chemical engineering plant economics MCQs – Page 3

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 Review each marked answer and report any item that may be outdated or unclear.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

41. The ratio of gross annual sales to the fixed capital investment is termed as the ________________ ratio?
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A. Turnover

B. Investment

C. Capital

D. Cash reserve

42. Manufacturing cost in a chemical company does not include the____________________?
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A. Plant overheads

B. Administrative expenses

C. Fixed charges

D. Direct products cost

43. The inventory of raw materials included in the working capital is usually about ______________ month?s supply of raw materials valued at delivery prices?
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A. One

B. Twelve

C. Three

D. Six

44. Which of the following is not a current asset of a chemical company ?
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A. None of these

B. Marketable securities

C. Inventories

D. Chemical equipments

45. The ratio of working capital to total capital investment for most chemical plants (except for non-seasonal based products) is in the range of _____________ percent ?
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A. 1 to 2

B. 0.1 to 1

C. 50 to 60

D. 10 to 20

46. Pick out the wrong statement ?
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A. estment

B. Annual depreciation rate of buildings in a chemical plant is about 3% of its initial cost

C. Insurance rates on annual basis in a chemical plant may be about 1% of the fixed capital

D. ut 10% of the fixed capital investment

E. lisation (NSR)</strong>

F. The annual depreciation rate for machinery and equipments in a chemical process plant is

47. Utilities cost in the operation of chemical process plant comes under the ?
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A. Plant overhead cost

B. Direct production cost

C. General expenses

D. Fixed charges

48. Optimum number of effects in a multiple effect evaporator is decided by the____________________?
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A. Floor area availability

B. Terminal parameters

C. Cost benefit analysis

D. Evaporation capacity required

49. The amount of simple interest during n interest period is (where, i = interest rate based on the length of one interest period, p = principal) ?
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A. p.i.n.

B. p(1 + i.n)

C. p(1 i.n)

D. p(1 + i)n

50. The depreciation during the year n, in diminishing balance method of depreciation calculation, is calculated by multiplying a fixed percentage N to the ?
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A. Depreciation during the (n 1)th year

B. Book value at the end of (n 1)th year

C. Difference between initial cost and salvage value

D. Initial cost

51. In an ordinary chemical plant, electrical installation cost may be about ____________________?
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A. 10-15% of purchased equipment cost

B. Neither A. nor B.

C. Either A. or B.

D. 3-10% of fixed capital investment

52. Scheduling provides information about the_________________?
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A. Time of starting of job and also about how much work should be completed during a

B. Proper utilisation of machines

C. Time of completion of job

D. Means to minimise idle time for machines

E. ticular period</strong>

53. In which of the electric power generation system, the operating cost is minimum ?
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A. Thermal

B. Hydroelectric

C. Fast breeder reactor

D. Nuclear

54. 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____________________?
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A. Process instruments and control

B. Pumps and compressor

C. Fabricated equipment and machinery

D. Electrical equipments and material

55. Which of the following ceramic packing materials is the costliest of all ?
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A. Berl saddles

B. Raschig rings

C. Intalox saddles

D. Pall rings

56. 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 year?s digit method will be____________________?
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A. (m/n) (P S)

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

C. (P S)/n

D. 1 (P/S)1/m

57. Out of the following, the depreciation calculated by the _____________ method is the maximum?
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A. Diminishing balance

B. Sinking fund

C. Sum of the years digit

D. Straight line

58. Which of the following is not a mathematical method for evaluation of profitability of a chemical process plant ?
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A. Rate of return on investment

B. Payout period

C. Discounted cash flow based on full life performance

D. Cash reserve

59. Operating profit of a chemical plant is equal to___________________?
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A. Profit after tax

B. Net profit + tax

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

D. Profit after tax plus depreciation

60. Which of the following does not come under the sales expenses for a product of a chemical plant ?
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A. Legal fees

B. Customer service

C. Warehousing

D. Advertising

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