4

Raschig rings

Pall rings

4

(1 + i)n/S

S/(1 + i)n

S/(1 + in)

S/(1 + n)i

4

# A series of equal payments (e.g., deposit or cost) made at equal intervals of time is known as

Perpetuity

Capital charge factor

Annuity

Future worth

4

# 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

4

# __________ method for profitability evaluation of a project does not account for investment cost due to land.

Net present worth

Pay out period

Discounted cash flow

Rate of return on investment

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

# 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

# Pick out the wrong statement.

Gross revenue is that total amount of capital received as a result of the sale of goods or service

Net revenue is the total profit remaining after deducting all costs excluding taxes

The ratio of immediately available cash to the total current liabilities is known as the cash ratio

Consolidated income statement based on a given time period indicates surplus capital and shows the relationship among total income, costs & profit over the time interval

4

# Generally, income taxes are based on the

Total income

Gross earning

Total product cost

Fixed cost

4

Fixed

Utilities

Capital

4

# __________ of depreciation calculation does not take into account the interest on investments.

Present worth method

Sinking fund method

Sum of the years-digits method

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

4

10

20

> 20

< 20

4

# Gross earning is equal to the total income minus

Total product cost

Fixed cost

Income tax

None of these

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

# 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

# Direct costs component of the fixed capital consists of

Contingencies

Onsite and offsite costs

Labour costs

Raw material costs

4

# 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

4

# 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

4

Linearly

Non-linearly

Exponentially

Logarithmically

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

# Utilities cost in the operation of chemical process plant comes under the

Fixed charges

Direct production cost

General expenses

4

# 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

4

General expenses

R & D cost

None of these

4

15000

16105

18105

12500

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

10 to 20

35 to 45

55 to 65

70 to 80

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

# 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

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.

Fixed expenses

General expenses

Direct production cost

4

# 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