The ratio of working capital to total capital investment for most chemical plants (except for nonseasonal based products) is in the range of __________ percent.
0.1 to 1
1 to 2
10 to 20
50 to 60
Correct Answer :
C. 10 to 20
Related Questions
Fixed charges for a chemical plant does not include the
Interest on borrowed money
Rent of land and buildings
Property tax, insurance and depreciation
Repair and maintenance charges
The ratio of gross annual sales to the fixed capital investment is termed as the __________ ratio.
Cash reserve
Capital
Turnover
Investment
__________ of depreciation calculation accounts for the interest on investment.
Straight line method
Declining balance
Both (A) and (B)
Neither (A) nor (B)
Which of the following is not a current asset of a chemical company?
Inventories
Marketable securities
Chemical equipments
None of these
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
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
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
'Utilities' in a chemical process plant includes compressed air, steam, water, electrical power, oxygen, acetylene, fuel gases etc. Utility costs for ordinary chemical process plants ranges roughly from __________ percent of the total product cost.
1 to 5
10 to 20
25 to 35
35 to 45
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)
Profit is equal to revenue minus
Book value
Total cost
Operating cost
None of these
Following the six-tenth factor rule, if a loglog plot of capacity of the equipment vs. cost of the equipment is made, then a straight line is obtained, whose slope is equal to
0.1
0.6
0.2
0.8
In declining balance method of depreciation calculation, the
Value of the asset decreases linearly with time
Annual cost of depreciation is same every year
Annual depreciation is the fixed percentage of the property value at the beginning of the particular year
None of these
Gross earning is equal to the total income minus
Total product cost
Fixed cost
Income tax
None of these
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)
Depreciation is __________ in profit with time.
Decrease
Increase
No change
None of these
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
A reactor having a salvage value of Rs. 10000 is estimated to have a service life of 10 years. The annual interest rate is 10%. The original cost of the reactor was Rs. 80000. The book value of the reactor after 5 years using sinking fund depreciation method will be Rs.
40,096
43,196
53,196
60,196
Cost of instrumentation in a modern chemical plant ranges from __________ percent of the total plant cost.
5 to 10
20 to 30
40 to 50
60 to 70
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
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
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
If 'S' is the amount available after 'n' interest periods for an initial principal 'P' with the discrete compound interest rate 'i', the present worth is given by
(1 + i)n/S
S/(1 + i)n
S/(1 + in)
S/(1 + n)i
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
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
In which of the electric power generation system, the operating cost is minimum?
Thermal
Nuclear
Hydroelectric
Fast breeder reactor
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)
Optimum number of effects in a multiple effect evaporator is decided by the
Cost benefit analysis
Floor area availability
Terminal parameters
Evaporation capacity required
Effluent treatment cost in a chemical plant is categorised as the __________ cost.
Fixed
Overhead
Utilities
Capital
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)
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)