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
Correct Answer :
A. Cash reserve
Related Questions
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
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
__________ of depreciation calculation accounts for the interest on investment.
Straight line method
Declining balance
Both (A) and (B)
Neither (A) nor (B)
__________ taxes are based on gross earnings.
Property
Excise
Income
Capital gain
Fixed capital investment of a chemical plant is the total amount of money needed to supply the necessary plant and manufacturing facilities plus the working capital for operation of the facilities. Which of the following components of fixed capital investment requires minimum percentage of it?
Electrical installation cost
Equipment installation cost
Cost for piping
Equipment insulation cost
Which of the following is a component of working capital investment?
Utilities plants
Maintenance and repair inventory
Process equipments
Depreciation
Manufacturing cost in a chemical company does not include the
Fixed charges
Plant overheads
Direct products cost
Administrative expenses
Equipment installation cost in a chemical process plant ranges from __________ percent of the purchased equipment cost.
10 to 20
35 to 45
55 to 65
70 to 80
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
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.
n
n0.6
n0.4
√n
Chemical engineering plant cost index is used for finding the present cost of a particular chemical plant, if the cost of similar plant at some time in the past is known. The present cost of the plant = original cost × (index value at present/ index value at time original cost was obtained). The most major component of this cost index is
Fabricated equipment and machinery
Process instruments and control
Pumps and compressor
Electrical equipments and material
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
'Six-tenth factor' rule is used for estimating the
Equipment installation cost
Equipment cost by scaling
Cost of piping
Utilities cost
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
Maximum production start up cost for making a chemical plant operational is about __________ percent of the fixed capital cost.
1
5
10
30
Nominal and effective interest rates are equal, when the interest is compounded
Quarterly
Semi-annually
Annually
In no case, they are equal
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
If an amount R is paid at the end of every year for 'n' years, then the net present value of the annuity at an interest rate of i is
R [{(1 + i)n - 1}/ i ]
R [{(1 + i)n - 1}/ i (1 + i)n]
R(1 + i)n
R/(1 + i)n
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
In a chemical process plant, the total product cost comprises of manufacturing cost and the
General expenses
Overhead cost
R & D cost
None of these
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
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
Operating profit of a chemical plant is equal to
Profit before interest and tax i.e., net profit + interest + tax
Profit after tax plus depreciation
Net profit + tax
Profit after tax
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 the costliest material of construction used in pressure vessel construction?
Low alloy steel
Lead
Titanium
High alloy steel
Effective and nominal interest rates are equal, when the interest is compounded
Annually
Fortnightly
Monthly
Half-yearly
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
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
'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
'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