'Six-tenth factor' rule is used for estimating the
Equipment installation cost
Equipment cost by scaling
Cost of piping
Utilities cost
Correct Answer :
B. Equipment cost by scaling
Related Questions
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
Functional depreciation of an equipment is the measure of decrease in its value due to its
Ageing
Wear and tear
Obsolescence
Breakdown or accident
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
'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
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
Which of the following ceramic packing materials is the costliest of all?
Berl saddles
Raschig rings
Pall rings
Intalox saddles
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
Construction expenses are roughly __________ percent of the total direct cost of the plant.
2
10
30
50
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
With increase in the discounted cash flow rate of return, the ratio of the total present value to the initial investment of a given project
Decreases
Increases
Increases linearly
Remain constant
Utilities cost in the operation of chemical process plant comes under the
Plant overhead cost
Fixed charges
Direct production cost
General expenses
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
Which of the following does not come under the sales expenses for a product of a chemical plant?
Advertising
Warehousing
Legal fees
Customer service
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
The payback method for the measurement of return on investment
Gives a correct picture of profitability
Underemphasises liquidity
Does not measure the discounted rate of return
Takes into account the cash inflows after the recovery of investments
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
An annuity is a series of equal payments occuring at equal time intervals, and this amount includes the sum of all payments plus interest, if allowed to accumulate at a definite rate of interest from the time of initial payment to the end of annuity term. Ordinary annuity is used in the calculation of the
Manufacturing cost
Depreciation by sinking fund method
Discrete compound interest
Cash ratio
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)
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
If the interest rate of 10% per period is compounded half yearly, the actual annual return on the principal will be __________ percent.
10
20
> 20
< 20
Direct costs component of the fixed capital consists of
Contingencies
Onsite and offsite costs
Labour costs
Raw material costs
Personnel working in the market research group is responsible for the job of
Equipment selection
Product evaluation
Equipment design
Cost estimation
Maximum production start up cost for making a chemical plant operational is about __________ percent of the fixed capital cost.
1
5
10
30
Manufacturing cost in a chemical company does not include the
Fixed charges
Plant overheads
Direct products cost
Administrative expenses
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
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
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.
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
Most chemical plants use an initial working capital amounting to 10-20% of the total capital investment. But this percentage may increase to __________ percent in case of seasonal products manufacturing plant.
30
50
75
95
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)