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chemical engineering plant economics MCQs

Practise multiple-choice questions from chemical engineering plant economics for competitive examinations and subject revision. Review each marked answer and report any item that may be outdated or unclear.

chemical engineering plant economics Mcqs

1. A balance sheet for an industrial concern shows ___________________?
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A. Only fixed assets

B. Only current and fixed assets

C. Only current assets

D. The financial condition at any given time

2. Accumulated sum at the end of 5 years, if Rs. 10000 is invested now at 10% interest per annum on a compound basis is Rs ?
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A. 12500

B. 18105

C. 15000

D. 16105

3. In a chemical process plant, the total product cost comprises of manufacturing cost and the__________________?
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A. None of these

B. General expenses

C. R & D cost

D. Overhead cost

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 ________________?
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A. 1000 (1 + 0.1/4)5

B. 1000 (1 + 0.1/2)5

C. 1000 (1 + 0.1)20

D. 1000 (1 + 0.1/4)20

5. Nominal and effective interest rates are equal, when the interest is compounded______________?
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A. Annually

B. In no case, they are equal

C. Semi-annually

D. Quarterly

6. An investment of Rs. 100 lakhs is to be made for construction of a plant, which will take two years to start production. The annual profit from the operation of the plant is Rs. 20 lakhs. What will be the payback time ?
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A. 7 years

B. 5 years

C. 10 years

D. 12 years

7. Six-tenth factor rule is used for estimating the_________________?
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A. Cost of piping

B. Utilities cost

C. Equipment cost by scaling

D. Equipment installation cost

8. Pick out the correct statement ?
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A. Difference between income and expense is termed as gross revenue

B. Unamortised cost is the difference between the original cost of a property and all the

C. ve any charges involved in its removal & sale

D. reciation charges made to date</strong>

E. Scrap value is the net amount of money obtainable from the sale of used property over and

F. estment

9. The ______________ of a chemical company can be obtained directly from the balance sheet as the difference between current assets and current liabilities ?
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A. Net working capital

B. Cash ratio

C. Liquids assets

D. Current ratio

10. A present sum of Rs. 100 at the end of one year, with half yearly rate of interest at 10%, will be Rs ?
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A. 91

B. 110

C. 121

D. 97

11. _________________ of depreciation calculation accounts for the interest on investment?
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A. Straight line method

B. Declining balance

C. Both A. and B.

D. Neither A. nor B.

12. Functional depreciation of an equipment is the measure of decrease in its value due to its _________________?
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A. Breakdown or accident

B. Ageing

C. Wear and tear

D. Obsolescence

13. Depreciation is ____________________ in profit with time?
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A. Decrease

B. None of these

C. No change

D. Increase

14. Which of the following is not a component of the working capital for a chemical process plant ?
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A. In-process inventory

B. Minimum cash reserve

C. Product inventory

D. Storage facilities

15. The economic life of a large chemical process plant as compared to a small chemical plant is_______________?
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A. Almost equal

B. Slightly less

C. Much more

D. Only slightly more

16. 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?
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A. 1 to 5

B. 25 to 35

C. 10 to 20

D. 35 to 45

17. ________________ of depreciation calculation does not take into account the interest on investments?
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A. Sum of the years-digits method

B. Sinking fund method

C. Present worth method

D. All A, B. and C.

18. 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 ?
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A. Cost for piping

B. Equipment installation cost

C. Equipment insulation cost

D. Electrical installation cost

19. Which of the following is not a component of the fixed capital for a chemical plant facility ?
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A. Utilities plants

B. Raw materials inventory

C. Process equipment

D. Emergency facilities

20. Payback period____________________?
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A. Is the length of time over which the earnings on a project equals the investment

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

C. And economic life of a project are the same

D. All A, B. and C

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