4

# 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

B. Net working capital

4

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

Straight line method

Declining balance

Both (A) and (B)

Neither (A) nor (B)

4

# Functional depreciation of an equipment is the measure of decrease in its value due to its

Ageing

Wear and tear

Obsolescence

Breakdown or accident

4

# Annual depreciation cost are not constant when, the __________ method of depreciation calculation is used.

Straight line

Sinking fund

Present worth

Declining balance

4

# Personnel working in the market research group is responsible for the job of

Equipment selection

Product evaluation

Equipment design

Cost estimation

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

# 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

p[(1+i)n - 1)]

p(1 + i)n

p(1 - i)n

p(1 + in)

4

# Total product cost of a chemical plant does not include the __________ cost.

Market survey

Operating labour, supervision and supplies

Depreciation, property tax and insurance

4

General expenses

R & D cost

None of these

4

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

Equipment installation cost

Equipment cost by scaling

Cost of piping

Utilities cost

4

# Cost incurred towards __________ in a chemical plant is a component of the utilities cost.

Water supply

Running a control laboratory

Property protection

Medical services

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

# 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

4

p.i.n.

p(1 + i.n)

p(1 + i)n

p(1 - i.n)

4

# Factory manufacturing cost is the sum of the direct production cost

Fixed charges and plant overhead cost

None of these

4

10 to 20

20 to 40

45 to 60

65 to 75

4

# Which of the following is not a component of the working capital for a chemical process plant?

Product inventory

In-process inventory

Minimum cash reserve

Storage facilities

4

# In which of the electric power generation system, the operating cost is minimum?

Thermal

Nuclear

Hydroelectric

Fast breeder reactor

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

Book value

Total cost

Operating cost

None of these

4

# Which of the following methods of depreciation calculations results in book values greater than those obtained with straight line method?

Multiple straight line method

Sinking fund method

Declining balance method

Sum of the years digit method

4

0.1 to 1

1 to 2

10 to 20

50 to 60

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

# 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

4

10 to 20

35 to 45

55 to 65

70 to 80

4

1 to 5

10 to 20

25 to 35

35 to 45

4

# 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)

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

# 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