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4

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

A. 15%

B. 10%

C. 1.5%

D. 150%

Correct Answer :

C. 1.5%


Related Questions

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4

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.

A. 30

B. 50

C. 75

D. 95

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4

Which of the following is the costliest material of construction used in pressure vessel construction?

A. Low alloy steel

B. Lead

C. Titanium

D. High alloy steel

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4

Which of the following is the cheapest material of construction for the storage of sodium hydroxide upto a concentration of 75%?

A. Stainless steel

B. Plain carbon steel

C. Nickel

D. Copper

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4

Operating profit of a chemical plant is equal to

A. Profit before interest and tax i.e., net profit + interest + tax

B. Profit after tax plus depreciation

C. Net profit + tax

D. Profit after tax

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4

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

A. Competition from other manufactures

B. Product distribution

C. Opportunities

D. Economics

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4

Pick out the wrong statement.

A. Net worth means paid up share capital and reserve & surplus (i.e. shareholders equity)

B. Return on equity = profit after tax/net worth

C. Working capital turnover ratio = sales/net working capital

D. Total cost of production is more than net sales realisation (NSR) at breakeven point

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4

Optimum number of effects in a multiple effect evaporator is decided by the

A. Cost benefit analysis

B. Floor area availability

C. Terminal parameters

D. Evaporation capacity required

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4

The __________ of a chemical company can be obtained directly from the balance sheet as the difference between current assets and current liabilities.

A. Cash ratio

B. Net working capital

C. Current ratio

D. Liquids assets

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4

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.

A. 40,096

B. 43,196

C. 53,196

D. 60,196

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4

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

A. 15%

B. 10%

C. 1.5%

D. 150%

What is the correct answer?

4

Relative cost of chemical process plants in India is about __________ percent more than the similar plants in U.S.A.

A. 15

B. 35

C. 55

D. 75

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4

Out of the following, the depreciation calculated by the __________ method is the maximum.

A. Diminishing balance

B. Straight line

C. Sum of the years digit

D. Sinking fund

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4

Manufacturing cost in a chemical company does not include the

A. Fixed charges

B. Plant overheads

C. Direct products cost

D. Administrative expenses

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4

According to six-tenths-factor rule, if the cost of a given unit at one capacity is known, then the cost of similar unit with '' times the capacity of the first unit is approximately equal to __________ times the cost of the initial unit.

A. n

B. n0.6

C. n0.4

D. √n

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4

The inventory of raw materials included in the working capital is usually about __________ months supply of raw materials valued at delivery prices.

A. One

B. Three

C. Six

D. Twelve

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4

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

A. Decreases

B. Increases

C. Increases linearly

D. Remain constant

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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.

A. Overhead cost

B. Fixed expenses

C. General expenses

D. Direct production cost

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4

The payback method for the measurement of return on investment

A. Gives a correct picture of profitability

B. Underemphasises liquidity

C. Does not measure the discounted rate of return

D. Takes into account the cash inflows after the recovery of investments

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4

__________ taxes are based on gross earnings.

A. Property

B. Excise

C. Income

D. Capital gain

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4

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

A. (1 + i)n/S

B. S/(1 + i)n

C. S/(1 + in)

D. S/(1 + n)i

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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

A. (P - S)/n

B. 1 - (P/S)1/m

C. (m/n) (P - S)

D. [2 (n - m + 1)/n(n + 1)]. (P - S)

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4

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

A. Multiple straight line method

B. Sinking fund method

C. Declining balance method

D. Sum of the years digit method

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4

Payback period

A. And economic life of a project are the same

B. Is the length of time over which the earnings on a project equals the investment

C. Is affected by the variation in earnings after the recovery of the investment

D. All (A), (B) and (C)

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4

Which of the following is not a component of depreciation cost?

A. Repairs and maintenance cost

B. Loss due to obsolescence of the equipment

C. Loss due to decrease in the demand of product

D. Loss due to accident/breakdown in the machinery

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4

The ratio of gross annual sales to the fixed capital investment is termed as the __________ ratio.

A. Cash reserve

B. Capital

C. Turnover

D. Investment

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4

In a manufacturing industry, breakeven point occurs, when the

A. Total annual rate of production equals the assigned value

B. Total annual product cost equals the total annual sales

C. Annual profit equals the expected value

D. Annual sales equals the fixed cost

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4

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

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

B. General expenses = administrative expenses + distribution & marketing expenses

C. Total product cost = manufacturing cost + general expenses

D. Total product cost = direct production cost + plant overhead cost

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4

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

A. Straight line

B. Sinking fund

C. Present worth

D. Declining balance

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4

Depreciation is __________ in profit with time.

A. Decrease

B. Increase

C. No change

D. None of these

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4

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

A. Equipment selection

B. Product evaluation

C. Equipment design

D. Cost estimation