determining depreciation.
Linearly
Non-linearly
Exponentially
Logarithmically
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
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
The 'total capital investment' for a chemical process plant comprises of the fixed capital investment and the
Overhead cost
Working capital
Indirect production cost
Direct production cost
__________ of depreciation calculation accounts for the interest on investment.
Straight line method
Declining balance
Both (A) and (B)
Neither (A) nor (B)
Out of the following, the depreciation calculated by the __________ method is the maximum.
Diminishing balance
Straight line
Sum of the years digit
Sinking fund
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
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
Gantt chart (or Bar chart) is helpful in
Efficient utilisation of manpower and machines
Preparing production schedule
Efficient despatching of products
Inventory control
Chemical engineering plant cost index is used for finding the present cost of a particular chemical plant, if the cost of similar plant at some time in the past is known. The present cost of the plant = original cost × (index value at present/ index value at time original cost was obtained). The most major component of this cost index is
Fabricated equipment and machinery
Process instruments and control
Pumps and compressor
Electrical equipments and material
The ratio of gross annual sales to the fixed capital investment is termed as the __________ ratio.
Cash reserve
Capital
Turnover
Investment
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
Depreciation is __________ in profit with time.
Decrease
Increase
No change
None of these
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
Depreciation
Costs (on annual basis) are constant when the straight line method is used for its determination
Is the unavoidable loss in the value of the plant, equipment and materials with lapse in time
Does figure in the calculation of income tax liability on cash flows from an investment
All (A), (B) and (C)